⚡ Flash Summary

NBP Islamic Stock Fund (NISF) reported a net income of Rs. 2,387.13 million for the quarter ended September 30, 2025, after deducting total expenses of Rs. 93.95 million from a total income of Rs. 2,481.08 million. The fund size increased by 60.3% to Rs. 12,084 million. However, the fund underperformed its benchmark (KMI-30 Index) by 4.9% during the period, with the fund’s unit price increasing by 28.3% compared to the benchmark’s 33.2%. The asset allocation is heavily weighted towards Oil & Gas Exploration Companies (28.0%) and Cement (14.9%).

📌 Key Takeaways

• 📈 KMI-30 Index delivered a strong 33% return during 1QFY26.
• 💰 NISF’s size increased significantly by 60.3%, reaching Rs. 12,084 million.
• ⚠️ Fund underperformed its benchmark by 4.9% during the quarter.
• ⬆️ Unit price of NISF increased by 28.3% to Rs. 24.5598.
• 📊 Benchmark (KMI-30 Index) increased by 33.2% during the same period.
• ✔️ Net income for the period stood at Rs. 2,387.13 million.
• Expenses totaled Rs. 93.95 million.
• 🌍 Current account deficit widened to USD 624 million during 2MFY26.
• 💵 Foreign exchange reserves remained stable at USD 14.4 billion as of September 26, 2025.
• 🤝 IMF’s second review under EFF concluded, unlocking USD 1.2 billion in financial assistance.
• 🌱 FY25 GDP growth revised upward to 3.04%.
• 🏦 Mutual Funds, Individuals, and Companies emerged as the largest net buyers.
• 🛑 Banks/DFIs, Foreign Investors, and Other Organizations reduced their net holdings.
• ⭐ PACRA assigned an Asset Manager Rating of AM1 and a performance ranking of ‘3-Star’ to the fund.
• ⛽ Asset allocation heavily weighted towards Oil & Gas Exploration (28.0%) and Cement (14.9%) sectors.

🎯 Investment Thesis

Given the fund’s underperformance relative to its benchmark, a HOLD recommendation is appropriate. While the fund has shown substantial growth in size, the underperformance indicates potential issues with stock selection or investment strategy. Investors should monitor the fund’s performance closely and assess whether changes are being made to address the underperformance. Before considering a BUY rating, there needs to be demonstrated improvement in the fund’s ability to generate returns in line with or exceeding its benchmark. A SELL recommendation would be considered if underperformance continues or if the risk factors increase significantly.