Morning News: Economy seen growing at 3.4pc in FY25 – By WE Research

Jan 13 2025



  • Pakistan's economy is showing signs of recovery from the 2022-23 downturn, with a projected 3.4% GDP growth in FY25, according to the United Nations' latest economic survey. The IMF’s 37-month Extended Fund Facility (EFF) program, worth $7 billion, aims to address structural challenges, promote economic stability, and foster sustainable growth by focusing on reforms, policy credibility, competitiveness, state-owned enterprises, and climate resilience. Despite these efforts, risks such as geopolitical tensions, debt challenges, social unrest, and climate-related shocks, including extreme weather events, could hinder growth. The South Asian region is expected to see moderate GDP expansion, with inflation decreasing across most countries, including Pakistan, which has reduced key policy rates to support recovery. However, the region remains vulnerable to climate impacts, which have led to increased food prices and income inequality, particularly affecting rural households.
  • Pakistan saw a significant increase in workers' remittances, with $3.1 billion inflows in December 2024, reflecting a 29.3% year-on-year growth and a 5.6% month-on-month rise. Cumulatively, remittances reached $17.8 billion in the first half of FY25, up 32.8% from the previous year. Major sources included Saudi Arabia, the UAE, the UK, and the US. Analysts attribute the surge to efforts that narrowed the gap between black market and interbank exchange rates, a stable rupee, and the Pakistan Stock Exchange's strong performance. With ongoing government measures to regulate the remittance sector, including tighter controls on smuggling and improved documentation, remittance inflows are expected to exceed $35 billion by the end of FY25, a 35% increase from FY24. While improvements in dollar-rupee parity have bolstered this trend, experts caution against policies favoring export lobbies, arguing for broader currency stabilization measures.
  • Inflows through Pakistan's Roshan Digital Account (RDA) reached $203 million in December 2024, marking a 9% increase from November's $186 million, according to the State Bank of Pakistan (SBP). Of the December inflows, $13 million was repatriated, and $113 million was used locally, with a net repatriable liability of $76 million. The total number of RDA accounts grew to 778,713, up by 10,319 from the previous month. Cumulatively, RDA inflows reached $9.342 billion, with $1.7 billion repatriated and $5.911 billion utilized locally. The net outstanding liability was $1.73 billion as of Decemberend, with a significant portion in Naya Pakistan Certificates. Additionally, Roshan Equity Investments saw a 16% increase to $59 million. Launched in 2020, the RDA has become a crucial source of foreign exchange for Pakistan, offering competitive returns on dollar investments.

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Textiles: Pause-period for US tariffs ending today - By JS Research

Jul 8 2025


JS Global Capital


  • The 90-day pause period for the implementation of reciprocal tariffs expires today. Meanwhile, US govt plans to issue letters to all countries which have not struck a deal yet and are likely to face higher than previously announced tariffs effective 1st August, 2025.
  • Countries having completed successful round of bilateral trade agreements including Pakistan, are expected to face a lower tariff, however, a minimum baseline tariff of 10% is likely to remain. A formal notification of the same is likely to be announced along with other trading partners with negotiated contracts.
  • With softening of US stance towards Pakistan since the cease-fire between India and Pakistan and a potential successful round of dialogues between the two, optimism towards Pak Textile sector has gained strength, with an upside of 38% from its low seen in May-2025 and 21% from the pre-tariff announcement levels.
Cement: Capacity Utilization at Record Low, Huge Growth Potential - By Sherman Research

Jul 8 2025


Sherman Securities


  • Currently, cement sector is running on historical low utilization level of 55% versus last 30-year average utilization of 76%. The main reason for this significant decline is that although capacity has increased sharply, demand has remained subdued over the past few years. To note, cement capacity in Pakistan has increased to 84.6mn tons as compared to 9mn tons in FY92, (up 9x) during the years.
  • Historically, we have observed that capacity expansions have only been undertaken when utilization surpasses 80%, therefore, we do not expect any capacity expansion in the near term. Furthermore, the pause in expansion is expected to enhance the liquidity of companies, which could enable them to increase their payout going forward.
  • During FY25, local dispatches arrived at 37mn tons compared to 38.2mn tons during FY24. Thus, during last 4 years, cement sales posted consistent decline on annualized basis reaching at 8 – year low level in FY25.
Morning News: Reserves up: SBP eyes global bond market - By Next Research

