Karachi: The Board of Directors of NBP Fund Management Limited has released the unaudited condensed interim financial statements for the NBP Islamic Stock Fund (NISF) for the quarter ending September 30, 2026. The report, dated November 3, 2026, outlines a challenging period for the fund, marked by a decrease in performance relative to its benchmark, the KMI-30 Index.
During the first quarter of fiscal year 2027, the KMI-30 Index experienced a big move with a decline of 5.3%, closing at 243,609 points, down from 13,719 points. The market was influenced by escalating tensions between the United States and Iran, coupled with a sharp rise in global oil prices, raising concerns over inflation and external account pressures. Specifically, the Index dropped significantly by 3.2% in September.
Despite the inflationary pressures, other macroeconomic indicators suggested an improving trend. The State Bank of Pakistan's (SBP) foreign exchange reserves reached a record USD 21.4 billion in September, exceeding the USD 21 billion target set for the end of June 2027. This was supported by Pakistan's substantial Eurobond issuance, which raised USD 3 billion. Additionally, the current account deficit narrowed by 16% year-on-year to USD 874 million, fueled by a 14% increase in workers' remittances totaling USD 10.9 billion.
According to information available from the Pakistan Stock Exchange (PSX), the NBP Islamic Stock Fund witnessed a 14.5% reduction in its size, decreasing from Rs. 14,769 million to Rs. 12,633 million during the quarter. The unit price of the fund also fell by 6.5%, from Rs. 25.9903 on June 30, 2026, to Rs. 24.2912 on September 30, 2026. In comparison, the benchmark KMI-30 Index experienced a big move with a 5.3% drop during the same period, indicating the fund underperformed its benchmark by 1.2%.
Since its inception, however, the NISF has shown significant growth, with the NAV increasing by 390.0%, compared to the benchmark's 364.5% increase, resulting in a 25.5% outperformance. Despite this historical success, the fund reported a total loss of Rs. 839.22 million for the quarter, with net losses reaching Rs. 980.21 million after expenses of Rs. 140.99 million.
Sector-wise, the Commercial Banks, Fertilizer, Food & Personal Care Products, Insurance, Investment Banks/Companies, Oil & Gas Exploration, Refinery, Sugar & Allied Industries, Tobacco, and Transport sectors outperformed the market. Conversely, sectors such as Auto Parts & Accessories, Cable & Electrical Goods, and Cement lagged.
Looking ahead, the market's direction is expected to hinge on developments in the Middle East and global oil prices. However, with record foreign exchange reserves, strong remittance flows, and continued engagement with the International Monetary Fund (IMF), the macroeconomic outlook remains supported. The announcement of a Staff-Level Agreement with the IMF on October 7, 2026, is anticipated to unlock approximately USD 1.2 billion, bolstering external buffers and investor confidence.