Pakistan Oilfields Limited (POL): Staying the course - By Insight Research

Feb 24 2025


Insight Securities


  • Pakistan Oilfields Limited (POL) has consistently been one of the highest dividend-yielding script, maintaining an average payout ratio of 80% over the past five years. Its revenue is primarily driven by oil sales, insulating it from circular debt issues and enabling a strong dividend payout. In uncertain times, POL stands out among its peers due to visibility of its earning and dividend outlook. In a declining interest rate environment, where returns on fixed-income instruments have witnessed a steep decline, POL remains particularly attractive with its 11% dividend yield coupled with its upside potential, making it a compelling choice for passive investors.
  • The company is also working to sustain production levels and mitigate natural declines. It has increased production from the Jhandial field, rising from an FY24 average of 118bbl of oil and 1.4MMSCFD of gas to 814bbl of oil and 8.0MMSCFD of gas, respectively. However, with 65% of its oil production dependent on the TAL block, POL’s output remains closely tied to its joint venture partners. TAL block operator, MOL, is taking measures to arrest the decline in production, with Razgir coming online and drilling underway at Makori Deep-3.
  • We reiterate our ‘BUY’ stance on POL with reserves based Dec’25 target price of PKR709/sh, implying 35% potential upside. The company holds a strong cash position of PKR360/sh, reinforcing its ability to sustain high dividend payouts
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
Morning News: Pakistan to unveil Rs100bn EV policy today - By WE Research

Jun 19 2025



  • The federal government is set to unveil its National Electric Vehicle (NEV) Policy 2025-30, marking a significant move toward clean mobility, energy efficiency, and industrial self-reliance in Pakistan. The policy allocates over Rs100 billion in subsidies, introduces a levy on internal combustion engine (ICE) vehicles to fund the transition, and launches with Rs9 billion in FY2025-26 to support over 116,000 ebikes and 3,000 e-rickshaws through a digital platform, with 25% reserved for female riders. Aimed at achieving 30% EV sales by 2030, the policy seeks to cut 4.5 million tons of CO2 emissions, save $1 billion in annual fuel imports, and utilize the country’s electricity surplus. It also promotes domestic EV manufacturing, targeting 90% localization in two- and three-wheelers by 2026 through tariff protections.
  • The Senate Standing Committee on Finance, during its review of the Finance Bill 2025, recommended a zero-rated tax on incomes up to Rs1.2 million and rejected a proposed tax on individuals running small online businesses. While endorsing taxes on high-earning online academies and teachers, the committee opposed levies on exclusive clubs like the Islamabad Club, despite the FBR's argument that such clubs serve only a select elite. The FBR outlined plans to expand digital taxation to a wide range of online services, including streaming platforms, e-learning, telemedicine, and cloud services, but faced resistance on taxing small-scale digital entrepreneurs. Additionally, the committee debated restrictions on property purchases by tax non-filers, with a proposal to raise the allowable purchase limit from 130% to 500% of declared income. Finance Minister Muhammad Aurangzeb reaffirmed the government's intent to broaden the tax base by bringing non-filers into the net.
  • The government has introduced a bold National Tariff Policy aimed at reducing average import duties by 52% over five years to boost exports, reduce the trade deficit, and promote industrial modernization. Relying heavily on the World Bank's GTAP model, the policy projects exports will grow faster than imports, with a potential 7–9% revenue gain despite an estimated Rs500 billion static revenue loss. However, opposition lawmakers raised concerns about the policy's assumptions, lack of localized analysis, and potential impacts on inflation, reserves, and struggling domestic industries. Immediate tariff reductions have been proposed in the FY25 budget, including elimination of additional duties and lowering customs duties on thousands of tariff lines. While officials claim the reforms will drive export-led growth, enhance technology adoption, and increase employment, critics warn of economic disruption, particularly for inefficient industries, and called for greater transparency and scrutiny of the underlying models. A monitoring committee led by the finance minister will oversee implementation, with a new auto policy and further tariff rationalizations set to begin in July 2026
Economy: MPC maintains policy rate at 11% - By JS Research