Jul 8 2025


Next Capital


  • According to the central bank, reserves reached $14.5 billion by the end of June, surpassing the IMF’s target of $13.9 billion and exceeding even the Governor’s own projections. The hard work is paying off. SBP has been persistent in buying dollars from the interbank market, and now, finally, the international commercial financing channel has reopened. The next move is to tap into the international bond market — starting with the Panda bond, followed by a Eurobond issuance.
  • In a significant economic achievement, the government of Pakistan has demonstrated its firm commitment to fiscal discipline and long-term stability by retiring Rs 1.5 trillion in public debt ahead of schedule in FY25. This substantial early repayment has contributed to a notable improvement in Pakistan’s fiscal indicators, bringing the debt-to-GDP ratio down from 75 percent in FY23 to 69 percent in FY25.
  • The government has repaid a debt of Rs500 billion to the central bank ahead of its scheduled maturity in 2029, resulting in an early retirement of Rs1.5 trillion in public debt, a senior finance official said on Monday.
Technical Outlook: KSE-100; Upside likely - By JS Research

Jul 8 2025


JS Global Capital


  • The KSE-100 index witnessed a positive session to close at 133,370, up 1,421 points DoD. Volumes stood at 920mn shares compared to 733mn shares traded in the previous session. The index is likely to retest yesterday’s high of 133,862; a break above this level could target 135,232, with potential to rise further towards 137,549 level. Meanwhile, any downside will be tested between 132,460 and 132,610 levels, respectively. The RSI and MACD continue to rise, reinforcing the positive outlook. We advise investors to ‘Buy on dips,’ with risk defined below 130,716. The support and resistance are placed at 132,604 and 133,999, respectively.
Morning News: SBP governor speaks of policy mix: - By HMFS Research

Jul 8 2025


HMFS Research


  • Governor State Bank of Pakistan (SBP) Jameel Ahmad has said that unlike in the previous episodes of boom-bust cycles, the current policy mix remains conducive to a lasting increase in economic activity rather than a short-sighted, fragile, and populist ‘sugar rush’. Governor SBP also assured that SBP is fully committed to undertake structural reforms and lay the foundation for sustainable and inclusive economic growth. Both SBP and the government remain steadfast in their approach to transitioning from recently hard-earned economic stability to a medium-term economic transformation. This resolve is reflected in our prudent and cautious monetary policy stance, and fundamentals aligned exchange rate, and ongoing fiscal consolidation and improving debt dynamics.
  • The government has repaid a debt of Rs500 billion to the central bank ahead of its scheduled maturity in 2029, resulting in an early retirement of Rs1.5 trillion in public debt, a senior finance official said. Pakistan’s debtto-GDP ratio decreased from 75 percent in FY23 to 69 percent in FY25 due to early debt repayments. The successful buyback of Rs1 trillion in market debt, completed by December 2024, marked the first such operation in Pakistan’s history. Alongside this, the early repayment of the SBP Rs500 billion debt has collectively led to the early retirement of Rs1.5 trillion in public debt during FY25, said Khurram Schehzad, an advisor to the finance minister. The early retirement of central bank debt, executed by the Debt Management Office (DMO), marks a breakthrough in Pakistan’s debt management strategy. Early debt retirement while converting shorter tenure with longer-tenure debt significantly reduces concentration risk, lowers future liabilities, and strengthens the country’s macroeconomic foundations by curbing reliance on borrowings.
  • The Federal Board of Revenue (FBR) has notified businesses, including importers, suppliers, and manufacturers, of tightened restrictions under Section 21 of the Income Tax Ordinance for FY26, aimed at discouraging excessive cash dealings and broadening the tax net. Under the directive, any cash transaction exceeding PKR 200,000 will not be treated as an allowable business expense. Consequently: 50% of such expenditure will be recognized for tax purposes. The disallowed portion will attract an additional tax burden, effectively raising the cost by 20.5%.For completely disallowed transactions, the effective impact could surge to 79.5%. Businesses are urged to ensure all supplier and client payments are processed through proper banking channels to avoid heavy penalties and additional scrutiny by FBR
Market Wrap: Highlights of the day July 7, 2025 - By JS Research

