MCBIM-FUNDS

⚡ Flash Summary

MCB Pakistan Sovereign Fund’s report for the quarter ended September 30, 2025, indicates a mixed performance amid evolving economic conditions. The fund generated an annualized return of 9.44%, lagging behind its benchmark return of 10.65%. Net assets increased significantly by 30.76% to Rs. 37,677 million compared to the previous quarter. The NAV per unit rose to Rs. 56.34, showing a modest increase of Rs. 1.31 per unit. The fund maintains a substantial cash exposure of 17.7%.

📌 Key Takeaways

• 📈 Fund’s net assets increased by 30.76% to Rs. 37,677 million.
• 📊 NAV per unit increased by Rs. 1.31 to Rs. 56.34.
• 📉 Annualized return of 9.44% underperformed against a benchmark return of 10.65%.
• 💰 Cash exposure at period-end was 17.7%.
• 🌐 Pakistan’s revised GDP growth clocked at 3.0% in FY25.
• 📌 CPI averaged 4.2% during 1QFY26 compared to 9.2% in the corresponding period last year.
• 💸 FBR tax collection increased by 12.8% in 1QFY26 to PKR 2,885 billion, missing the target by PKR 198 billion.
• ⚠️ Country posted a current account deficit of USD 624 million in the first two months of fiscal year 2026.
• 💹 Remittances inflows grew at a healthy rate of 7.0% to USD 6.4 billion.
• 🔒 SBP’s foreign exchange reserves remained stable around USD 14.4 billion.
• 🇵🇰 USD/PKR appreciated by 0.9% to 281.3 during the fiscal year.
• 📉 The SBP has decreased interest rates by a cumulative 1,100bps since June-24, declining to 11.0% from 22.0%.
• 🔮 GDP growth is expected to clock at 3.5% in FY26, with agriculture at 2.8%.
• 🎯 Fiscal deficit is expected to clock in at 4.0% in FY26, the lowest since FY2006.
• 🏦 Open-end mutual funds industry increased by about 10.3% during 1QFY26 to PKR 4,065 billion.

🎯 Investment Thesis

Given the mixed performance, specifically, asset appreciation is positive, but failing to meet the benchmark is concerning. I would advise a HOLD position for MCBIM-FUNDS while monitoring the fund’s ability to increase returns. The price target is cautiously set at Rs. 57.00 based on a modest expected growth in NAV over the next quarter. Improved investment strategies are required to meet targets. This is a HOLD until improvements are seen.

⚡ Flash Summary

Pakistan Cash Management Fund (PCF) reported its quarterly performance for the period ended September 30, 2025. The fund generated an annualized return of 9.58%, falling short of its benchmark return of 10.66%. Net assets increased to Rs. 7,110 million from Rs. 6,299 million in the prior quarter, marking a 12.88% rise. The Net Asset Value (NAV) per unit remained unchanged at Rs. 50.4678. The fund’s strategy heavily favors cash positions at the end of the reporting period.

📌 Key Takeaways

• 📈 Fund’s net assets increased by 12.88% quarter-over-quarter, reaching Rs. 7,110 million.
• 📉 The annualized return of 9.58% underperformed its benchmark of 10.66%.
• 💰 NAV per unit remained constant at Rs. 50.4678.
• 🇵🇰 Country’s current account deficit widened to USD 624 million in the first two months of FY26.
• 💹 Trade deficit increased by 7.4% YoY, as exports grew by 10.2% and imports increased by 8.8%.
• 💸 Remittance inflows saw a 7.0% growth, amounting to USD 6.4 billion.
• 🏦 SBP’s foreign exchange reserves remained stable at approximately USD 14.4 billion.
• ⚖️ Local currency appreciated against the USD by 0.9%, reaching 281.3 PKR/USD.
• 📉 Headline inflation averaged 4.2% during the quarter, compared to 9.2% in the corresponding period last year.
• 🌱 Pakistan’s revised GDP growth was recorded at 3.0% in FY25.
• 🚜 Agricultural sector grew by 1.5%, while industrial and services sectors expanded by 5.3% and 3.0%, respectively.
• 🧾 FBR tax collection increased by 12.8% to PKR 2,885 billion but missed the target by PKR 198 billion.
• 📊 Mutual funds industry net assets increased by approximately 10.3% to PKR 4,065 billion in 1QFY26.
• 💸 Money market funds declined by 3.6% since June 2025 with conventional funds declining by 4.5% and Islamic funds by 2.7%.

🎯 Investment Thesis

HOLD. The fund’s underperformance against its benchmark raises concerns, but the increase in net assets indicates ongoing investor confidence. The high cash allocation provides stability but limits potential returns. A review of the fund’s investment strategy and expense management is warranted. A HOLD recommendation is appropriate until clearer signs of improved performance emerge.

⚡ 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.