Strength-7

⚡ Flash Summary

Lakson Equity Fund (LEF) reported a strong first quarter for fiscal year 2026, ending September 30, 2025. The fund achieved a return of 32.84%, outperforming its benchmark by 1.11%. Pakistan’s economy shows signs of stabilization, and the Karachi Stock Exchange (KSE) 100 Index has seen a 33% increase. The fund is actively managed and invests primarily in equity and related securities, maintaining a 93% equity exposure.

📌 Key Takeaways

• 📈 LEF outperformed its benchmark by 1.11%, achieving a 32.84% return against the benchmark’s 31.73%.
• 💰 The fund’s size as of September 30, 2025, is PKR 6,408 million.
• 🏦 The fund maintains a 93% exposure in equities, with 6% in cash and 1% in other assets.
• 🏦 Sector allocation is skewed toward Commercial Banks (20.1%), Oil & Gas Exploration (12.9%), and Cement (17%).
• 🌱 Pakistan’s economy showed early signs of stabilization in the first quarter of FY26.
• 📉 CPI inflation averaged 3.5% YoY in July-August 2025, with the quarter averaging 4.2%, a notable decline from 9.2% last year.
• 💲 The current account deficit (CAD) reached USD 624 million for the first two months of FY26, compared to USD 430 million last year.
• ⬆️ Exports rose 11% YoY to USD 6.7 billion, while imports increased 10% to USD 12.5 billion.
• 💵 Foreign exchange reserves improved to USD 19.8 billion, with SBP reserves at USD 14.4 billion.
• 💹 The Pakistani Rupee appreciated by 0.9% FYTD, closing September at PKR 281.3/USD.
• ✅ A major development was the circular debt resolution agreement signed on September 24, 2025.
• 💹 The KSE-100 Index rose 41,114 points (33% QoQ) to close at 165,494.
• 📊 Average daily volumes surged 94% YoY and 52% QoQ, with the average traded value climbing to USD 156.1 million.
• 🎯 SBP expects GDP growth for FY26 to remain closer to the middle of the earlier 3.25-4.25% forecast range.

🎯 Investment Thesis

We recommend a BUY rating for Lakson Equity Fund. The fund’s strong Q1 FY26 performance, active management, and strategic sector allocations position it well for future growth. The improving macroeconomic environment, positive market sentiment, and resolution of circular debt enhance the investment thesis. The price target is 375.00 PKR with a time horizon of 12 months, targeting a 15% upside.