Jul 7 2025


JS Global Capital


  • The KSE-100 Index surged 1.4% to an all-time intraday high of 133,862.01, driven by optimism over trade negotiations, macroeconomic stability, and a strong corporate earnings outlook. Falling inflation, strengthening FX reserves, and capital inflows are enhancing investor confidence, while higher taxes on alternative assets are redirecting capital into equities. With earnings season ahead and technical indicators breaking new ground, we expect the bullish momentum to persist in the near term, supported by favorable macro trends and reallocation from fixed-income instruments.
Market Wrap: Bullish Momentum Carries KSE-100 Beyond 133,000 - By HMFS Research

Jul 7 2025


HMFS Research


  • The market continued its unrelenting bullish streak, surging past the 133,862 mark for the first time in history. This milestone rally was fueled by renewed investor confidence, driven by key trade developments and sector-specific momentum. Investor sentiment received a notable boost as Pakistan and the U.S. concluded a critical round of trade talks ahead of the July 9 deadline. While an official announcement is still awaited, early signs point to a favorable deal for Pakistan’s export sectors. Adding to the positive momentum, OGDC reported a production uplift following the successful installation of an ESP at Rajian-05, where it holds full ownership—further reinforcing its operational strength. The rally was led by the banking and fertilizer sectors, supported by expectations of strong upcoming results and favorable sectoral tailwinds. The KSE-100 index closed at 133,370 level, up 1,421 points in a robust session. Market activity remained upbeat, with 344 million shares traded on the KSE100 and total market volume reaching 915 million shares. Volume leaders included IMAGE (48mn), BOP (43mn), and WTL (37mn). While a short-term breather cannot be ruled out given the sharp upward trajectory, overall sentiment is expected to remain strong amid continued macroeconomic improvement. Investors are advised to stay focused on fundamentally sound stocks with long-term value.
Oil and Gas Development Company Ltd (OGDC): OGDC enhances production at Rajian-05 well - By AKD Research

Jul 7 2025


AKD Securities


  • Oil and Gas Development Company Ltd (OGDC) has enhanced production in Rajian-05 through installation of electrical submersible pumps (ESP). Following the workover, production has increased to 3.1kbpd of oil and 1.0mmcfd of gas, compared to 1.1k bpd/0.5mmcfd of oil/gas during 3QFY25. Notably, OGDC is the wholly-owned operator of the Rajian heavy oil field, where several workovers and artificial lift systems have been implemented at previous wells to expedite revival. We anticipate the aforementioned development to have an annualized EPS impact of ~PkR1.3 per sh for OGDC, respectively.
Pakistan Power: Base tariff cut and circular debt overhaul to reshape energy sector outlook - By AKD Research

Jul 7 2025


AKD Securities


  • The national base tariff is determined at PkR34.0/kwh for FY26, down by 4%YoY compared to PkR35.5/kwh in FY25.
  • GoP has accelerated its power sector reform agenda, with the PkR1.25tn commercial bank borrowing facility to reduce the mounting circular
  • Continued resolution of the circular debt would be beneficial for companies under our coverage space, namely: OGDC (Dec’25 TP: PkR371/sh), PPL (Dec’25 TP: PkR281/sh) and PSO (Dec’25 TP: PkR729/sh).
Autos: Marking FY25 as a year of recovery - By JS Research

