• The International Monetary Fund (IMF) announced that Pakistan will receive $1.3 billion under the Resilience and Sustainability Facility (RSF) in tranches over 28 months, subject to approval by the IMF's Executive Board. This follows a staff-level agreement reached on March 25, 2025, after the first review of Pakistan's 37-month Extended Fund Facility (EFF), which was approved in September 2024 for $7 billion. The RSF disbursements, which are spread over the duration of the arrangement, will be provided alongside a $1 billion disbursement from the EFF once the Executive Board approves the first review.

• Azerbaijan has offered over $1 billion in cash deposits to Pakistan to fund the construction of the $1.2 billion Sukkur-Hyderabad motorway, following a request from Prime Minister Shehbaz Sharif during his recent visit. The proposal includes two options: Azerbaijan’s State Oil Fund placing a term cash deposit with Pakistan’s State Bank, which would then lend the money to the National Highway Authority (NHA), or Azerbaijan, in collaboration with the Islamic Development Bank, directly funding the project. Pakistan has also sought financing for the Hyderabad-Karachi motorway (M-9), estimated to cost $600 million. Despite this offer, there is a lack of consensus among Pakistani government departments, with the Finance Ministry opposing the cash deposit route. The NHA is exploring options, including public-private partnerships, to move forward with the projects, but delays are expected due to limited fiscal space. This comes amid ongoing efforts to secure foreign investments and address Pakistan's infrastructure needs while grappling with political and economic instability.

• The federal government has announced a reduction in the price of petrol by Rs1 per litre, effective from March 29, lowering the price to Rs254.63 from Rs255.63. However, the price of High-Speed Diesel remains unchanged at Rs258.64 per litre. The price adjustments, recommended by the Oil and Gas Regulatory Authority (OGRA), were made based on fluctuations in international market rates, with the aim of providing relief to consumers.

• The International Monetary Fund (IMF) and Pakistan have reached a staff-level agreement (SLA) on the first review under the Extended Fund Facility (EFF) and a new climate finance arrangement under the Resilience and Sustainability Facility (RSF). The agreement, subject to approval by the IMF’s Executive Board, could unlock approximately $2.3 billion in funding for Pakistan by early May 2025. The deal focuses on fiscal discipline, energy sector reforms, climate resilience, and structural changes to foster economic growth. Despite challenges such as geopolitical shocks and global financial tightening, the IMF acknowledged progress in restoring macroeconomic stability in Pakistan. The Pakistani government has committed to advancing reforms to ensure long-term stability, with an emphasis on tax reforms, controlling inflation, and improving energy sector efficiency. Additionally, Pakistan is exploring new financial avenues, including potentially issuing Panda Bonds in Yuan to tap into China's capital market.

• The Reko Diq copper and gold project in Balochistan, with reserves valued at over $60 billion, has seen three state-owned energy companies—Oil and Gas Development Company Ltd (OGDCL), Pakistan Petroleum Ltd (PPL), and Government Holdings (Pvt) Ltd (GHPL)—more than double their funding commitments from $900 million to $1.88 billion. The project, which will be the world's first fully solarpowered copper-gold operation, is expected to yield 13.1 million tonnes of copper and 17.9 million ounces of gold over its 37-year life. The updated feasibility study also confirmed a 25% rate of return on investment. Phase 1 of the project, set to begin in 2028, will process 45 million tonnes of material annually, with Phase 2 doubling that by 2034. The project's funding will include a mix of shareholder equity and up to $3 billion in project financing. OGDCL, PPL, and GHPL, which hold a collective 25% stake in the project, have approved increased funding to reflect their proportional shares in the capital investment, with Barrick Gold Corporation holding the remaining 50% stake.

• Pakistan's economy grew by just 1.7% in the second quarter of the current fiscal year, with the livestock and services sectors driving growth due to lower inflation. However, the agriculture and industrial sectors faced significant challenges, including high interest rates, rising energy costs, and adverse weather conditions. Agriculture saw a sharp decline, with key crop production falling by 7.7%, while industrial output contracted by 0.2%, particularly in mining, large-scale manufacturing, and construction. The services sector performed best, growing by 2.6%, supported by a decline in inflation from 29% to 6.3%. Despite efforts to reduce electricity prices and offer fiscal stimulus, tight economic conditions, including record tax impositions and high interest rates, hindered broader economic progress. The government's target of 3.6% annual growth for FY2024-25 now seems unlikely to be met.

