Pakistan Strategy: Strategy 2025 - Choosing the Right Direction Towards Stability – By IIS Research

Dec 12 2024


Ismail Iqbal Securities


  • “The haystack is golden, but it’s the needle that will shine.” This sentiment captures the current state of Pakistan’s equity market. After a remarkable 70% CY24TD run-up in the KSE-100 Index, Pakistan’s equity market has undoubtedly rewarded investors handsomely. However, with the market now trading at a forward P/E multiple of 5.4x still below its historical average of 8x, selective opportunities remain. The broad undervaluation narrative is fading as prices adjust, but specific sectors continue to offer compelling value. Cyclical sectors like cement, steel, and autos may benefit further from economic momentum, while defensive plays with robust dividend yields remain attractive for yield-seeking investors. The challenge now lies in stockpicking rather than blanket exposure, as the low-hanging fruit has been largely picked. It’s a time for strategic focus, not sweeping bets.
  • The SBP’s recent interest rate cut has significantly enhanced the attractiveness of the KSE-100 Index, as local liquidity, which had been subdued over the last two years due to high interest rates, is now expected to shift into the equity market. In the past, money markets and income funds offered higher rates, drawing capital away from equities, but as these rates now decrease, more funds are likely to flow into the PSX. Despite foreign investors selling of $164 million so far, this fiscal year, local investors have stepped in to absorb the outflow. Notably, mutual funds have been the primary buyers, purchasing a net $191 million, followed by corporate investors, signaling growing confidence in the market. The influx of local capital, bolstered by the SBP’s easing policy, is poised to provide a significant boost to the liquidity and overall potential of the KSE-100.

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Commercial Bank: 1QCY25 Universe earnings to grow 13%QoQ - By Taurus Research

Apr 18 2025


Taurus Securities


  • We expect 1QCY25 TSL Banking Universe earnings to grow 13% QoQ on account of lower cost of funds and provisions. Wherein, UBL and BAFL have already announced their results posting 39% QoQ growth and 52%QoQ growth in profitability, respectively. On an annualized basis, we anticipate earnings to go up 5%.
  • During the period, the State Bank of Pakistan cut its policy rate by 100bps to 12%. Resultantly, the industry spread on outstanding loans and deposits is estimated to have averaged ~6.50% as compared an average of 5.39% in the previous quarter—on the back of the re-pricing lag between the assets and the liability side.
  • Nevertheless, we anticipate a cumulative re-pricing of ~900bps in asset yields to have taken place by the period when compared to the corresponding period last year. Hence, affecting the interest incomes, specially on the investment books.
Pakistan Fertilizer: 1QCY25E Result Preview: Muted offtakes to weigh on profitability - By AKD Research

Apr 18 2025


AKD Securities


  • AKD Fertilizer Universe’s profitability is projected to decline by 16%YoY in 1QCY25E, primarily due to lower offtakes.
  • Company-wise, FFC profitability is expected to rise by 46%YoY post-merger, while EFERT and FATIMA earnings are projected to decline by 65%/6%, respectively.
  • FFC payout is expected to increase by 63%YoY, while EFERT dividend is projected to fall by 75%YoY
Economy: Pakistan’s Trade Deficit Narrowed in March’25 - By Sherman Research

Apr 18 2025


Sherman Securities


  • A detailed breakdown of trade numbers released by the Pakistan Bureau of Statistics (PBS) shows that, on a monthly basis, imports remained flat at US$4.8bn during Mar’25. This stability was primarily driven by lower imports in the petroleum and food sectors on a weighted average basis, while agriculture imports increased.
  • On cumulative basis, import bill was recorded at US$42.7bn (up 9%YoY) during 9MFY25 mainly due to higher imports of machinery, textile and agriculture, while petroleum and food imports declined.
  • Exports increased to US$2.6bn (up 6%MoM) during Mar’24. Likewise, during 9MFY25, exports clocked in at US$24.7bn (up 8%YoY), mainly due to growth in exports in the food and textile sectors.
Pakistan Economy: Power sector circular debt resolution plan in the offing - By Foundation Research