Jun 17 2025


JS Global Capital


  • The State Bank of Pakistan (SBP) kept the policy rate unchanged at 11%, citing rising imports and tensions in the Middle East as key risks adding uncertainty to the commodity outlook and inflation. The MPC viewed this stance as necessary to maintain macroeconomic and price stability, especially as some FY26 budget proposals may further widen the trade deficit.
  • It should also be noted that core inflation declined marginally as per May-2025 numbers but remains elevated and any uptick in the food and energy prices may lead to rise in inflation going forward.
  • Supported by robust remittances and expected realization of planned inflows in coming weeks, SBP believes that reserves will clock in around US$14bn by Jun-2025. SBP Governor projects CA to also remain in surplus for FY25.
Pakistan Economy: Geo-political tensions to weigh on the economy - By Taurus Reseach

Jun 16 2025


Taurus Securities


  • Escalation reaches new highs as Iran and Israel continue to trade blows at each other. Earlier, Israel had conducted pre-emptive strikes on Iranian nuclear and military infrastructure along with killing the country’s top military leaders and nuclear scientists. Since then Iran has conducted multiple rounds of retaliatory missile strikes inside Israel. The latter have been reciprocated by the bombing of more targets in Iran by the Israeli air force.
  • The situation remains fluid as neither side seems to be willing to exercise restraint. Iran has also called-off negotiations with the US on its nuclear program. Further, Iran has also alleged the role of the US and its allies in the region in backing the Israeli attacks, invoking the possibility of striking US and its allies’ air bases and embassies in the region in case of further escalation. The latter may broaden the conflict, adversely affecting the world economy.
Economy: Jun’25 Monetary Policy Review - By Taurus Research

Jun 16 2025


Taurus Securities


  • State Bank of Pakistan’s Monetary Policy Committee (MPC) in its meeting today kept the benchmark policy rate unchanged at 11.00%, in line with expectations. The MPC highlighted the marginal decline in core inflation in May’25, with expectations of NCPI trending upwards going forward – albeit remaining within the SBP’s target range of 5%-7%. Wherein, recent budgetary measures are likely to have limited impact on inflation, although upside risks to this outlook remain very high.
  • Economic growth is picking-up gradually, likely to gain more traction next year with the impact of earlier rate cuts still unfolding. The MPC also noted potential risks to the external sector in the form of: i) widening trade deficit; and ii) weak financials inflows. Additionally, certain proposed FY26 budgetary measures are also likely to widen the trade deficit more.
  • Moreover, the MPC also pointed towards the recent sharp increase in oil prices as a result of the evolving geo-political situation in the Middle-East. Accordingly, the MPC has flagged Pakistan’s external outlook as susceptible to multiple risks like heightened geopolitical tensions, volatility in international oil prices, possible adverse impact of proposed budgetary measures, and potential shortfalls in planned financial inflows.
Economy: The MPC keeps the policy rate unchanged at 11% - By Pearl Research

Jun 16 2025


Pearl Securities


  • The State Bank of Pakistan’s Monetary Policy Committee (MPC) held its meeting today wherein the committee decided to maintain the policy rate unchanged at 11% due to emerging risks amid evolving global backdrop which may exert external pressure as well as erosion of offsetting base year effects in its inflation outlook.
  • At its meeting today, the MPC decided to maintain the policy rate at 11%, viewing this stance as appropriate in light of emerging external risks and to safeguard macroeconomic stability and anchor inflation expectations. The Committee observed that the uptick in headline inflation to 3.5% YoY in May 2025 aligned with earlier projections, as the favorable base effects on food prices gradually eroded. At the same time, core inflation recorded a slight moderation, and inflation expectations among households and businesses further softened.
  • Despite the more favorable inflation readings, the MPC highlighted the persistence of significant external risks that could undermine Pakistan’s macroeconomic stability. In particular, the Committee drew attention to heightened global economic uncertainty, driven by escalating trade protectionism and tariff measures, alongside volatile geopolitical conditions that continue to fuel instability. The MPC also highlighted that rising geopolitical tensions are contributing to increased volatility in international oil prices, thereby amplifying external vulnerabilities. Additionally, the potential adverse effects of proposed fiscal measures and the risk of shortfalls in planned external inflows were noted as factors that could further exacerbate inflationary pressures and undermine overall price stability.
Morning News: Pakistan set to hold policy rates - By Vector Research

