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ABL Asset Management's Q1 FY25 Report Highlights Strong Economic Adjustments and Improved Fiscal Stability
Karachi: ABL Asset Management Company Limited, managing ABL Income Fund (ABL-IF), presented its un-audited financial statements for the first quarter ending September 30, 2024, reflecting significant shifts in economic stability and operational strategies. The report includes economic performance reviews, mutual fund industry updates, and fund performance metrics, providing insights into the fiscal adjustments made in response to prevailing economic conditions.
The economic landscape in Pakistan showed marked improvements in the first quarter of FY25, underscored by a notable decline in inflation and strengthened foreign exchange reserves. The Consumer Price Index (CPI) decreased to 9.2% year-over-year, down from 29.0% recorded in the same period last year. Additionally, the State Bank of Pakistan (SBP) cut the policy rate by 300 basis points to 17.5%, aiming to curb inflation and stabilize consumer prices. According to information available from the Pakistan Stock Exchange (PSX), the country's foreign exchange reserves reached approximately USD 1.00 billion as of September 27, 2024, bolstered by a disbursement from the IMF’s USD 7.00 billion Extended Fund Facility (EFF), signifying a positive outlook for the national economy.
During this quarter, Pakistan recorded a current account deficit reduction of USD 171 million year-over-year, attributed to a rise in exports, which reached USD 6.10 billion. Worker remittances also rose by 44.96% year-over-year, reaching approximately USD 5.90 billion, supporting the country's economic outlook. The Federal Board of Revenue (FBR) reported tax collections of PKR 2,555 billion, showing a 25.0% increase, demonstrating the government’s commitment to fiscal discipline and effective tax management.
The mutual fund industry showed growth, with total assets under management (AUMs) increasing by 7.8% year-over-year to PKR 2,888 billion as of September 30, 2024. Conventional and Islamic funds contributed notably to this growth, with equity funds increasing by 27.6% and money market funds by 1.3%. The AUMs for ABL-IF closed at PKR 2,921.52 million by the end of the quarter.
The fund's performance during Q1 FY25 highlighted a 24.48% annualized return, exceeding the benchmark rate, primarily driven by exposures in Treasury Bills and Pakistan Investment Bonds (PIBs). As of September 30, 2024, the fund maintained a diversified portfolio with 26% exposure in TFCs and 8% in PIBs. The Pakistan Credit Rating Agency (PACRA) reaffirmed ABL-IF's 'A+' Fund Stability Rating on May 17, 2024, with a stable management quality outlook assigned on October 26, 2023.
With the IMF's EFF disbursement, coupled with supportive measures from the Asian Development Bank and the Islamic Development Bank, Pakistan anticipates macroeconomic stability. Looking ahead, ABL Asset Management will adjust its portfolio allocations in response to expected short-term rate increases and anticipates a continued focus on fiscal stability.