• Pakistan exported a record 933,000 tonnes of furnace oil in the first eight months of the current financial year, as the country's power sector phases out its use due to high costs and environmental concerns. Exports dropped to 39,000 tonnes in February but rebounded in March, driven by a government decision allowing refineries to sell surplus oil internationally. Furnace oil's role in power generation has diminished significantly, with little contribution to electricity production in February. Refineries are working to reduce high-sulphur furnace oil output, but delays in upgrades due to sales tax issues have hampered progress. Despite rising exports, refineries face challenges in disposing of furnace oil, affecting their operations.

• Prime Minister Shehbaz Sharif is set to reduce the power tariff by Rs8 per unit, effective from April 1, 2025, following approval from the IMF. The reduction includes a permanent Rs4.73 per unit cut due to agreements with independent power producers (IPPs), currency adjustments, and changes in government power plants’ returns. An additional Rs1.30 per unit relief will be provided temporarily due to the non-reduction of petroleum prices, amounting to an estimated Rs168 billion. The government is also working on further reducing the tariff by Rs2 per unit. However, the electricity duty will remain intact, as the Punjab government opposed its removal, and the IMF blocked a proposed reduction in GST from 18% to 12%. Additionally, the PTV fee will be removed from bills starting July 2025, with the government planning to allocate a separate budget for it in FY2026.

• The government’s renegotiation of agreements with Independent Power Producers (IPPs) has resulted in lifetime savings of Rs1.3 trillion, with the aim of passing these savings on to consumers. Previously, consumers were paying up to Rs2.8 trillion annually to IPPs, some of which received payments without producing electricity due to flawed agreements. The renegotiations have already led to a Rs7 per unit reduction in electricity tariffs. Over the past eight months, tariffs were reduced by Rs4.96, and agreements with 14 IPPs and eight bagasse-based IPPs secured savings of Rs1.33 trillion. Planned reforms include converting coal plants to Thar coal, improving efficiency in Distribution Companies (DISCOs), and promoting solarisation of tubewells in Balochistan. Additionally, IPPs have agreed to return Rs31 billion in excess profits, and various LPI claims have been waived as part of the agreements.

• 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.

• Chinese Ambassador to Pakistan Jiang Zaidong emphasized the importance of Pakistan and China working together as key partners in modernization, economic growth, and international stability during a seminar organized by the China Pakistan Study Centre. He highlighted the deep and enduring friendship between the two nations, China's economic resilience, and its investments in tech and green initiatives. Zaidong underscored Pakistan's crucial role in China's strategic initiatives, including the China-Pakistan Economic Corridor (CPEC) and space cooperation. He also outlined China's focus on poverty alleviation, job creation, and global peace. Other speakers, including Ambassador Sohail Mahmood and Masood Khan, discussed China's leadership in global development, the success of initiatives like the Belt and Road Initiative, and the evolving role of CPEC. They also highlighted the significance of media and think tanks in fostering understanding and the need for continued collaboration on regional security and global challenges.

• Oil & Gas Development Company Limited (OGDCL) has successfully restored hydrocarbon production at the Rajian-11 heavy oil well in Punjab’s Chakwal district after a four-year suspension. The company achieved this by installing an electrical submersible pump (ESP), in line with its strategy to boost production through advanced artificial lift techniques. Rajian-11, which reaches a depth of 3,774 meters, had been inactive since 2020 due to formation challenges. With the ESP installation, the well now produces 1,000 barrels per day (BPD) of oil. The Rajian Oil Field, discovered in 1994 and fully owned by OGDCL, is part of the company’s effort to maximize hydrocarbon recovery and improve operational efficiency. This development follows a 44% year-on-year decline in OGDCL’s profit for the quarter ending December 31, 2024, attributed to lower sales and higher taxes.

• K-Electric (KE) has requested a provisional negative adjustment of Rs 4.84 per unit in the Fuel Charges Adjustment (FCA) for January 2025, which would result in a financial impact of Rs 4.695 billion for consumers. Additionally, KE is seeking to adjust Rs 13.5 billion from previous months. The National Electric Power Regulatory Authority (NEPRA) will hold a public hearing on March 20, 2025, to review this request. KE's submission includes an adjustment for fuel cost variations, considering factors like partial load, open cycle, degradation curves, and startup costs for the period from July 2023 to January 2025. The hearing will deliberate on whether the FCA adjustment is justified, KE's adherence to the merit order in dispatching power, and the reasonableness of the accumulated fuel costs. KE's response highlights concerns over low demand in December 2024 and underutilization of its own plants, which led to higher costs. KE also emphasized the need to resolve interconnection issues with the National Transmission and Dispatch Company (NTDC) to improve cost-efficiency and system performance.