Jun 16 2025


Vector Securities


  • Central bank is expected to hold its policy rate on Monday, a Reuters poll showed, as many analysts shifted their previous view of a cut in the wake of Israel’s military strike on Iran, citing inflation risks from rising global commodity prices.
  • Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial has said that the government has to obtain approval from International Monetary Fund (IMF) for every taxrelated proposal including any exemption, reduction in tax rates or any changes in tax regime.
  • In a major leap for Pakistan’s economy, the Reko Diq Copper Project is set to contribute nearly 1 percent to the country’s GDP annually, positioning it as one of the most significant industrial ventures in country’s history. “Backed by latest major financing package from the International Finance Corporation (IFC)- including a US$300 million direct loan and US$400 million in blended finance - the project marks IFC’s first mining investment in Pakistan and signals renewed global confidence in the country’s economic potential,” said Dr Tauqir Shah, top aide to the prime minister. A media report claimed that as a result of this approval, the private sector is expected to invest $2.5 billion in the Reko Diq project. Dr Shah has played a key role in this achievement.
Economy: MPC likely to keep the policy rate unchanged - By Alpha - Akseer Research

Jun 13 2025


Alpha Capital


  • The State Bank of Pakistan’s (SBP) Monetary Policy Committee (MPC) is scheduled to convene on June 16, 2025. We expect the MPC to take a cautious stance and maintain the policy rate at 11%. Given the cumulative 11 percentage points reduction over the past 12 months, the SBP may opt to pause its rate-cutting cycle in the upcoming meeting. Our expectation is underpinned by several key factors, including rebasing of energy prices due at fiscal year-end, rising geopolitical tensions in the Middle East, and potential pressure on the PKR. These factors may influence the SBP to take a cautious stance and defer the rate cut until more clarity emerges.
  • Inflation recorded a historic low of 0.3% YoY in Apr-25, before rebounding to 3.5% in May. Additionally, end-June inflation is expected to clock in at 4.0% due to seasonal food price pressures, heatwave-driven costs and Eid-related demand. We view this upcoming uptick as temporary.
  • In contrast, some key cost adjustments, including potential increases in gas and electricity tariffs, are expected to be announced before the start of the new fiscal year (FY26). The full inflationary impact of these adjustments will have to be assessed. Additionally, escalating tensions in the Middle East have pushed international crude oil prices to ~USD 75/barrel, raising concerns on domestic inflation and external accounts. Given this uncertainty, we believe the central bank will adopt a prudent approach, maintaining the current policy rate at 11%.
Pakistan Economy: Policy rate likely to remain ‘unchanged’ - By Taurus Research

Jun 13 2025


Taurus Securities


  • State Bank of Pakistan’s Monetary Policy Committee (MPC) is scheduled to meet on Monday June 16, 2025, wherein we expect the MPC to keep the benchmark policy rate ‘unchanged’ at 11%. Our expectations are primarily based on the following factors:
  • Geo-political developments: Recent escalation between Iran and Israel, as well as the war between Russia & Ukraine, continues to pose upside risks to commodity prices in particular oil. For context, oil prices are up ~9% following Israel’s attack on Iran. These pressures pose a significant risk to inflation expectations.
  • Core inflation remains elevated: Core inflation in Urban and Rural areas was recorded at 7.3% and ~9%, respectively in the latest NCPI reading for the month of May’25. We believe the MPC would like to see a more sustained decrease in the same.
Pakistan Economy: Monetary Policy Survey 56% of the participants expecting status quo; we also expect no change - By Topline Research

Jun 12 2025


Topline Securities


  • State Bank of Pakistan (SBP) is scheduled to hold its Monetary Policy Committee (MPC) meeting on May 05, 2025.
  • In a Poll conducted by Topline Securities, 56% of the market participant expect a status quo in upcoming monetary policy meeting compared to 31% in last poll. While 44% are expecting a rate cut of at-least 50bps.
  • Out of total 44% rate cut participants, 19% are expecting 50bps cut , and 25% are expecting 100bps cut.
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.
MARI Petroleum Company (MARI): Corporate Briefing Session - By Insight Research

Jun 30 2025


Insight Securities


  • MARI Petroleum Company (MARI PA) has conducted its corporate briefing to discuss financial results and future outlook of the company. We have highlighted key takeaways from the briefing.
  • During 9MFY25, MARI has posted net sales and PAT of PKR132.3bn and PKR46.3bn (EPS: PKR38.6), down by 7% and 10% YoY, respectively. The decrease in earnings is mainly attributable to lower production due to forced curtailment.
  • Company’s production clocked in at 29.32MMBOE in 9MFY25, down by 2% YoY.
Oil & Gas Marketing Companies: Energy chain Fixed charges hiked by 50% - By Insight Research