Jul 7 2025


JS Global Capital


  • We preview automobile sales volumes for Jun-2025, expecting the three major players including Indus Motors Company Ltd (INDU), Honda Atlas Cars Ltd (HCAR), and Pak Suzuki Motor Company Ltd to post combined growth of 33%/9% YoY/MoM, reaching ~14.5k units – highest since Dec-2022.
  • All three companies are projected to post strong YoY volume growth, with HCAR leading peers with 65% YoY growth in Jun2025, followed by PSMC (+31% YoY), and INDU (+25% YoY), helped by pre-budget buying ahead of anticipated negative budgetary measures. Meanwhile, Sazgar Engineering Works Ltd (SAZEW) volumes also rose 55% YoY in Jun-2025.
  • For FY25 cumulatively, the auto sector witnessed a strong recovery, with volumes expected to grow by 37% to ~121k units, supported by improving macroeconomic stability and a rebound in consumer confidence amid stable car prices.
Morning News: In meeting with Pakistan’s COAS, Trump shows interest in long-term trade partnership - By WE Research

Jun 20 2025



  • During a cordial and extended meeting at the White House, U.S. President Donald J. Trump and Pakistan’s Chief of Army Staff, Field Marshal Syed Asim Munir, discussed expanding bilateral cooperation across various domains including trade, economic development, AI, energy, and counter-terrorism. Both sides emphasized strategic convergence and mutual interests, with President Trump expressing strong interest in a long-term trade partnership and praising Pakistan’s regional peace efforts. The leaders also addressed tensions between Iran and Israel, highlighting the need for conflict resolution. The meeting, which included high-level officials from both countries, reflected the warmth of ties and concluded with an invitation for President Trump to visit Pakistan.
  • Attock Refinery Limited (ARL) has signed an agreement with Italian engineering firm STP Studi Tecnologie Progetti for Front End Engineering Design (FEED) and Project Management Consultancy (PMC) as part of its refinery upgradation project, estimated to cost up to US$ 600 million. This major investment marks a significant milestone in ARL’s strategy to enhance value addition and environmentally friendly fuel production. The upgrade includes a Continuous Catalyst Regeneration (CCR) unit and the revamp of the Diesel Hydro Desulfurization Unit, following licensor FEED studies with UOP/Honeywell. The project aims to improve product quality, reduce environmental impact, and align ARL’s operations with international fuel standards.
  • The Special Investment Facilitation Council (SIFC) has approved a revenue-sharing agreement between Sui Southern Gas Company Limited (SSGC) and Jamshoro Joint Venture Limited (JJVL), allowing the JJVL LPG-NGL extraction plant to become operational by July 31. Under the agreement, revenue will be shared at a 66:34 ratio in favor of SSGC, which will also receive a 25% share of LPG based on Ogranotified producer prices, generating an estimated Rs2 billion annually. While both parties have initialed the deal, formal signing will follow the issuance of SIFC meeting minutes. SSGC sought SIFC’s endorsement to ensure transparency and avoid future scrutiny by NAB.
Morning News: $2.5bn surplus in trade with US: Aurangzeb - By WE Research