• Pakistan and Uzbekistan have agreed to boost bilateral trade from $400 million to $2 billion and explore opportunities in investment, connectivity, and tourism. During a two-day visit by Prime Minister Shehbaz Sharif to Uzbekistan, both leaders discussed the Trans-Afghan Railway project, which aims to connect Central Asia with South Asia and could transform regional trade. The leaders also emphasized the importance of regional stability, including a peaceful Afghanistan, and the need to prevent its soil from being used by militant groups. Prime Minister Sharif highlighted Pakistan’s economic progress and invited President Mirziyoyev to visit Pakistan, a proposal that was accepted. Both leaders agreed to establish a High-Level Strategic Council to further promote cooperation, especially in areas like energy, mines, and rail connectivity.

• Khyber Pakhtunkhwa Oil & Gas Company Limited (KPOGCL) signed an exploration agreement for the Miran Block in North Waziristan with a consortium including Oil & Gas Development Company (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings Private Limited (GHPL). KPOGCL will hold the majority stake with 51% ownership, while the remaining 49% will belong to the OGDCL-led consortium, which will also bear the investment of Rs 20 billion over the next three years. The project aims to explore significant oil and gas reserves, with strong prospects for addressing Pakistan’s energy crisis. Chief Minister Ali Amin Gandapur highlighted the project’s strategic importance, emphasizing its potential to bring development, create jobs, and reduce militancy in the region. He also criticized past policies for not fully exploiting KP’s natural resources and reaffirmed the province’s key role in Pakistan’s energy production.

• The government has decided to pass on the reduction in electricity prices due to fuel cost adjustments (FCA) to the agriculture sector and domestic consumers using up to 300 units per month. The Ministry of Energy has asked the National Electric Power Regulatory Authority (Nepra) to implement this decision, which aligns with past policy guidelines but adjusts for recent tariff rationalizations. The decision aims to provide relief to these consumers, reversing previous exclusions of agricultural and unprotected domestic consumers from negative FCA adjustments. Separately, K-Electric (KE) consumers will receive a tariff relief of Rs 4.95 per unit for December 2024 FCA, amounting to Rs 4.94 billion, which will be reflected in March 2025 bills. This marks the fourth consecutive negative FCA for KE customers since September 2024. The relief is attributed to factors like zero furnace oil use and increased power supply from CPPA-G. Various stakeholders, including consumer representatives, discussed the FCA's impact, with some requesting FCA adjustments in the summer months to offset higher electricity bills.

• An International Monetary Fund (IMF) mission recently visited Pakistan to assess governance and corruption vulnerabilities as part of the country's ongoing $7 billion Extended Fund Facility (EFF). The delegation, led by Joel Turkewitz, met with key government institutions, including the judiciary and financial regulators, to evaluate governance across six core areas, including fiscal management, central bank operations, and anti-money laundering measures. The IMF praised Pakistan’s commitment to the assessment and plans to return later this year for further evaluation. Additionally, Pakistan expects two more IMF missions in March to discuss additional financing of over $1 billion under the Resilience and Sustainability Trust (RSF) to address climate change vulnerabilities. The RSF funding, which offers long-term, low-cost repayment terms, was formally requested in October 2023.

• Pakistan and Turkiye are working to enhance bilateral trade and economic cooperation by leveraging agreements like the Preferential Trade Agreement (PTA) and Free Trade Agreement (FTA). During Turkish President Recep Tayyip Erdogan’s recent visit, the Pakistan-Turkiye High-Level Strategic Cooperation Council (HLSCC) emphasized expanding collaboration in trade, banking, energy, defense, and technology. Experts suggest addressing non-tariff barriers and anti-dumping laws while boosting exports in textiles, agriculture, and IT to achieve a $5 billion trade target. Pakistan’s exports to Turkiye in FY24 amounted to $335.3 million, while imports stood at $491.3 million. Concerns over brain drain have prompted calls for joint ventures in IT, defense, and advanced technology sectors, with Pakistanis contributing to key Turkish projects like fighter jets and drone manufacturing. Economic stakeholders advocate for greater industrial collaboration, direct trade routes, and enhanced private sector engagement to maximize trade potential.

• Finance Minister Muhammad Aurangzeb has announced plans to ease the financial burden on the salaried class in the upcoming budget, aiming to provide economic relief amid fiscal challenges. Speaking in Lahore, he highlighted positive economic indicators, including an increase in remittance senders and inflows through the Roshan Digital Account. Aurangzeb emphasized the private sector’s role in economic progress and reaffirmed government support for the construction industry while curbing speculative real estate activities. With inflation and high taxes weighing on the salaried class, the upcoming budget is expected to introduce measures balancing relief and fiscal stability.