Jun 30 2025


Insight Securities


  • In a recent announcement, OGRA announced 50% hike in fixed charges for both protected and non-protected domestic consumers. Households consuming up to 1.5hm/month will now pay PKR1,500 up from PKR1,000, while higher consumption slabs will face fixed charges of PKR3,000 up from PKR2,000. Protected consumers will also see a rise in fixed charges, from PKR400 to PKR600 per month. Meanwhile, gas tariffs for the power sector have increased from PKR1,050/mmbtu to PKR1,225/mmbtu, and for general industry (process), rates have gone up ~7% to PKR2,300/mmbtu.
  • The energy sector has been on a cash flow recovery path over the past years, supported by policy reforms aimed at improving financial sustainability. A key driver has been the rationalization of tariffs, further aided by fixed monthly charges for residential consumers, which has helped Sui companies to reduce revenue shortfalls. Additionally, the inclusion of RLNG diversion costs in tariff structures has further eased cash flow constraints across the value chain. These reforms have translated into a sharp recovery in receivables for upstream players, with PPL and OGDC recording improved recovery rates of 88% and 90% in 9MFY25, up from 53% and 49% in the same period last year. However, this trend reversed slightly in the latest quarter, likely due to forced curtailments triggered by higher LNG imports. We believe the hike in fixed charges would negate the impact of higher LNG imports.
Economy: Jun’25 CPI likely to clock in at 3.2% - By Insight Research

Jun 30 2025


Insight Securities


  • Headline inflation is estimated at ~3.2% for Jun’25, compared to ~12.6% in SPLY and ~3.5% in preceding month. This will take FY25 average inflation to ~4.6% compared to 23.9% in FY24. On MoM basis, inflation is likely to inch up by ~0.2% MoM, mainly driven by ~0.4% housing index due to higher monthly FCA. On the flip side, food basket is expected to depict a decline of ~0.5% MoM, amid decline in prices of chicken price.
  • Within the SPI basket, items that recorded significant increase in prices during the period are as follows, Tomatoes (59.3↑%), Potatoes (26.4↑%), Eggs (7.4%↑), Fresh fruits (5.7%↑) & Onions (5.0%↑). On the flip side, prices of the following items eased off during the month, Chicken (32.5%↓), Fresh vegetables (12.2%↓), LPG (6.6%↓), Vegetable ghee (0.4%↓) & Cooking oil (0.4%↓).
  • The FY26 budget continues the fiscal consolidation path pursued over the past couple of years, under the guidance of the IMF. The budget is broadly noninflationary, with minimal changes to the taxation structure and no significant new taxes, except for some adjustments in petroleum related levies. Looking ahead, we expect inflation to remain within the SBP’s target range of 5%–7%. Based on our estimates, average inflation for FY26 is projected at around 5.4%, assuming no major shocks to the domestic supply chain or global commodity prices. However, the recently announced increase in fixed charges for domestic gas consumers is expected to be inflationary. With gas holding a weight of ~1.1% in the urban CPI basket, we estimate this hike will lead to a ~23% MoM increase in the gas index, translating into a ~0.85bps uptick in headline inflation. On interest rate front, we expect the SBP to maintain status quo, as the full transmission of 11ppts reduction in policy rate has yet to be reflected in real economy.
Fertilizer: Phosphatic fertilizer prices takes off -- By Insight Research

Jun 30 2025


Insight Securities


  • The global price of di -ammonium phosphate (DAP), the second most consumed fertilizer after urea, has increased by over 18 % since the beginning of 2025 , reaching US $720/ton . This rise is driven by several factors, including supply -side challenges due to China's export restrictions , higher energy costs, geopolitical tensions and strong demand particularly due to seasonal agricultural activity . The price spike was further accelerated by geopolitical event post Israeli attack on Iran's gas infrastructure, which also disrupted fertilizer markets .
  • Despite the sharp increase in DAP prices, the cost of key raw materials like phosphoric acid and phosphate rock has remained relatively stable . With gas prices fixed for local manufacturers, this expansion in margins significantly benefits DAP & NP producers, helping them to neutralize some of the impact of lower urea volumes caused by unfavorable agronomic conditions . Historically, we have seen that NP prices have a strong correlation with DAP . Given that, companies engaged in DAP & NP production are more favorably positioned in the current environment . We highlight FFC and FATIMA are well positioned to play this pricing trend.
  • The DAP market has experienced a significant price rally in recent months, with prices surging by ~18 % since the beginning of the year, reaching US $720/ton in Jun’25 . This increase has been driven by a combination of factors, including supply shortages, geopolitical tensions, rising energy costs, and stronger demand from regional markets .
Pakistan Textile: After the hit, a hint of relief - By Insight Research