May 22 2025



  • Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, reported that Pakistan recorded a trade surplus of $2.5 billion with the United States during the current financial year 2024-25 (up to March), with exports at $4.4 billion and imports at $1.9 billion. In the previous year, 2023-24, exports were $5.3 billion and imports $2.2 billion, resulting in a $3.1 billion surplus. Key exports include garments and medical instruments, while major imports consist of cotton, steel scrap, computers, and petroleum products. The U.S. has imposed a 30% reciprocal tariff on Pakistani imports, currently suspended for 90 days, which exporters see as a challenge but also a potential opportunity due to higher tariffs on competitors. In response, the prime minister has formed a Steering Committee and a working group, with the Ministry of Commerce coordinating a comprehensive strategy to engage with U.S. authorities.
  • Gold prices in Pakistan rose significantly on Wednesday, with 24-karat gold reaching Rs349,400 per tola after an increase of Rs6,600, and 10 grams priced at Rs299,554, up Rs5,659, according to the AllPakistan Gems and Jewelers Sarafa Association. The price of 22-karat gold also increased to Rs274,601 per 10 grams. Silver prices followed suit, with 24-karat silver rising to Rs3,466 per tola and Rs2,971 per 10 grams. Internationally, spot gold traded near $3,302 an ounce, up 0.39%, marking its third consecutive daily gain, driven by a softer dollar and heightened safe-haven demand amid global economic and geopolitical uncertainties.
  • Pakistan’s per capita income rose by 9.75% to a record $1,824 in FY2024–25, up from $1,662 the previous year, with the economy’s total size reaching $410.96 billion—a 2.68% annual increase—according to provisional estimates by the Pakistan National Accounts Committee (NAC). In rupee terms, per capita income grew 8.27% to Rs509,174. This growth, driven mainly by a 3.99% rise in the services sector and a modest 1.18% increase in agriculture, helped Pakistan join the world’s 40 largest economies, despite a continued 1.14% contraction in the industrial sector. The NAC also revised earlier quarterly GDP growth estimates and finalized FY23 growth at -0.21% and FY24 at 2.51%. Analysts see the rebound as a sign of resilience amid global and domestic challenges, marking the highest GDP since FY18, when it last approached similar levels before facing economic and political instability.
Morning News: Key policy rate slashed by 100bps to 11pc - By WE Research

May 6 2025



  • The State Bank of Pakistan's Monetary Policy Committee (MPC) cut the key policy rate by 100 basis points to 11%, citing a sharp drop in inflation due to lower electricity tariffs and easing food prices, bringing the total rate cut since June 2024 to 11 percentage points. Inflation fell to 0.3% year-on-year in April, and core inflation also declined, while real GDP grew by 1.7% in Q2-FY25, driven by improved remittances, a current account surplus, and rising business confidence. Despite some weak industrial segments and agricultural output challenges, the MPC maintained its FY25 growth forecast at 2.5– 3.5% and projected further improvement in FY26, though risks remain from global uncertainty, supply -chain issues, and volatile commodity prices. Foreign exchange reserves are expected to rise to $14 billion by June 2025, and the fiscal deficit is likely to remain on target despite challenges in meeting the primary surplus goal, highlighting the need for sustained reforms in taxation and state-owned enterprises.
  • Efforts are underway to project Pakistan’s real GDP growth at around 3% for FY2024–25, despite low investment and savings rates and weak performance in key sectors. Concerns have been raised over the credibility of this target, especially with contractions in Large Scale Manufacturing (LSM), which declined 1.9% in Jul–Feb FY25, and a significant drop in major crop output, including cotton (down 33%) and maize. Although second-quarter growth was boosted—partly by historically high livestock estimates—reaching 3% would require a nearly 5% growth in the third quarter, which seems unlikely given current sectoral trends. Agriculture remains weak due to water shortages and low crop yields, while multilateral institutions project GDP growth between 2–2.6%. Despite this, internal government bodies, including the Ministry of Planning and Finance, appear eager to portray a higher growth trajectory ahead of the upcoming Economic Survey. The final provisional GDP estimate is expected by May 20, 2025, although independent experts argue growth may not exceed 2% based on the current data trajectory.
  • In April 2025, Pakistan’s overall Business Confidence Index (BCI) rose by 0.4 points to 56.9, according to the latest Business Confidence Survey conducted by the State Bank of Pakistan and IBA, driven by improvements in both the Industry and Services sectors. The Current Business Confidence Index (CBCI), reflecting perceptions over the past six months, climbed 0.9 points to 56, while the Expected Business Confidence Index (EBCI) remained stable at 57.8. The Purchasing Managers Index (PMI) also improved by 0.7 points to 53.5, signaling moderate expansion. Businesses’ inflation expectations rose slightly by 0.2 points to 64.2. Notably, the Expected Employment Index increased by 1.3 points to 55.3, with both industry and services sectors showing gains. Additionally, capacity utilization in the manufacturing sector edged up by 0.4% to 64.8%, indicating a slight uptick in production activity
Morning News: Pakistan’s real growth forecast stays unchanged: State Bank - By WE Research