• Indonesia plans to import 100,000 metric tons of water buffalo meat from Pakistan in 2025, as reported by the National Food Agency chief. The decision to purchase from Pakistan comes after finding lower prices compared to India, from which Indonesia imported water buffalo meat last year. Additionally, Indonesia aims to import 180,000 metric tons of beef and 100,000 metric tons of water buffalo meat in 2025, following a trade surplus of $3.45 billion in January despite weak imports.

• Hutchison Ports Pakistan has become the first in the country to integrate electric trucks (e-Trucks) into its port operations, advancing its commitment to sustainable logistics. With six e-Trucks now in service, the terminal is also using Electric Rubber-Tyred Gantry Cranes (ERTGCs) as part of its low-carbon strategy. This initiative supports Hutchison Ports’ global goal of achieving net-zero emissions by 2050, with plans to expand the fleet to 18 e-Trucks and introduce Pakistan’s first electric empty container handler by mid-2025. The Karachi Port Trust has praised the move, noting that it strengthens the port's dedication to sustainability, making Karachi the first port in Pakistan to adopt such green technology.

• Jetour, a sub-brand of the Chinese automaker Chery, is launching two new SUVs, the Jetour Dashing and the Jetour X70 Plus, on February 20, 2025. The Jetour brand symbolizes a commitment to fast and convenient travel. The Jetour Dashing is a 5-seater crossover SUV featuring a modern design with a multi-level slatted grille, LED headlights, and a spacious interior with a dual 10.25-inch infotainment system supporting Apple CarPlay and Android Auto. Powered by a 1.5TCI turbo engine with 154 horsepower and 230 Nm of torque, it offers a fuel economy of 12.8 km/liter and includes safety features like six airbags and a 360-degree camera. The Jetour X70 Plus, a 7-seater SUV, boasts a robust design with a large chrome grille, 19-inch alloy wheels, and a 25-inch touchscreen infotainment system. It shares the same engine and fuel economy as the Dashing, and includes luxury features like ambient lighting, leather upholstery, and advanced safety features, making it an excellent choice for families. Both models aim to make a significant impact on the Pakistani SUV market with their modern design, technology, and safety.

• The International Finance Corporation (IFC) plans to significantly increase equity investments and target large-scale infrastructure financing in Pakistan, potentially unlocking up to $2 billion annually over the next decade. IFC Managing Director Makhtar Diop emphasized the importance of this investment for Pakistan's development, particularly in sectors like airports, energy, water, and ports. Prime Minister Shehbaz Sharif supported this initiative and highlighted the World Bank Group’s newly launched $40 billion Country Partnership Framework, with $20 billion for sovereign lending and another $20 billion from IFC for private sector investments. Sharif encouraged further support from the IFC in key areas such as infrastructure, agriculture, IT, mining, climate resilience, and healthcare.

• Parliamentary Secretary for Finance Saad Waseem Sheikh stated that the government has no plans to impose new taxes to address the Rs386 billion shortfall in tax collection, focusing instead on meeting revenue targets for the current fiscal year. The Ministry of Finance provided an update on debt management, revealing that government debt as a percentage of GDP had decreased to 67.5% in June 2024, from 74.9% in June 2023. Strategies, including economic stabilization policies, primary surplus generation, and reduced interest rates, are expected to continue reducing debt. The ministry also highlighted progress in debt rollover, with $4 billion already rolled over in FY25, and anticipates saving Rs1 trillion in interest payments. The government is working on green sukuk and Panda Bonds for cheaper funding. Additionally, the first phase of the Seventh Agriculture Census was completed, and field operations for data collection are ongoing. Finally, the Commerce Ministry clarified that the EU has not banned rice imports from Pakistan but had intercepted shipments due to non-compliance with sanitary standards.

• The federal government has decided to partially pass on the benefits of lower international oil prices to consumers, announcing a price reduction of up to Rs 5.25 per litre, effective from February 16. The price of high-speed diesel (HSD) has decreased by Rs 4 per litre to Rs 263.95, while petrol dropped by Rs 1 to Rs 256.13 per litre. The Inland Freight Equalization Margin (IFEM) on petrol has been raised by Rs 1.42 per litre, from Rs 4.37 to Rs 5.79, and the ex-refinery price of petrol has been reduced from Rs 176.25 to Rs 173.83. Light diesel oil (LDO) prices have dropped by Rs 3.20 to Rs 171.65, and kerosene oil (KERO) is now priced Rs 5.25 lower at Rs 155.81 per litre. These adjustments follow recent fluctuations in the international oil market, where Brent prices fell by $2 per barrel, and the price of HSD decreased by $3 per barrel while petrol dropped by 90 cents per barrel.

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