⚡ Flash Summary

The ALHAMRA Islamic Stock Fund (ALHISF) quarterly report for the period ended September 30, 2025, reveals a mixed performance amid a dynamic economic backdrop. While the KSE-100 Index soared by 31.7% year-to-date, ALHISF delivered a return of 24.60%, lagging behind its benchmark of 33.20%. The fund’s net assets experienced a significant 80% increase, reaching Rs. 11,583 million, and the NAV per unit rose by Rs. 5.91. Fund is shifting allocation strategy between sectors.

📌 Key Takeaways

• 📈 KSE-100 Index increased by 31.7% FYTD.
• ⚠️ ALHISF return was 24.60%, underperforming the benchmark return of 33.20%.
• 💰 Net Assets of the Fund increased by 80% to Rs. 11,583 million.
• 💎 NAV per unit increased by Rs. 5.91 to Rs. 29.93.
• 🌍 Pakistan’s GDP growth is expected to be 3.5% in FY26.
• 🌾 Agriculture growth is expected to be 2.8% in FY26 due to flood impact.
• 🏦 FBR tax collection increased by 12.8% in 1QFY26 to PKR 2,885 billion.
• 💲 Country posted a current account deficit of USD 624 million in the first two months of fiscal year 2026.
• 💸 Remittances inflows grew by 7.0% to USD 6.4 billion.
• 🏦 SBP’s foreign exchange reserves remained stable around USD 14.4 billion.
• 📉 Headline inflation averaged 4.2% during 1QFY26, compared to 9.2% last year.
• ⚖️ The market is currently trading at a forward Price to Earnings ratio of 8.1x, offering a dividend yield of 6.0%.
• 🏦 Fund exposures were majorly in Commercial Banks, Cements, and Oil & Gas Exploration Companies.
• 💸 Foreign investors and Banks were major net sellers with an outflow of USD 132.1 million and USD 150.0 million, respectively during 1QFY26.

🎯 Investment Thesis

HOLD. While ALHISF has demonstrated growth in net assets, its underperformance relative to the benchmark raises concerns about its investment strategy. A HOLD recommendation is appropriate until the fund can demonstrate a consistent ability to generate returns in line with or exceeding its benchmark. Further analysis is needed to understand the reasons for the underperformance and whether management changes are warranted.