NBP-FUNDS

⚡ Flash Summary

NBP Money Market Fund (NMMF) reported its financials for the quarter ended September 30, 2025. The fund experienced a decrease in size by 17% from Rs. 120,292 million to Rs. 99,374 million. Despite the decrease in fund size, the unit price increased from Rs. 10.0328 on June 30, 2025, to Rs. 10.2800 on September 30, 2025. The fund generated a total income of Rs. 3,168.76 million and net income of Rs. 2,815.37 million after deducting expenses.

📌 Key Takeaways

• 📉 Fund Size Reduction: NMMF’s size decreased by 17%, from Rs. 120,292 million to Rs. 99,374 million.
• 📈 Unit Price Increase: Unit price rose from Rs. 10.0328 to Rs. 10.2800 during the quarter.
• 📊 Return: The fund showed a return of 9.8% p.a., compared to the benchmark return of 10.7% p.a.
• 💰 Total Income: The Fund earned a total income of Rs. 3,168.76 million.
• 💸 Net Income: After expenses of Rs. 353.39 million, the net income was Rs. 2,815.37 million.
• 🏦 Policy Rate: The State Bank of Pakistan (SBP) maintained the policy rate at 11%.
• 📉 Average Inflation: Average inflation for Q1 FY26 eased to 4.2%, down from 9.2% last year.
• 🎯 FY26 Inflation Target: Average inflation for FY26 is projected to remain within the SBP’s 5%-7% target range.
• 🌱 GDP Growth: Real GDP growth for FY26 is projected between 3.0% and 3.5%.
• ✔️ Current Account Deficit: The current account deficit was USD 624 million for July-August.
• 💹 Forex Reserves: Foreign exchange reserves stood at USD 14.4 billion on September 26th.
• 🥇 Stability Rating: NMMF’s stability rating by PACRA is ‘AA (f)’.
• 📜 Investment Guidelines: The Fund has strict investment guidelines and invests in T-Bills, Bank Deposits, and Money Market instruments.
• ⏳ Maturity Limit: The Fund is not allowed to invest in any security exceeding six months maturity, with weighted average time to maturity capped at 90 days.

🎯 Investment Thesis

HOLD. Given the stability rating of ‘AA (f)’ awarded by PACRA, NMMF remains a relatively safe investment option for risk-averse investors seeking steady returns. While the fund size decreased, its ability to generate positive net income is encouraging. The fund underperformed its benchmark which is a cause for concern. Monitor the fund’s performance relative to its benchmark and peer funds to assess whether it remains a competitive option for investors. The fund is managed by NBP Funds which is rated AM1 by PACRA.

⚡ Flash Summary

NBP Mustahkam Fund’s report for the quarter ended September 30, 2025, reveals a mixed performance. The fund’s NBP Fixed Term Munafa Plan – IVA increased in size by 3% to Rs. 10,789 million, with a unit price increase reflecting a 10.6% p.a. return, underperforming its benchmark of 12.2%. The NBP Fixed Term Munafa Plan – IIB closed at Rs. 13,316 million, achieving a 10.7% p.a. return against a benchmark of 10.8%. Overall, macroeconomic conditions are stabilizing with SBP prioritizing price stability.

📌 Key Takeaways

• 📈 NBP Mustahkam Fund – NBP Fixed Term Munafa Plan – IVA (NFTMP-IVA) size increased by 3% to Rs. 10,789 million.
• 💰 Unit price of NFTMP-IVA increased to Rs. 10.2749, showing a return of 10.6% p.a.
• 📉 NFTMP-IVA’s return underperformed its benchmark of 12.2% p.a.
• 💸 NFTMP-IVA earned a total income of Rs. 287.97 million during the year.
• Expenses of NFTMP-IVA were Rs. 8.48 million, resulting in a net income of Rs. 279.49 million.
• 📊 NFTMP-IVA’s assets are heavily allocated to T-Bills (101.60%).
• 🏦 NBP Mustahkam Fund – NBP Fixed Term Munafa Plan – IIB (NFTMP-IIB) closed at Rs. 13,316 million.
• ⭐ Unit price of NFTMP-IIB increased to Rs. 10.0759, showing a return of 10.7% p.a.
• ✅ NFTMP-IIB’s return closely tracked its benchmark of 10.8% p.a.
• 💸 NFTMP-IIB earned a total income of Rs. 123.65 million during the year.
• Expenses of NFTMP-IIB were Rs. 3.43 million, resulting in a net income of Rs. 120.22 million.
• 💯 NFTMP-IIB’s assets are entirely allocated to Cash Equivalents & Other Net Assets (AAA).
• ✔️ The State Bank of Pakistan (SBP) maintained the policy rate at 11% to contain inflation.
• Inflation rose to 5.6% in September, but the average for Q1 eased to 4.2%.
• Foreign exchange reserves stood at USD 14.4 billion on September 26th.

