Karachi: The Board of Directors of NBP Fund Management Limited has released the unaudited condensed interim financial statements for the NBP Stock Fund (NSF) for the quarter ending September 30, 2026. The report, dated November 3, 2026, reveals that the fund has experienced a notable decrease in its asset size amidst challenging market conditions.
During the first quarter of the fiscal year 2027, the KSE-100 Index saw a decline of 5.7%, shedding 10,332 points to close at 169,969 points. The market sentiment was adversely affected by the escalating tensions between the United States and Iran, coupled with a sharp rise in global oil prices, which raised concerns over inflation, the external account, and interest rate outlook. The Index alone fell by 4.0% in September.
Despite the inflationary pressures, most macroeconomic indicators showed improvement. The State Bank of Pakistan's foreign exchange reserves rose to a record USD 21.4 billion in September, surpassing the end-June 2027 target of USD 21 billion. This increase was supported by Pakistan's largest-ever USD 3 billion Eurobond issuance. The current account deficit narrowed by 16% year-on-year to USD 874 million in the first quarter of FY27, as workers' remittances increased by 14% to USD 10.9 billion. Moody's upgraded Pakistan's sovereign rating to B3 from Caa1 in August, following S&P's upgrade to B in July. The SBP forecasts real GDP growth of 3.5%-4.5% for FY27, driven by better agricultural prospects and recovering high-frequency indicators.
Inflation averaged 10.2% in the first quarter of FY27, compared to 4.3% a year earlier, driven by higher energy prices. The State Bank of Pakistan maintained the policy rate at 11.5% in September. According to information available from the Pakistan Stock Exchange (PSX), inflation is expected to ease to the target range of 8% to 9% by the end of June 2027, although high oil prices could lead to further monetary tightening.
Subsequent to the quarter-end, a significant development occurred with the announcement of a Staff-Level Agreement with the IMF on October 7, under the Extended Fund Facility and the Resilience and Sustainability Facility. Subject to IMF Executive Board approval, the agreement is expected to release approximately USD 1.2 billion, enhancing external buffers and investor confidence.
Sector-wise, 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, while sectors like Auto Parts & Accessories, Cable & Electrical Goods, Cement, and others lagged.
Individuals and Companies were the largest net buyers in the market, with inflows of USD 93 million and USD 25 million, respectively. In contrast, Mutual Funds, Banks/DFIs, and Brokers reduced their net holdings by USD 64 million, USD 36 million, and USD 10 million, respectively.
The size of the NBP Stock Fund decreased from Rs. 61,258 million to Rs. 57,181 million, marking a decrease of 6.7%. The unit price of the NSF decreased by 6.8% from Rs. 44.7694 on June 30, 2026, to Rs. 41.7041 on September 30, 2026, underperforming its benchmark by 2.2%. Since inception, the NAV of the Fund has increased by 1,982.1%, compared to the Benchmark's increase of 848.5%, reflecting an outperformance of 1,133.6%.
NBP Stock Fund incurred a loss of Rs. 3,669.28 million during the period. After deducting total expenses of Rs. 591.80 million, the net loss stands at Rs. 4,261.08 million. The allocation of funds was primarily in Commercial Banks, followed by sectors such as Oil & Gas Exploration, Fertilizer, and Cement.