Karachi: The NBP Islamic Sarmaya Izafa Fund (NISIF), managed by NBP Fund Management Limited, has reported a significant decrease in its fund size for the quarter ending September 30, 2026. According to the unaudited condensed interim financial statements presented by the Board of Directors, the fund size shrank from Rs. 2,277 million to Rs. 1,978 million, marking a decrease of 13.1%.
The fund's performance was heavily influenced by the broader market trends, with the KMI-30 Index experiencing a significant decline of 5.3% during the first quarter of fiscal year 2027. The index closed at 243,609 points, driven by escalating US-Iran tensions and a sharp rise in global oil prices. September alone saw the index fall by 3.2%, reflecting a very large or significant move.
Despite the market pressures, macroeconomic indicators in Pakistan showed signs of improvement. The State Bank of Pakistan's foreign exchange reserves rose to a record USD 21.4 billion in September, surpassing the year-end target. This was supported by Pakistan's largest-ever Eurobond issuance of USD 3 billion. The current account deficit narrowed by 16% year-on-year to USD 874 million, with workers' remittances increasing by 14% to USD 10.9 billion. Moody's upgraded Pakistan's sovereign rating to B3 in August, following an upgrade by S&P to B in July.
Inflation remains a concern, with the Consumer Price Index (CPI) averaging 10.2% in the first quarter of FY27, compared to 4.3% a year earlier. However, it eased slightly to 10.3% in September. The State Bank of Pakistan maintained the policy rate at 11.5% in September, with inflation expected to fall within the 8% to 9% target range by June 2027.
According to information available from the Pakistan Stock Exchange (PSX), sector-wise performance varied significantly. Commercial Banks, Fertilizer, and Oil & Gas Exploration sectors outperformed the market, while sectors such as Auto Parts & Accessories and Cement lagged. Market participants displayed varied activity, with Individuals and Companies emerging as the largest net buyers, whereas Mutual Funds and Banks/DFIs reduced their net holdings.
The NBP Islamic Sarmaya Izafa Fund reported a unit price decrease from Rs. 36.7381 on June 30, 2026, to Rs. 34.2677 on September 30, 2026, reflecting a decrease of 6.7%. This performance underperformed the benchmark, which decreased by 4.0%, resulting in the fund underperforming its benchmark by 2.7%. Since inception, the fund's NAV increased by 1,289.7%, outperforming the benchmark's increase of 827.7% by 462.0%.
During the quarter, the fund incurred a net loss of Rs. 153.14 million after total expenses of Rs. 20.15 million. The fund's portfolio included significant allocations to Oil & Gas Exploration Companies (25.3%) and Cement (11.0%), among others.
Looking ahead, the fund's outlook remains tied to geopolitical developments and global oil prices, although Pakistan's record foreign exchange reserves and continued engagement with the IMF provide some macroeconomic support.