Apr 18 2025


Foundation Securities


  • Pakistan's power sector has become a key challenge in the country's macroeconomic balancing act. Stabilizing the economy hinges on resolving power sector issues, which took center stage in recent IMF negotiations for the $7 billion Extended Fund Facility. In a bid to settle the amount in a single go, the government has plans to inject Rs1.5 trillion to tackle the circular debt crisis, clearing overdue liabilities and paving the way for sector stability.
  • Commercial banks will provide nearly Rs1.275 trillion of the bailout package, despite already having significant exposure to the power sector's circular debt. The deal, negotiated between the government and banks, offers below-KIBOR interest rates, potentially saving the government 3-5% on debt servicing costs. Contrary to news flow of banks being pressured into the deal, top banking executives and government officials have assured that the agreement was reached mutually.
  • According to news flow, a term sheet was signed between the government and banks at a large commercial bank in Karachi, with disbursements slated to begin next month. This financial intervention aims to curb the energy crisis and prevent further debt accumulation.
Economy: Mar-2025: Current Account posts historic surplus - By JS Research

Apr 18 2025


JS Global Capital


  • Pakistan's current account balance posted a massive surplus of US$1.19bn in Mar-2025, bringing the 9MFY25 current account surplus to US$1.86bn. The improvement was driven by record-high remittances, with Mar-2025 inflows reaching US$4.1bn, a 37% YoY surge.
  • Balance of Payments (BoP) remained negative this month as well due to loan repayments. Monthly BoP figure has turned negative for the fifth time FY25TD. However, BoP balance remains in positive territory for 9MFY25.
  • We highlight that some planned foreign inflows have not materialized, likely to be unlocked post IMF disbursement. SBP governor recently revised the Jun-2025 reserves forecast to US$14bn, up from previous estimate of US$13bn. To note, SBP’s reserves have declined by ~US$1.1bn since Dec-24 while Import cover is down from 2.8months to 2.1months.
Pakistan Textile: Mar’25 Textile exports up 10%YoY - By Taurus Research

Apr 18 2025


Taurus Securities


  • Textile exports arrived at USD 1.43Bn in Mar’25 as compared to USD 1.3Bn in the SPLY, reflecting a growth of ~10%YoY. Whereas, on a monthly basis it only increased by 1%MoM. The increase was mainly due to the higher exports of cotton yarn, knitwear, bed wear, ready-made garments, art & silk, made-up articles and other textiles up 30%YoY, 15%YoY, 19%YoY, 12%YoY, 9%YoY, 10%YoY and 11%YoY, respectively. Moreover, 9MFY25 textile exports increased 9%YoY to USD 13.6Bn as compared to USD 12Bn in the SPLY
  • In Mar’25, Basic textile exports totaled USD 205Mn, down ~2% YoY, mainly attributed to decline in exports of cotton cloth and yarn. Whereas, value added exports showed a significant increase of 13%YoY along with a 9%YoY increase in other textiles.
Morning News: March C/A posts $1.2bn surplus - By Vector Research

Apr 18 2025


Vector Securities


  • Pakistan’s current account posted a record all-time high monthly surplus of $1.2 billion in March 2025, fueled by historic inflows of home remittances, according to data released by the State Bank of Pakistan (SBP) on Thursday.
  • Foreign Direct Investment (FDI) into Pakistan rose by 14 percent during the first nine months of this fiscal year (FY25). According to the State Bank of Pakistan (SBP), the country fetched FDI amounting to $1.644 billion in July-March of FY25 compared to $1.442 billion in the same period of last fiscal year (FY24), showing an increase of $202 million. During the period under review, FDI inflows were $2.472 billion as against $828 million outflow.
  • Pakistan’s central bank’s foreign exchange reserves dropped by $127 million to $10.57 billion during the week ended April 11 due to external debt repayments, the State Bank of Pakistan (SBP) said on Thursday. The total liquid foreign reserves held by the country also decreased by $91 million to $15.66 billion. However, the reserves of commercial banks increased by $36 million to $5.09 billion.
Technical Outlook: KSE-100; Consolidation to continue - By JS Research

Apr 18 2025


JS Global Capital


  • The KSE-100 index witnessed positive movement to close at 116,901, up 881 points DoD. Volumes stood low at 408mn shares compared to 482mn shares traded in the previous session. The index is currently trading above the 30-DMA and the 50-DMA that will restrict downside at 115,828 and 114,617 levels, respectively. However, any upside will face resistance in the range of 117,210-118,050 levels where a break above targeting 118,718 level. The RSI and the Stochastic Oscillator have moved up, supporting a positive view. We recommend investors to ‘Buy on dips’, keeping stoploss below the 30-DMA. The support and resistance levels are at 116,074 and 117,472 levels, respectively.
Morning News: March C/A posts $1.2bn surplus - By WE Research

