Karachi: ABL Asset Management Company Limited, managing the Allied Finergy Fund (AFF), presented the condensed interim financial statements for the quarter ending on September 30, 2024, highlighting key economic shifts and fund performance during the initial phase of FY25. According to information available from the Pakistan Stock Exchange (PSX), the fund's management provided a comprehensive review of Pakistan’s economic environment, with impacts felt from recent regulatory decisions and market adjustments.
The quarter showcased notable economic shifts, including a 37-month Extended Fund Facility (EFF) approved by the International Monetary Fund (IMF) on September 27, 2024, delivering an initial tranche of USD 1.00 billion, which improved Pakistan's foreign exchange reserves to a two-and-a-half-year high. Inflation fell to 9.2% year-on-year (YoY) from 29.0% in the same quarter last year, prompting the State Bank of Pakistan (SBP) to cut the policy rate by 300 basis points to 17.5%. This adjustment aligns with anticipated inflationary decline, potentially signaling further rate cuts.
The country posted a current account deficit of USD 171.00 million, marking an 81% improvement from the previous year’s deficit. This favorable shift was attributed to a USD 328.00 million YoY increase in exports, reaching USD 6.10 billion. Additionally, workers' remittances increased by 44% YoY to USD 5.90 billion, bolstering external account support.
On the fiscal side, tax revenues collected by the Federal Board of Revenue (FBR) rose by 25% YoY to PKR 2,555.00 billion for the quarter, underscoring the government’s focus on fiscal discipline. The IMF’s EFF, supported by declining inflation and stable foreign exchange reserves, provides optimism for Pakistan’s macroeconomic outlook, particularly as fiscal measures and policy adjustments continue.
The mutual fund industry reported a total asset growth of 7.8% YoY, with Allied Finergy Fund’s assets under management reaching PKR 129.02 million by the quarter’s end, up from PKR 116.80 million on June 30, 2024. Equity investments showed a decline, attributed to political turmoil and fluctuating interest rates, while conventional and Islamic funds saw notable growth in asset inflows.
The equity market had a robust quarter, with the KSE-100 index closing the quarter up by 3.4%, reaching an all-time high of 82,247 points in September. Despite a net foreign outflow of USD 21.70 million due to FTSE rebalancing, strong performances from sectors like fertilizer and oil and gas exploration contributed significantly, while the power, technology, and engineering sectors posted negative returns.
Allied Finergy Fund’s performance for the quarter reflected a -0.89% return, underperforming against the benchmark return of 3.40%. The fund's allocation was 71.48% in equities and 28.52% in cash. In October 2023, the Pakistan Credit Rating Agency Limited (PACRA) affirmed ABL AMC’s management quality rating at 'AM1' (AM-One) with a stable outlook.
The AFF report forecasts continued stability and growth in the equity market, contingent on fiscal discipline and political stability. This environment is expected to attract further investments, aided by sustained fiscal reforms and monetary easing measures.