Karachi: The Board of Directors of NBP Fund Management Limited has released its twelfth annual report for the NBP Islamic Stock Fund (NISF), highlighting the fund's performance for the fiscal year ending June 30, 2026. The report, dated October 1, 2026, details a period marked by robust market activity, geopolitical tensions, and economic shifts.
The equity market demonstrated a strong performance in FY26, with the KMI-30 Index posting a substantial 39.2% increase. This follows previous gains of 46% in FY25 and 79% in FY24, culminating in a cumulative three-year return of 264%. Despite heightened volatility in the latter part of the year—due to escalating US-Iran tensions and consequent disruptions in the Strait of Hormuz—the market showed resilience, buoyed by macroeconomic stabilization, progress under the IMF program, and growing investor confidence.
Economic indicators pointed to recovery, with real GDP growth reaching 3.7%, the highest in four years, up from 3.2% in FY25. However, inflation surged to an average of 7.1%, up from 4.6% the previous year, driven by a low base effect and rising international energy prices. In response, the central bank increased the policy rate by 100 basis points to 11.5% in April 2026 to manage inflationary pressures.
The country's external position remained stable despite significant external debt repayments and increased global oil prices. The current account recorded a modest deficit of USD 139 million in FY26, contrasting with a USD 1.8 billion surplus in FY25. This was largely mitigated by record workers' remittances amounting to USD 41.6 billion and additional inflows from Saudi deposits, Eurobond proceeds, and the country's first Panda Bond. The central bank's purchase of USD 6.5 billion from the foreign exchange market ensured foreign exchange reserves exceeded the June 2026 target of USD 18.0 billion.
Sector-wise, the Automobile Parts & Accessories, Commercial Banks, Fertilizer, Investment Banks/Companies, Leather & Tanneries, Power Generation & Distribution, Technology & Communication, and Transport sectors outperformed. In contrast, sectors such as Auto Assemblers, Cable & Electrical Goods, Cement, Chemical, and others lagged behind.
Investor activity showed Companies, Mutual Funds, and Individuals as the largest net buyers, with inflows of USD 585 million, USD 401 million, and USD 328 million, respectively. Conversely, Insurance companies and Banks/DFIs reduced their net holdings by USD 241 million and USD 172 million, respectively.
According to information available from the Pakistan Stock Exchange (PSX), during the fiscal year, the NBP Islamic Stock Fund (NISF) increased by 37.2%, underperforming the KMI-30 index by 2.0%. However, since its inception, the fund has outperformed the benchmark with a return of 424.3% compared to the KMI-30 index's 390.7%, a difference of 33.6%. The fund size stood at Rs 14,769 million as of June 30, 2026.
The NBP Islamic Stock Fund reported a total income of Rs 3,531.74 million for the year, with net income totaling Rs 3,079.81 million after deducting expenses of Rs 451.93 million. The unit price increased from Rs 18.9500 on June 30, 2025, to Rs 25.9903 on June 30, 2026, resulting in a per unit income of Rs 7.0403, reflecting a 37.2% increase.
Looking ahead, the outlook for FY27 remains positive, though geopolitical developments and global economic conditions may influence near-term volatility. Improving macroeconomic stability, stronger external buffers, continued fiscal discipline, and expectations of easing interest rates are expected to support equities moving forward.