Apr 29 2025



  • The State Bank of Pakistan (SBP) projects a more optimistic macroeconomic outlook for FY25, citing improving economic indicators, easing financial conditions, and stronger external balances, with real GDP growth expected between 2.5% and 3.5%. While positive trends like declining commodity prices, rising remittances, and improved exports support this view, risks remain, including global protectionist policies, geopolitical tensions, and potential inflation resurgence. Inflation is now projected lower at 5.5–7.5%, down from earlier estimates of 11.5–13.5%, aided by fiscal consolidation, stable energy prices, and food supply. However, fiscal risks such as potential tax revenue shortfalls and weak agricultural performance—particularly in wheat—could limit growth. The SBP’s report underscores that Pakistan’s outlook remains sensitive to external shocks, particularly in trade and global financial markets.
  • In the first half of FY25, Pakistan’s macroeconomic conditions improved notably, with headline inflation falling to a multi-decade low of 0.7% by March 2025, the current account turning surplus, and the fiscal deficit reaching its lowest level in 20 years, largely due to fiscal consolidation, tight monetary policy, and favorable global commodity trends. The State Bank of Pakistan (SBP) attributed these gains to a coordinated policy stance, IMF program support, and improved credit ratings. Despite easing inflation and a 1000 basis point cut in policy rate from June 2024 to February 2025, real GDP growth remained modest due to weak Kharif crop production and industrial contraction, though services showed relative strength. A rise in exports and remittances also helped bolster foreign reserves. However, the SBP warned of long-term challenges, emphasizing that weak productivity growth has undermined competitiveness and contributed to economic volatility, calling for structural reforms to enhance productivity and economic resilience.
  • In the first nine months of FY25, Pakistan’s salaried class paid a record Rs391 billion in income tax— nearly 10% of the country’s total income tax collection—highlighting a starkly disproportionate burden compared to other sectors like traders and retailers, who contributed far less. This represents a 56% increase from last year and already exceeds the government’s full-year target by Rs140 billion. Despite paying taxes on gross income without deductions and bearing the brunt of policy changes like reduced tax slabs and surcharges, their plight was not addressed in recent IMF negotiations. In contrast, retailers and wholesalers, many unregistered, paid a fraction of this amount, undermining the fairness of the tax system. With the IMF team set to review Pakistan’s budget in May, officials suggest high salaried-class collections might deter tax relief. Meanwhile, the Federal Board of Revenue (FBR) faces revenue shortfalls, attributing underperformance to slower economic growth and inflation, despite Rs1.3 trillion in new taxes introduced in the current budget.
Morning News: Trade gap with ME widens - By WE Research

