Karachi: The NBP Fund Management Limited has released the unaudited interim financial statements for the NBP Financial Sector Fund (NFSF), highlighting significant growth for the quarter ending September 30, 2025. The fund’s performance has been buoyed by a strong stock market rally with a 32% return, marking a big move in the market.
The upward trend of the stock market continued during the first quarter of FY26, building upon substantial gains of 89% in FY24 and 60% in FY25. The KSE-100 Index concluded the period at a historic 165,494 points, driven by sectors such as Commercial Banks, Cement, Oil & Gas Exploration, Fertilizer, and Power Generation.
Inflation averaged 4.2% during the quarter, a decrease from the previous year’s 9.2%, but slightly higher than the 2.3% recorded in the fourth quarter of FY25. The State Bank of Pakistan projects average inflation for FY26 to remain within the 5%-7% target range, with a potential increase later in the year. The policy interest rate has seen a reduction from 22% to 11%, with limited further easing anticipated.
On the external economic front, the current account deficit expanded to LISD 624 million for the first two months of FY26, attributed to increased imports. Remittances rose by 8.4% year-on-year during the quarter, with foreign exchange reserves stable at LISD 14.4 billion as of September 26, 2025, despite a Eurobond repayment of LISD 500 million. Reserves are expected to rise to around LISD 17 billion by June 2026.
A notable development during the quarter was the completion of the IMF’s second review under the Extended Fund Facility, along with the first review of the 28-month Resilience & Sustainability Facility. A Staff-Level Agreement reached in October 2025 is expected to unlock around LISD 1.2 billion in financial assistance, pending IMF Executive Board approval, which should bolster external financial buffers.
The government has revised the GDP growth for FY25 upward to 3.04% from 2.68%, reflecting robust industrial sector performance. GDP growth for FY26 is anticipated to be between 3.0%-3.5%, supported by the industrial and services sectors, although agriculture may face challenges due to recent flooding.
Sector-wise, Auto Parts & Accessories, Cable & Electrical Goods, Cements, Commercial Banks, Power Generation & Distribution, Technology & Communication, Textile Composite, and Tobacco sectors outperformed the market. In contrast, sectors such as Oil & Gas Exploration, Oil & Gas Marketing, Automobile Assembler, Chemicals, Engineering, Fertilizers, Food & Personal Care, Glass & Ceramics, Investment Banks/Companies, Pharmaceutical, and Transport lagged.
Investor activity showed Mutual Funds, Individuals, and Companies as the largest net buyers, with inflows of LISD 206 million, LISD 89 million, and LISD 28 million, respectively. Meanwhile, Banks/DFIs, Foreign Investors, and Other Organizations reduced their holdings by LISD 150 million, LISD 132 million, and LISD 39 million, respectively.
The NBP Financial Sector Fund’s size increased significantly from Rs. 325 million to Rs. 953 million, representing a very large or significant move of 193.2%. The unit price of the fund rose from Rs. 15.7174 on June 30, 2025, to Rs. 22.9002 on September 30, 2025, showcasing an increase of 45.7%. The benchmark index for the same period increased by 34.9%, with the fund outperforming its benchmark by 10.8%.
Since its inception, the unit price of NFSF has increased from Rs. 5.0298 to Rs. 22.9002, marking an increase of 355.3%. However, this represents an underperformance compared to the benchmark’s increase of 336.5% since inception, by 18.8%.
According to information available from the Pakistan Stock Exchange (PSX), the fund earned a total income of Rs. 229.28 million during the period. After deducting total expenses of Rs. 8.15 million, the net income stood at Rs. 221.13 million.
The fund’s assets increased from Rs. 680.85 million to Rs. 993.16 million, while liabilities decreased from Rs. 356.16 million to Rs. 40.30 million, resulting in net assets of Rs. 952.86 million. The net asset value per unit moved from Rs. 15.7174 to Rs. 22.9002 during the quarter.
The NBP Financial Sector Fund, established under a Trust Deed, aims to provide investors with long-term capital growth from a portfolio of financial sector equities. The fund is managed by NBP Fund Management Limited and is listed on the Pakistan Stock Exchange.