🎯 Investment Thesis

Given the slightly underperforming IVA plan compared to its benchmark, alongside the IIB plan tracking its benchmark closely, and considering the stabilizing macroeconomic environment, a HOLD recommendation is appropriate for NBP Mustahkam Fund. Further improvements in investment strategy and macroeconomic conditions may warrant a more positive outlook. With more details about the portfolio’s holdings, a stronger assessment could be determined. It would be more suitable for risk adverse investors.

⚡ Flash Summary

NBP Riba Free Savings Fund (NRFSF) reported its financial results for the quarter ended September 30, 2025. The fund’s size decreased by 28% from Rs. 31,620 million to Rs. 22,613 million. The unit price increased from Rs. 10.3479 on June 30, 2025, to Rs. 10.5985 on September 30, 2025, showing a return of 9.6% p.a. The fund earned a total income of Rs. 606.26 million, with a net income of Rs. 547.98 million after deducting expenses.

📌 Key Takeaways

• 📉 **Fund Size Contraction:** The fund’s size decreased by 28%, from Rs. 31,620 million to Rs. 22,613 million.
• 📈 **Unit Price Appreciation:** Unit price increased from Rs. 10.3479 (June 30, 2025) to Rs. 10.5985 (September 30, 2025).
• ✅ **Competitive Return:** The fund generated a 9.6% p.a. return, compared to a benchmark of 9.5% p.a.
• 💰 **Total Income:** The fund earned a total income of Rs. 606.26 million during the quarter.
• 💸 **Net Income:** After deducting expenses of Rs. 58.28 million, the net income amounted to Rs. 547.98 million.
• 📊 **Cash Allocation:** Cash equivalents and other net assets constitute 81.86% of the fund’s asset allocation.
• 📜 **Sukuk Holdings:** Corporate Sukuk Certificates account for 8.38% of the fund’s asset allocation.
• 🤝 **Musharakah Investments:** Certificates of Musharakah represent 9.76% of the fund’s asset allocation.
• 🏦 **Policy Rate Maintained:** The State Bank of Pakistan (SBP) maintained the policy rate at 11%.
• 📉 **Inflation Easing:** Average inflation for Q1 eased to 4.2%, down from 9.2% last year.
• 🎯 **FY26 Inflation Target:** Average inflation for FY26 is projected within SBP’s 5%-7% target range.
• 🌱 **GDP Growth Projection:** Real GDP growth for FY26 is projected between 3.0% and 3.5%.
• ✔️ **Current Account Deficit:** Current account deficit was USD 624 million for July-August.
• 💵 **Forex Reserves:** Foreign exchange reserves stood at USD 14.4 billion on September 26th.

🎯 Investment Thesis

Given the fund’s contraction in size, conservative asset allocation, and competitive returns, a HOLD recommendation is appropriate. The fund is suitable for risk-averse investors seeking stable returns in line with Islamic finance principles. Further analysis is needed to assess the reasons behind the fund’s size decrease and potential for future growth. The current price of 10.5985, considering the 9.6% return, seems fair. However, without a deeper analysis of the sector and more detailed financial ratios, a more specific valuation is not possible. Target price: Maintain current price. The fund seems to be trading near par.

⚡ Flash Summary

NBP Funds has announced the rebalancing of the NBP Pakistan Growth ETF (NBPGETF), effective November 7, 2025. This rebalancing is in compliance with regulatory requirements and the fund’s offering document. The process will involve adjusting the ETF’s portfolio based on a previous basket, during which the indicative Net Asset Value (iNAV) may not accurately represent the underlying basket. The exchange will be informed once the portfolio reconstitution is complete, and TRC Certificate Holders will be updated accordingly.

📌 Key Takeaways

• 🗓️ Rebalancing of NBP Pakistan Growth ETF (NBPGETF) is scheduled for November 7, 2025.
• 📜 The rebalancing adheres to Section 96 of the Securities Act, 2015, and PSX regulations.
• 🔄 NBPGETF’s portfolio will be adjusted as part of the rebalancing process.
• 📊 iNAV dissemination will continue during reconstitution but may not be fully representative.
• 📢 The Pakistan Stock Exchange will be notified upon completion of the portfolio reconstitution.
• ⚠️ Investors should note potential temporary discrepancies in iNAV during the rebalancing period.
• 💼 The rebalancing aims to align the ETF with the NBP Pakistan Growth Index.
• 📄 The announcement serves to inform TRC Certificate Holders of the upcoming changes.
• 🔍 Monitoring of the reconstitution’s impact on ETF performance is advisable.
• ✉️ NBP Funds is managing the rebalancing process.
• 🏢 Muhammad Murtaza Ali, COO & Company Secretary, is the point of contact.
• 📍 The announcement originates from NBP Fund Management Limited in Karachi.
• 🌐 Further information can be found on NBP Funds’ website.
• 📞 Contact information is provided for inquiries and assistance.

🎯 Investment Thesis

Given the informational nature of this announcement, a HOLD rating is appropriate. The rebalancing is a standard operational procedure to maintain the fund’s alignment with its benchmark index. Investors should monitor the fund’s performance post-rebalancing to assess any impacts on returns and risk profile. A neutral outlook is warranted until further details on the portfolio composition and performance are available.