Apr 15 2025



  • Pakistan’s trade deficit with the Middle East widened by 9.75% to $9.35 billion in the first eight months of FY25, mainly due to a surge in petroleum imports, particularly a 20.29% increase in crude oil volumes. While exports to the region rose modestly—by 3.56% to $2.095 billion—imports jumped 8.56% to $11.44 billion during the same period. Despite a narrowing of the trade gap in FY24 due to lower petroleum consumption, the deficit has grown again, raising concerns. Pakistan recently signed a free trade agreement with GCC states to address the imbalance, with notable export growth to the UAE, Saudi Arabia, and Qatar. Exports to Saudi Arabia rose 10.59% and to the UAE by 5.84% during July-February, while imports from both also fluctuated. However, exports to Bahrain, Kuwait, and Qatar declined significantly, while imports from these countries mostly increased, further contributing to the widening trade deficit.
  • In the upcoming 2025–26 federal budget, the Pakistani government is expected to raise taxes on a wide range of food and beverage items to increase tax revenue. Proposed measures include doubling the excise duty on soft drinks, sweetened beverages, and juices from 20% to 40%, while introducing a new 20% tax on industrial dairy products. Meat products, bakery goods, and confectionery items— such as chocolate, pastries, and cereals—are also likely to face a 50% tax increase, along with frozen desserts and products made from animal or vegetable fats. These tax hikes are planned to be implemented gradually over three years. Simultaneously, the defence budget is set to increase by Rs159 billion to Rs2,281 billion for FY26, marking a 7.49% rise from the previous year and a Rs263.2 billion increase since FY24, highlighting a continued focus on national security amid broader fiscal reforms.
  • Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, chaired a high-level meeting on priority sector lending aimed at aligning Pakistan’s financial sector with the government's export-led growth agenda. Attended by key officials from the State Bank, the Pakistan Banks Association, and leading banks, the session emphasized the banking sector's vital role in facilitating foreign direct investment and supporting export-oriented industries. The minister highlighted the successful Pakistan Minerals Summit and Maersk Line’s $2 billion investment in maritime infrastructure as indicators of investor confidence. He stressed the need for sustainable, investment-led economic growth, avoiding past boom-bust cycles. Notably, this year’s budget process was initiated early, incorporating stakeholder feedback from commerce chambers. Zafar Masud of the PBA presented updates on banking support for agriculture, SMEs, and digital sectors, including initiatives like electronic warehouse receipt finance and SME performance indices. The minister concluded with a call for coordinated efforts to develop fintech-driven credit solutions for smallholder farmers and to ensure long-term economic transformation rooted in stability, inclusivity, and resilience.
Morning News: IMF team due next week to discuss taxation proposals for next budget - By WE Research

Apr 11 2025



  • A technical team from the IMF is scheduled to visit Pakistan starting April 14, 2025, to engage in discussions with senior officials of the Federal Board of Revenue (FBR) regarding taxation proposals for the FY2025-26 budget. The talks will focus on expanding the tax base by bringing retailers and other untaxed sectors under the tax net, while the government is also considering reducing tax rates for the salaried class. Both parties are expected to explore the inclusion of high-income pensioners in the tax framework. Meanwhile, the IMF’s governance and anti-corruption diagnostic team will be concluding its visit. Additionally, a high-level Pakistani delegation, headed by Finance Minister Mohammad Aurangzeb, will attend the annual spring meetings of the IMF and World Bank in Washington, D.C., from April 21 to 26, 2025.
  • Prime Minister Shehbaz Sharif has halted a proposal to waive the 18% sales tax on local supplies of commodities, raw materials, and machinery to registered exporters under the Export Facilitation Scheme (EFS), due to concerns over potential objections from the IMF. The proposal, originally put forth by a committee led by Planning Minister Ahsan Iqbal, aimed to restore tax exemptions and reintroduce insurance guarantees to address anomalies that favor imports over local procurement—an issue impacting domestic industries like ginning factories. While some officials suggested revisiting the matter with the IMF, the Prime Minister rejected the idea, instead calling for a balanced solution that does not disadvantage local producers. The government is considering imposing the same 18% tax on imports to level the playing field. The PM emphasized boosting exports remains a top priority and urged the committee to incorporate industry feedback and develop consensus-based recommendations. The EFS, launched in 2021, has undergone stricter controls in recent months to curb misuse, including reduced utilization periods and enhanced monitoring.
  • Pakistan’s total liquid foreign exchange reserves increased by $173 million during the week ending April 4, 2025, reaching $15.75 billion, according to the State Bank of Pakistan (SBP). This rise includes a $23 million gain in SBP-held reserves, which stood at $10.699 billion, up from $10.676 billion the previous week. Additionally, net reserves held by commercial banks saw a notable increase of $150 million, reaching $5.053 billion compared to $4.903 billion the week before.
Fauji Cement Company Limited (FCCL): Poised for Continued Growth - Market Weight - By WE Research

