Strength-6

⚡ Flash Summary

Lakson Tactical Fund (LTF) reported a strong first quarter for FY26, outperforming its benchmark by 3.27% with an absolute return of 13% against the benchmark’s 9.73%. The fund’s size as of September 2025 is PKR 611.78 million. Pakistan’s economy showed early signs of stabilization in the first quarter of FY26, with inflation easing and foreign reserves improving. S&P Global upgraded Pakistan’s sovereign credit rating to B- from CCC+ on July 24, 2025, with a Stable Outlook.

📌 Key Takeaways

• 📈 LTF outperformed its benchmark by 3.27% in Q1 FY26.
• 💰 The fund generated an absolute return of 13%, compared to the benchmark return of 9.73%.
• ⚖️ As of September 2025, the fund size of LTF is PKR 611.78 million.
• 🏦 The fund maintains 44% exposure in Tbills.
• 🧱 Sector allocation is skewed towards Commercial Banks (6.1%), Oil & Gas Exploration (2.8%), and Fertilizer (2.3%).
• ✅ Pakistan’s economy showed early signs of stabilization in the first quarter of FY26.
• 📉 CPI inflation averaged 3.5% YoY in July-August 2025, rising to 5.6% in September, averaging 4.2% for Q1 FY26, down from 9.2% last year.
• ⬆️ Exports rose 11% YoY to USD 6.7 bn, while imports increased 10% to USD 12.5 bn.
• 💸 Foreign exchange reserves improved to USD 19.8 bn by the end of September, with SBP reserves at USD 14.4 bn.
• 🇵🇰 The Pakistani Rupee appreciated by 0.9% FYTD, closing September at PKR 281.3/USD.
• 🤝 A circular debt resolution agreement was signed on 24 Sep’25, paving the way for a PKR 1.225trn bank loan.
• 💯 The KSE-100 Index maintained strong momentum in 1QFY26, rising 41,114 points (33% QoQ) to close at 165,494.
• ⏫ Average daily volumes surged 94% YoY and 52% QoQ in the equity market.
• 🥇 Top Gainers in scrips included UBL (3,551 pts.), HUBC (3,084 pts.), and FFC (2,525pts.).
• ⭐ S&P Global upgraded Pakistan’s sovereign credit rating to B- from CCC+ on 24 Jul’25, with a Stable Outlook.

🎯 Investment Thesis

Based on LTF’s outperformance, positive economic indicators for Pakistan, and upgrade in sovereign credit rating, a HOLD recommendation is warranted. The fund’s strategic asset allocation and focus on key sectors position it for continued growth. However, potential risks require careful monitoring.

⚡ Flash Summary

LAKSON-FUNDS is reviewing the quarterly report for the Lakson Income Fund (LIF) for the period ended September 30, 2025. The LIF posted an annualized return of 10.76% compared to the benchmark of 10.66%, outperforming by 0.1%. The fund size as of September 30, 2025, is PKR 15,814 million. The report also highlights improvements in Pakistan’s economy, with inflation easing and foreign reserves improving, although recent floods pose downside risks.

📌 Key Takeaways

• 📈 LIF outperformed its benchmark by 0.1%, achieving a 10.76% annualized return.
• 💰 The fund size reached PKR 15,814 million as of September 30, 2025.
• 📊 Asset allocation is heavily concentrated in cash (20.2%) and T-bills (29.8%).
• ⚖️ Weighted average maturity (WAM) of the LIF portfolio stands at 703 days.
• 🚫 LIF did not utilize its borrowing facility during the reviewed period.
• 📉 Pakistan’s Q1-FY26 average inflation saw a notable decline to 4.2% from 9.2% in the same period last year.
• 💸 The current account deficit (CAD) reached USD 624 mn for the first two months of FY26.
• 💹 Exports rose 11% YoY to USD 6.7 bn, driven by textiles and food.
• ⬆️ Remittances offered further support, growing 7% to USD 6.35 bn.
• 🏦 Foreign exchange reserves improved to USD 19.8 bn by the end of September.
• 🇵🇰 The Pakistani Rupee appreciated by 0.9% FYTD, closing September at PKR 281.3/USD.
• 🤝 A major circular debt resolution agreement was signed on 24 Sep’25, paving the way for a PKR 1.225trn bank loan.
• ✔️ S&P Global upgraded Pakistan’s sovereign credit rating to B- from CCC+ on 24 Jul’25.
• 💹 The KSE-100 Index rose 41,114 points (33% QoQ) to close at 165,494 in 1QFY26.
• 🏦 The Central Bank maintained the policy rate at 11% in the Monetary Policy Committee meeting held in Sep-25.

🎯 Investment Thesis

Based on solid performance and an improving macro environment, the investment recommendation is HOLD. The LIF has demonstrated an ability to generate competitive returns in a challenging market. Given the positive trends in the Pakistani economy and the fund’s effective management, the outlook is stable. Any change will depend on future performance.