Jun 25 2025


Insight Securities


  • Despite facing challenging times, Pakistan’s textile sector remained resilient with value added sector depicting healthy volumetric growth and overall sector contributing ~56% to total exports in 11MFY25. However, listed players has underperformed the index as operating environment was not very conducive for the sector, mainly due to elevated energy costs, shift to the normal tax regime and policy lapses for local industries. Additionally, subdued demand from the European market kept prices under pressure and local cotton production has fallen significantly by ~34% compared to SPLY, forcing the industry to rely more on imported cotton, which ultimately hurt the spinning sector.
  • Despite ongoing challenges, we believe most textile stocks are trading at a discount and offers attractive valuations compared to historical multiples. Recent developments such as sharp interest rate cuts, reduction in electricity tariffs coupled with the potential shift in global trade amid US tariffs, may induce a gradual recovery for textile sector. Within our coverage, ILP and NML remain our top picks.
  • Pakistan, which directs ~17%–18% of its total exports and ~25% of its textile exports to the U.S. market, remains relatively well-positioned compared to regional peers under the current U.S. tariff structure. For reference, Pakistan’s tariff rate stands at (29%), while competing countries face higher effective tariffs rates, including China (145%), Bangladesh (37%), Vietnam (46%), and Sri Lanka (44%).
Pakistan Economy: MPC statement & analyst briefing takeaways - By Insight Research

Jun 16 2025


Insight Securities


  • In today’s MPC meeting, SBP has kept policy rate unchanged at 11%, inline with market expectations. The committee noted that inflation recorded an uptick to clock in at ~3.5% in May’25, as expected and is likely to inch up in coming months and stabilize in target range during FY26. The impact of policy rate cut is kicking in as reflected in improved economic activity. The committee highlighted that trade deficit and shortfalls in planned inflows posses risk to external account. The MPC further elaborated that some of the actions announced in budget might have negative impact on trade balance.
  • Key developments highlighted by the MPC includes provisional GDP growth of 2.7% for FY25 and ambitious growth target of 4.2% for FY26, successful disbursement of US$1bn from IMF after completion of first review of EFF program, revised estimate of primary deficit at 2.2% of GDP and some decline in agriculture output compared to initial estimates.
  • Overall, MPC believes the current real policy rate is sufficiently positive to keep inflation within the target range of 5%–7%. However, timely receipt of planned inflows, achieving targeted fiscal consolidation and implementation of structural reforms are crucial for maintaining macroeconomic stability and ensuring sustainable economic growth. Moreover, fluid geopolitical situation and its impact on oil prices will remain a key variable for Pakistan.
Pakistan State Oil Company Limited (PSO): Analyst briefing takeaways - By Insight Research

Jun 13 2025


Insight Securities


  • PSO has conducted its corporate briefing to discuss financial results and outlook of the company. We have highlighted key takeaways from the briefing
  • Regarding power circular debt resolution, management highlighted that there is no clarity on the amount PSO will receive post this settlement.
  • On market share, the company mentioned that it declined due to rising competition and discount offered by competitors. Management expect 3%- 5% growth in retail fuel offtake in FY26.

Pakistan Economy: OPEC’s aggressive output hike puts Pakistan in a sweet spot - By Insight Research

