Karachi: The MCB DCF Income Fund has released its performance report for the quarter ended September 30, 2024, detailing significant achievements and strategic adjustments in response to the economic conditions. According to information available from the Pakistan Stock Exchange (PSX), the fund showcased a robust return and a promising outlook amidst various market dynamics.

The fund's Net Asset Value (NAV) per unit rose to Rs. 116.0628 from Rs. 109.0852 at the start of the quarter, marking an increase of Rs. 6.9776 per unit. This performance is highlighted during a period where the Pakistani economy continued to stabilize and adapt to global economic pressures.

During the quarter, the Pakistani economy showed signs of recovery, aligning with the government’s successful negotiation of a staff-level agreement with the International Monetary Fund (IMF) for a 37-month Extended Fund Facility (EFF) worth approximately USD 7.0 billion. The approval of this program by the IMF Executive Board on September 27, 2024, has bolstered market confidence, contributing to a slight appreciation in the USD/PKR parity by 0.2% to close the quarter at 277.7.

The country’s economy reported a current account deficit (CAD) reduction by 81% YoY, aided significantly by a 44.0% increase in remittances inflows, which reached USD 8bn. The economic measures have led to a considerable decrease in headline inflation, which averaged 9.2% during the quarter compared to 29.0% in the corresponding period last year.

In terms of GDP growth, Pakistan saw an increase of 2.5% in the financial year 2023-24, with sectors like agriculture growing by 6.4% and services by 2.2%. Despite these gains, challenges remain, including political uncertainty and subdued industrial output, which have affected tax revenue projections, missing targets by PKR 96 billion for the quarter.

The mutual fund industry in Pakistan also experienced growth, increasing its net assets by 13.9% during the quarter. The MCB DCF Income Fund, in particular, generated an annualized return of 25.38%, outperforming its benchmark return of 18.90%. The fund remains strongly positioned in T-Bills and Cash, constituting 55.7% and 17.2% of its portfolio, respectively, by the end of the period.

Looking ahead, the fund anticipates further monetary easing, with policy rates expected to decline to 13.0% by June 2025. This projection is supported by improved external account metrics and continued IMF oversight, suggesting a stable economic environment for the near future.