Insurance: Listed Non-Life Insurance profits up 35% in 2024 to Rs17.4bn - By Topline Research

Apr 7 2025

Topline Securities

• Pakistan's listed Non-Life (General) Insurance companies reported profits of Rs17.4bn in 2024 which is up by 35% YoY compared to 2023 and better than last 5-year CAGR of 19%.

• Higher profits are led by better underwriting results, and higher Investment Income.

• In 2024 Net Premiums increased by 25% YoY to reach Rs68.6bn compared to 2023. Net premiums have increased due to growth in all major segments including Fire & Property, Motor, Marine.

Economy: Trade Tensions Trigger a Global Sell-Off - By AHCML Research

Apr 7 2025

Al Habib Capital Markets

• Global stock markets tumbled after a surprise move by U.S. President Donald Trump, who announced new tariffs on imports, sparking fresh fears of a trade war. Countries like China responded with their own import duties, intensifying global tensions. Investors are now worried that escalating trade barriers could hurt global growth, profits, and jobs. Stock markets across Asia, Europe, and U.S. futures have all dropped sharply, as fear and uncertainty take the lead over company fundamentals. Markets are now in a wait-and-see mode, hoping for signs of de-escalation from world leaders.

• The Pakistan Stock Exchange (PSX) has recently faced significant volatility, primarily influenced by escalating global trade tensions and domestic economic factors. The benchmark KSE-100 Index plummeted over 5%, triggering a temporary halt in trading. This sharp decline was largely a reaction to the U.S. government's implementation of new tariffs on imports, which unsettled global markets and prompted widespread investor concern.

• The imposition of these tariffs has raised fears of a global trade war, adversely affecting investor sentiment worldwide. Pakistan, facing a steep 29% tariff on its exports to the U.S., is particularly vulnerable. In response, the Pakistani government announced plans to send a delegation to Washington to negotiate relief from these tariffs.

Sazgar Engineering Works Limited (SAZEW): Revving up for the new era - By Foundation Research

Apr 7 2025

Foundation Securities

• In a rapidly evolving automotive landscape, SAZEW’s entry into Pakistan’s 4-wheeler market capitalizing on the surging demand for SUVs, marked a pivotal moment. At the heart of this transformation stood the company’s resolve at redefining the industry with its sustainable forward-thinking approach - leveraging Greenfield incentives and expanding into the electric and hybrid segments. With the expected resurgence in the Auto sector, our positive view is underpinned by the company’s (1) brand equity of “HAVAL” in the 4-wheeler market, (2) robust gross margins to upkeep bottom-line, (3) efforts to penetrate further into the EV and HEV segment solidifying its green foot prints and (4) growth in iconic “SAZGAR” 3-wheelers along with broad products offerings - diversifying operational risks. In the light of the above, we initiate coverage on SAZEW with an ‘Outperform’ rating and a Dec’25 TP of PKR 1,504/sh, implying a 38% upside.

• HAVAL's success story: HAVAL made its entry into the Pakistani market at a very opportune time. Where the SUV segment was slowly growing post the launch of KIA Sportage, MG-HS and Hyundai Tucson to name a few, HAVAL made a solid entry with the launch of Pakistan’s first locally assembled HEV. Consequently, the company has sold over 14k units in just 30 months. In 8MFY25, sales have exceeded 7k units and given the momentum, we opine reaching 12k mark in FY25 would not be a challenging feat. Plus, the collaboration with HIT to convert HAVAL H6 into a security vehicle and the recent MOU signed with Armed forces suggest robust volumetric growth going forward.

• Elevated margins to stabilize but still remain higher than peers: SAZEW benefits greatly from its Greenfield status and AIDEP (2021-26) policy providing CD and ST concessions, which have resulted in stellar ~29% gross margins over the past 4 quarters compared to only ~10% when 3-wheelers was its main operating segment. Upwelling margins are expected to remain intact till FY26 when concessions end, whereby, we see them settling at ~16.5% in the longer term.

Technical Outlook: KSE-100; Post breakout consolidation - By JS Research

Apr 7 2025

JS Global Capital

• The KSE-100 index, after making a high of 120,797, slid to close at the 118,792 level, down 146 points DoD. Volumes stood high at 554mn shares, compared to 423mn shares traded previously. A short-term consolidation is likely, as we believe the nearest support lies between the 118,070 and 118,330 levels. A fall below this range may start a corrective trend with 117,757 and 116,931 in sight. However, the resistance lies in the range of 119,430-120,150 levels, followed by 122,299. We recommend investors remain cautious at higher levels and wait for dips. The support and resistance levels are at 118,074 and 120,153, respectively.