May 26 2025


Insight Securities


  • OPEC+ is expected to announce another output hike of 411 k bbl/day starting July, according to multiple news reports . During the group’s upcoming meeting on June 1st, members are likely to approve a production increase that is three times larger than the previously planned hike of 137 k bbl/day . If materialized, this move could add pressure to already struggling international crude oil prices, which have been weighed down by a weak global economic outlook.
  • Sources close to the group indicate that larger -than -expected output hike may be part of a broader strategy to bring as much as 2 . 2mn bbl/day back into the market by Nov’25 . The decision is widely seen as an effort, particularly by Saudi Arabia to regain lost market share and push high cost producers out of the market . Notably, Saudi Arabia’s market share has been on a declining trend since 2022 , following OPEC+ production cuts that reduced the cartel’s overall share in global oil supply . KSA’s market share declined even faster than the group’s average . The current strategy also appears to target non -compliant OPEC+ members, with Saudi Arabia leveraging its cost advantage to reclaim share from both shale producers and cartel members who are not adhering to quotas . Additionally, experts suggest a geopolitical angle to the move, particularly in the context of U . S . -Saudi relations . The Trump administration is reportedly keen on lower oil prices to curb inflation and restore market confidence especially due to tariff-induced uncertainty . On the other hand, Saudi Arabia is seeking deeper defense cooperation and has recently announced plans to invest US $600bn in US .
  • We believe that Saudi Arabia aims to capture market share from high -cost producers while maintaining some degree of control on prices through monthly OPEC+ meetings, as highlighted in group’s recent press releases . A sharp price decline would not be in KSA’s interest, especially considering its ambitious development plan .
Oil Marketing Companies: OGRA approves ERR for sui companies - By Insight Research

May 21 2025


Insight Securities


  • In a recent development, OGRA has decided a 6.6% increase in gas prices for SNGPL, while reducing SSGCL prices by 5.9%, effective from July’25. OGRA has submitted its decision to the federal government for the issuance of a formal notification outlining category wise consumer gas prices. As per legal requirements, the federal government is expected to finalize the category-wise pricing within 40 days. We believe that the impact of consumers will be marginal due to minimal hike in overall prices. However, RLNG diversion volume remains a key component to look for.
  • OGRA approves meager increase for SNGPL; price set at PKR1,895.2/MMBTU The OGRA has issued its decision on SNGPL petition, where OGRA approved a tariff increase of PKR116.9/MMBTU, setting the prescribed price at PKR1,895.2/MMBTU, which represents a 6.6% increase from the current rate against SNGPL's request for an increase of PKR707/MMBTU. This revised revenue requirement stems from a PKR62.2bn downward adjustment in operating expenses, wherein major deviations stems from adjustment in cost of gas and the disallowance of PKR95.9bn on account of late payment surcharge. Notably, OGRA based its calculations on different oil price and exchange rate assumptions of PKR75.3/bbl for crude and PKR280/US$. SNGPL, in contrast, assumed PKR77/bbl, and PKR287.5/US$, respectively. Furthermore, OGRA revised the RLNG volume downwards to 75,556 MMCF, compared to SNGPL's projected 88,185 MMCF. This adjustment is due to confirmation from PLL that arrangements have been made with ENI to divert cargoes outside Pakistan from Jul’25 to Dec’25. Additionally, while SNGPL had requested PKR317.7/MMBTU for RLNG cost of services for the year, OGRA approved PKR210/MMBTU. This adjustment assumes a reduced RLNG input volume of 325,677 MMBTU, against SNGPL's projected 343,960 MMBTU, amid aforementioned diversion.
  • OGRA has finalized its decision on SSGCL’s petition for FY2025–26, against SSGCL's proposed hike of PKR2,399/MMBTU to bridge a revenue shortfall of PKR888.6bn (including PKR498.7bn from prior years), OGRA has instead recommended a reduction of PKR103.95/MMBTU. This brings the prescribed price down to PKR1,658.56/MMBTU, a 5.9% decrease. OGRA has revised SSGCL’s net revenue requirement down to PKR319.9bn with only PKR34.2bn allowed as prior year adjustment. Major downward revisions include PKR62.2bn in operating expenses. OGRA’s estimates factor in PKR75/bbl for oil and PKR280/US$, contrasting with SSGCL’s assumptions of PKR72.5/bbl and PKR292.
Economy: Ceasefire Ignites Investor Confidence in PSX - By Insight Research

May 12 2025


Insight Securities


  • The Pakistan Stock Exchange (PSX) experienced a market-wide trading halt today as the KSE-100 Index skyrocketed by 9,475 points (+8.84%) to close at 116,650.12, triggering the index-based halt mechanism on the upside. The rally was driven by a powerful combination of regional peace prospects, fresh IMF disbursements, and improving global trade sentiment following the resolution of the U.S.-China tariff standoff.
  • The Directors General of Military Operations (DGMOs) of both nations met today at 12:00 PM to formalize and reinforce the recently agreed ceasefire.
  • The diplomatic engagement is being seen as a major de-escalation step, improving regional security outlook and investor sentiment.
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