Apr 18 2025



  • Pakistan recorded a historic monthly current account surplus of $1.2 billion in March 2025, driven by unprecedented remittance inflows of $4.1 billion, according to the State Bank of Pakistan. This marked a 229% increase from March 2024 and a significant reversal from February 2025’s deficit. Cumulatively, the current account showed a $1.859 billion surplus in July–March FY25, compared to a $1.652 billion deficit in the same period last year. Analysts hailed this as a vital boost for the economy, easing pressure on the rupee, supporting foreign reserves, and reducing reliance on external borrowing. While the trade deficit widened to $18.73 billion due to increased imports, moderate export growth and a $2.32 billion services deficit highlighted ongoing challenges. Despite persistent financial pressures and IMF support under a $7 billion program, Pakistan’s external sector is showing signs of recovery backed by policy reforms and improved macroeconomic stability.
  • Foreign Direct Investment (FDI) in Pakistan rose by 14% in the first nine months of FY25, reaching $1.644 billion compared to $1.442 billion during the same period in FY24, primarily due to strong inflows from China and Hong Kong and increased investment in the financial services and power sectors. China contributed the largest share at 41%, with its FDI doubling to $684.5 million. Despite this overall growth, March 2025 saw a sharp month-on-month decline of 91% in FDI. Economists attribute the positive trend to improved macroeconomic stability and IMF-backed reforms, but warn that sustained growth depends on consistent policies and political stability to maintain investor confidence.
  • Pakistan’s textile exports grew by 9.38% during July–March FY25, reaching $13.613 billion compared to $12.445 billion in the same period last year, according to the Pakistan Bureau of Statistics (PBS). Overall exports rose by 7.82% to $24.719 billion, with March 2025 exports totaling $2.646 billion—up 6.27% from February and 3.08% year-on-year. Textile exports in March specifically increased by 9.97% from February. However, rice exports declined by 5.91%, totaling $2.757 billion compared to $2.930 billion last year. Key export commodities in March included knitwear, readymade garments, bedwear, various rice types, cotton cloth, towels, and petroleum products, highlighting continued strength in the textile sector despite weaknesses in agricultural exports.
Lotte Chemical Pakistan Limited (LOTCHEM): 1QCY25 EPS clocked in at PKR0.44 – Below expectation - By Insight Research

Apr 17 2025


Insight Securities


  • LOTCHEM has announced its 1QCY25 result, wherein company has posted PAT of PKR0.7bn (EPS: PKR0.44) vs. PAT of PKR0.9bn (EPS: PKR0.59) in SPLY. The result is below our expectation due to lower than estimated revenue.
  • In 1QCY25, revenue decreased by 33% YoY, due to lower volumetric sales. While on QoQ basis, same is up by 6% possibly due to higher PTA prices and volumetric sales.
  • Gross margins of the company clocked in at 6.2%, up by 100bps/540bps YoY/QoQ, due to improved core delta.
Lotte Chemical Pakistan Limited (LOTCHEM): Earnings Hold Steady as PTA Margins Remain Underwhelming - By IIS Research

Apr 16 2025


Ismail Iqbal Securities


  • We expect LOTCHEM to report a PAT of PKR 779 million (EPS: PKR 0.51) for 1QCY25, compared to LPS 0.01 in last quarter. This improvement comes as operations normalize following a one-month plant turnaround last quarter. PTA sales volumes are also anticipated to recover to typical levels. However, PTAPX margins have averaged USD 100/ton this quarter, lower than the USD 122/ton in the past six years and the long term average of USD 110/ton, largely due to global dynamics and subdued international demand.
  • Additionally, this quarter is affected by the recent gas price hike. Where, the gas price for captive power plants has increased to Rs 3,500 per MMBtu, effective February 1, 2025. While this increase poses some pressure, it's worth noting that LOTCHEM’s cost structure and margins are largely driven by international PTA-PX spreads. Notably, in CY24, only around 7% of COGS was from oil, gas, and electricity expenses. Furthermore, the company is in the process of being acquired, as AsiaPak Investments Limited and Montage Oil DMCC entered into a share purchase agreement to acquire a 75.01% stake in LOTCHEM.
Economy: Sweeping Tariff Hikes Announced - By IIS Research