Morning News: Pakistan sees 2nd IMF anti-graft visit - By Vector Research

Apr 7 2025

Vector Securities

• The International Monetary Fund (IMF) has sent a second Corruption and Governance Diagnostic Mission to Pakistan a few months apart to hold in-depth engagements with over 30 departments and institutions, including the registrars of the Supreme Court of Pakistan (SCP) and the accountability court. The mission, which began its interactions on Thursday, will stay in the country until April 14, according to Pakistani authorities.

• A US delegation, led by Eric Meyer, the senior official overseeing the Bureau of South and Central Asian Affairs at the State Department, will visit Islamabad from April 8-10, 2025. The visit aims to promote US interests in the critical minerals sector at the Pakistan Minerals Investment Forum (PMIF25), organised by the Oil and Gas Development Company Limited (OGDCL) in collaboration with the Government of Pakistan.

• Finance Minister Muhammad Aurangzeb has stated that there has been a significant reduction in interest rates and, in his opinion, there is room for further reduction. In a press conference held in Islamabad, he said that economic stability had been achieved in the country, which is crucial for economic development. 

Market Wrap: Highlights of the day April 4, 2025 - By JS Research

Apr 4 2025

JS Global Capital

• The KSE-100 Index surged by 1.6%, crossing the historic 120,000-point milestone during intraday trading, driven by investor optimism following a 18% electricity tariff cut and easing inflation. However, it closed at 118,791, down 146 points, as global trade tensions and tariff disputes weighed on sentiment. Banking sector shares saw increased buying interest, while oil and gas stocks faced selling pressure. Looking ahead, market performance will depend on global economic stability and domestic policy measures to sustain investor confidence.

Fertilizer: Urea Sales Almost 5 Years Low - By Sherman Research

Apr 4 2025

Sherman Securities

• According to provisional data, urea sales during Mar’25 is expected to clock in at 308k tons, down 54%YoY. Similarly, DAP sales to decline by 61%YoY. The YoY decline is mainly due to weak farm economics amid lower support prices and higher input costs.

• Similarly, on MoM basis, urea sales is likely to decline by 11%MoM, mainly due to seasonal impact.

• Urea sales of Fauji Group to clock in at 187k tons versus sales of 252k tons during the same period last year, down 26%YoY. Similarly, EFERT is likely to witness sharp decline in urea sales of 60%YoY to 59k tons as compared to 148k tons during the last year.

Pakistan Economy: Power tariff got slashed - By Insight Research

Apr 4 2025

Insight Securities

• In a recent development, Prime Minister has announced a reduction in electricity tariffs by PKR7.41/unit for residential consumers and PKR7.59/unit for industrial users. This long-awaited relief had been widely anticipated in recent months, as rising administered energy prices were significantly eroding consumer purchasing power and were negatively impacting the overall economic activity. According to government sources, the IMF has endorsed this plan.

• To address the issue, the government initiated measures such as revising/terminating contracts with IPPs and increasing the rate of PDL on petroleum products by PKR10/ltr last month, to finance tariff differential subsidy.

• The primary contributors to the PKR7/unit tariff reduction includes termination of Power Purchase Agreements with certain IPPs along with renegotiation regarding hybrid take and pay model with others. Furthermore, the government plans to utilize the incremental revenue from the recent PKR10/ltr hike in PDL to fund Tariff Differential Subsidy. Moreover, Quarterly Tariff Adjustment of ~PKR1.9/unit, effective from Apr’25, along with expected fuel cost adjustments, will further support the government in implementing the announced relief of ~PKR7/unit.

Fertilizer: Pakistan’s Urea sales for Mar-2025 is expected to clock in at 308K tons, down 54% YoY - By Topline Research

Apr 4 2025

Topline Securities

• Pakistan Urea sales in Mar-2025 is expected to clock in at 308k tons, down 54% YoY compared to 671k tons in Mar-2024.

• Similarly, Urea sales is expected to decline by 11% MoM. This will take 1Q2025 offtake to 1.1mn tons, down 40% YoY compared to 1.8mn tons in 1Q2024.

• This is likely to take closing inventory of Urea to be around 837k tons in Mar-2025, up from 536k tons in Feb-2025.

Pakistan Economy: Mar-2025 CPI clocks in at 0.7%, a six-decade low - By JS Research

Apr 4 2025

JS Global Capital

• CPI for Mar-2025 clocked in at 0.7%, lowest since 1965. The main contributor to this was the significant decrease in food inflation, which declined 5.1% YoY in Mar-2025.

• Our average CPI forecast for FY25E is ~5.3%, including a rebound expected in May and June figures. We expect Prime Minister's recent announcement of an ~18% reduction in electricity prices to provide additional support in lowering overall inflation. 

• The SBP did not cut interest rates in the last MPC meeting but based on the lower-than-expected inflation readings thus far, we may see a cut in rates going forward. At present, the real interest rate (RIR) hovers around ~11.3pp.