⏸️ NBP-FUNDS: HOLD Signal (6/10) – Financial Results of NBP Islamic Income Fund for the quarter ended September 30, 2025

📌 Key Takeaways

• 💰 SBP maintained policy rate at 11% to contain inflation.
• 📈 Headline inflation rose to 5.6% in September, but Q1 average eased to 4.2%.
• 🎯 FY26 average inflation projected within SBP’s 5-7% target range.
• 📉 Real GDP growth for FY26 projected between 3.0% and 3.5%.
• deficit was USD 624 million for July-August.
• 🏦 Foreign exchange reserves stood at USD 14.4 billion on September 26th.
• ✅ Fiscal performance improved with a primary surplus expected in Q1 FY26.
• 📊 NBP-IIF categorized as Shariah Compliant Income Fund with ‘A+ (f)’ rating by PACRA.
• 💸 Fund size decreased by 16% from Rs. 13,489 million to Rs. 11,321 million.
• 📈 Unit price increased from Rs. 10.1348 to Rs. 10.3483, showing an 8.4% p.a. return.
• 💹 Benchmark return was 9.5% p.a. for the same period.
• 💸 Fund earned a total income of Rs. 294.22 million during the period.
• ➖ Total expenses were Rs. 52.96 million, resulting in a net income of Rs. 241.26 million.

🎯 Investment Thesis

Given the current macroeconomic conditions and the fund’s performance, a HOLD recommendation is appropriate. While the fund provides a stable return, it underperformed its benchmark. Further, the decline in fund size and prevailing risks warrants caution. A BUY signal would be considered if the fund consistently outperforms its benchmark and demonstrates growth in fund size with effective risk management.