Apr 4 2025


Ismail Iqbal Securities


  • On April 2, 2025, U.S. President Donald Trump announced a new set of tariffs aimed at reducing trade imbalances and protecting American industries. Starting April 5, a 10% tariff will apply to all imports into the United States. In addition, much higher tariffs will be imposed on certain countries, including a 34% tariff on Chinese goods and a 20% tariff on European Union exports, beginning April 9. The U.S. government believes these actions will help bring back manufacturing jobs and reduce its trade deficit. However, the move has caused strong reactions from affected countries like China and the EU, who have promised to take countermeasures. Global markets have already reacted negatively, with Asian stock markets falling sharply and U.S. and European futures showing losses. Experts are warning that these tariffs could increase inflation, raise production costs, and slow down economic growth both in the U.S. and worldwide.
  • For Pakistan, this situation presents both challenges and possible advantages. In 2024, Pakistan exported around $5.7 billion worth of goods to the U.S., and 80– 85% of that was textile-related products such as garments, home textiles, and fabrics. Pakistani textile exports will face a 29% tariff in the U.S., which is high compared to many other countries. However, with the U.S. now increasing tariffs even more on countries like China, Vietnam, and Bangladesh—Pakistan’s main competitors in textiles there could be a window of opportunity. If U.S. buyers look for cheaper alternatives to avoid higher tariffs on Chinese and Vietnamese goods, Pakistani products may become more attractive.
Morning News: IMF objects to govt move to borrow Rs1.25tr for circular debt resolution - By IIS Research

Mar 10 2025


Ismail Iqbal Securities


  • Pakistan and the International Monetary Fund (IMF) are poised to make key adjustments to the country’s macroeconomic and fiscal framework for the current fiscal year 2024-25. The upcoming policy-level talks, scheduled to commence from Monday, will finalize these adjustments.
  • The government is negotiating a Rs1.25 trillion ($4.47 billion) loan with commercial banks to reduce its bulging energy sector debt, the power minister and banking association said.
  • Energy Minister Awais Ahmad Khan Leghari on Sunday announced that no new surcharge would be imposed on electricity consumers to settle the Rs2400 billion circular debt
Economy: IMF Review Underway: Fiscal Discipline and Revenue Challenges in Focus - By IIS Research

Mar 3 2025


Ismail Iqbal Securities


  • A delegation from the International Monetary Fund (IMF) has arrived in Pakistan to conduct an economic review and determine the release of the next $1 billion tranche under the $7 billion loan program, with discussions set to continue until March 15.
  • As of now, there is a PKR 606 billion shortfall in the revenue target. However, we believe this can be largely offset by savings on interest costs, driven by the sharp 1,000 bps reduction in policy rates and a continued decline in government borrowing costs. With market yields already adjusting downward and a shift toward cheaper domestic financing, the government's overall debt servicing burden is easing. This should provide some fiscal space to absorb the revenue gap without requiring aggressive expenditure cuts or additional taxation in the near term.
Lucky Cement Limited (LUCK): 1HFY25 Corporate Briefing Takeaways - By IIS Research

Feb 21 2025


Ismail Iqbal Securities


  • Lucky Cement Limited (LUCK) held its corporate briefing today to discuss the financial results of 1HFY25 and future outlook of the company. Key highlights of the briefing are follows:
  • Local dispatches of the industry declined by 10.4% YoY, reaching 18.1mn tons in 1HFY25 due to subdued demand, while exports saw a significant growth of 31.7% YoY. Local demand showed some improvement in 2QFY25, reflecting an increase of 22.8% QoQ. Looking ahead, the company expects demand to recover from this negative double-digit growth, hinging on factors such as decrease in interest rates. However, Ramazan and Eid factor will likely affect the sales in 2HFY25.
  • For LUCK, total dispatches increased by 8.7% YoY in 1HFY25, primarily driven by rise in exports, as the company continues to explore different export destinations. However, local dispatches declined by 14%, in line with the industry trend.
Morning News: Oil extends gains on strong US demand hopes, Russia supply concerns - By IIS Research