Mar 18 2025



  • Since Jan’2024, the Pakistan cement sector has witnessed a swift recovery on the back of anticipated interest cut, where the industry stock performance increased by 46%. Among the local peers, FCCL has been the key driver on this rally, delivering an 92% return, with its share price surging from PKR 18.95/sh on January 1, 2024, to PKR 36.4/sh on January 1, 2025. However, despite this strong market performance, cement dispatches in CY24 remained stagnant/low, where local demand reached at 38.2 Mn tons, depicting a decline of 4.5% YoY. However, we expect FY25 to be a strong year for the industry, driven by lower interest rates and enhanced purchasing power across both consumer and industrial sectors, where we anticipated local dispatches to clock in at 38Mn tons 4% YoY increase from FY25.
  • We have a Market Weight stance on FCCL, with a DCF-based target price of PKR 64.40 per share for DEC’25 offering 40% upside potential. FCCL is currently valued at ~US$39.17EV/ton compared to 5-year average of ~US$32.65EV/ton. On EV/EBIDTA basis, stock is trading at ~11.07x as compared to 5-year average of ~6x.
  • Our liking for the stocks emanate from 1) Healthy gross margins driven by cost efficiency initiatives, 2) Recent capacity expansion to enhance market footprint, 3) Strong cash flow led to higher payouts & 4) Reducing interest rate to increase profitability.
Morning News: Economy seen growing at 3.4pc in FY25 – By WE Research

Jan 13 2025



  • Pakistan's economy is showing signs of recovery from the 2022-23 downturn, with a projected 3.4% GDP growth in FY25, according to the United Nations' latest economic survey. The IMF’s 37-month Extended Fund Facility (EFF) program, worth $7 billion, aims to address structural challenges, promote economic stability, and foster sustainable growth by focusing on reforms, policy credibility, competitiveness, state-owned enterprises, and climate resilience. Despite these efforts, risks such as geopolitical tensions, debt challenges, social unrest, and climate-related shocks, including extreme weather events, could hinder growth. The South Asian region is expected to see moderate GDP expansion, with inflation decreasing across most countries, including Pakistan, which has reduced key policy rates to support recovery. However, the region remains vulnerable to climate impacts, which have led to increased food prices and income inequality, particularly affecting rural households.
  • Pakistan saw a significant increase in workers' remittances, with $3.1 billion inflows in December 2024, reflecting a 29.3% year-on-year growth and a 5.6% month-on-month rise. Cumulatively, remittances reached $17.8 billion in the first half of FY25, up 32.8% from the previous year. Major sources included Saudi Arabia, the UAE, the UK, and the US. Analysts attribute the surge to efforts that narrowed the gap between black market and interbank exchange rates, a stable rupee, and the Pakistan Stock Exchange's strong performance. With ongoing government measures to regulate the remittance sector, including tighter controls on smuggling and improved documentation, remittance inflows are expected to exceed $35 billion by the end of FY25, a 35% increase from FY24. While improvements in dollar-rupee parity have bolstered this trend, experts caution against policies favoring export lobbies, arguing for broader currency stabilization measures.
  • Inflows through Pakistan's Roshan Digital Account (RDA) reached $203 million in December 2024, marking a 9% increase from November's $186 million, according to the State Bank of Pakistan (SBP). Of the December inflows, $13 million was repatriated, and $113 million was used locally, with a net repatriable liability of $76 million. The total number of RDA accounts grew to 778,713, up by 10,319 from the previous month. Cumulatively, RDA inflows reached $9.342 billion, with $1.7 billion repatriated and $5.911 billion utilized locally. The net outstanding liability was $1.73 billion as of Decemberend, with a significant portion in Naya Pakistan Certificates. Additionally, Roshan Equity Investments saw a 16% increase to $59 million. Launched in 2020, the RDA has become a crucial source of foreign exchange for Pakistan, offering competitive returns on dollar investments.