Feb 21 2025


Ismail Iqbal Securities


  • Oil prices extended gains on Friday, headed for a weekly increase, as falling inventories of U.S. gasoline and distillate raised expectations of solid demand while concerns over supply disruptions in Russia lent support. Brent futures climbed 16 cents, or 0.2%, to $76.64 a barrel by 0123 GMT. U.S. West Texas Intermediate crude edged up 17 cents, or 0.2%, to $72.65. Both benchmarks were set for a weekly gain of about 3%.
  • Federal Minister for Finance Muhammad Aurangzeb said on Thursday that the “country has lost its credibility,” emphasising that urgent economic reforms are necessary to restore trust. During a meeting of the Senate Standing Committee on Climate Change, headed by Senator Sherry Rehman, the top financial czar briefed lawmakers on the country’s climate financing challenges and its negotiations with international lenders.
  • An International Monetary Fund mission will arrive in Islamabad next week to discuss around $1 billion in climate financing for Pakistan, an adviser to the country’s finance minister said on Thursday. Khurram Schehzad told Reuters that the mission would visit from February 24 to 28 for a “review and discussion” of climate resilience funding.
Habib Bank Limited (HBL): Corporate Briefing Takeaways - By IIS Research

Feb 20 2025


Ismail Iqbal Securities


  • Habib Bank Limited held its corporate briefing today to discuss the financial results of 4QCY24 and future outlook of the bank. The key takeaways of the briefing are listed below:
  • In 4QCY24, wherein the bank posted consolidated profit of PkR14.4bn (EPS: PkR9.8) for the quarter (down 3%YoY/flat on QoQ). Further, the bank also announced final cash dividend of PkR4.25/share, taking total CY24 dividend to PkR16.25/sh (vs. PKR9.5sh in CY23).
  • Total deposits grew by 5.5% from Dec’23 to ~PKR 4.4 trn, with domestic deposits rising by PKR180 bn (5%), primarily driven by an increase in current accounts (PKR 176 bn). Average domestic deposits saw a significant YoY increase of PKR 627 Bn, mainly supported by PKR 405 Bn in low cost deposits. International deposits also expanded to $2.2 Bn, reflecting a $192 million increase over Dec’23. Bank expects 17-18% growth in deposits during CY25
Maple Leaf Cement (MLCF): Earnings surge 3x QoQ on Higher Sales - By IIS Research

Feb 20 2025


Ismail Iqbal Securities


  • Maple Leaf Cement (MLCF) announced its 2QFY25 results today, where the company posted consolidated PAT of PKR 3.7bn (EPS: PKR 3.57) vs. PKR 1.3bn (EPS: PKR 1.28) in the previous quarter, reflecting a 3x QoQ increase. The result is above our expectations, mainly due to higher than projected revenue and gross margins.
  • The company’s topline grew by 21% QoQ to PKR 19bn, likely driven by 17% QoQ increase in total dispatches and improved export prices. On a YoY basis, revenue went up by 5%, supported by higher bag prices despite a 6% YoY decline in dispatches.
  • Gross margins stood at 40% compared to 32% in the previous quarter, benefiting from improved margins on white cement, an efficient fuel mix, and a decline in coal prices.
Morning News: IMF, govt teams to discuss energy reform mechanism - By IIS Research

Feb 17 2025


Ismail Iqbal Securities


  • The International Monetary Fund (IMF) and government’s teams will discuss viable mechanism to extend electricity and gas tariff differential subsidy through Benazir Income Support Fund (BISP), adjustment of gas prices quarterly and additional levy on vehicles on use of liquid fuels on Tuesday (tomorrow), well informed sources in Finance Ministry told Business Recorder.
  • Supreme Court Bar Association of Pakistan (SCBAP) president met with representatives from the Governance and Corruption Diagnostic Assessment team of the International Monetary Fund (IMF) in Islamabad.
  • The International Finance Corporation (IFC) has announced plans to boost equity investments and target large-scale infrastructure financing in Pakistan, according to Radio Pakistan.
Engro Fertilizers Limited (EFERT): 4QCY24 Corporate Briefing Takeaways - By IIS Research

Feb 14 2025


Ismail Iqbal Securities


  • Engro Fertilizers Limited held its corporate briefing today to discuss the financial results of CY24 and future outlook of the company. Key highlights of the briefing are follows.
  • To recall, in 4QCY24 the company has posted consolidated earnings of PKR 7.7/share (PKR 21.16/share in CY24). Alongside the result, the company announced a cash dividend of PKR 8.00/share (PKR 21.50/share in CY24).
  • The company highlighted the YoY improvement in annual performance, from revenue to EPS. However, quarterly results showed a 7.8% YoY decline in PAT, driven by discounts offered to dealers. The gross margin for 4QCY24 stood at 35%, up from 31% in the previous quarter, attributed to the reclassification of expenses for better presentation.