Karachi: The Board of Directors of NBP Fund Management Limited has released the unaudited condensed interim financial statements for the NBP Pakistan Growth Exchange Traded Fund (NBP-GETF) for the quarter ending September 30, 2026. The report, dated November 3, 2026, reveals a notable growth in the fund's size, increasing from Rs. 255 million to Rs. 278 million, marking a 9% rise despite challenging market conditions.
During the quarter, the unit price of the NBPGETF experienced a significant decrease from Rs. 27.1974 on June 30, 2026, to Rs. 25.4611 on September 30, 2026, representing a 6.4% decline. The fund's benchmark also saw a decrease of 6.2%, resulting in an underperformance of 0.2% by the fund. The tracking error for the period was recorded at 0.02%. Since its inception, the fund's Net Asset Value (NAV) has surged from Rs. 5.8694 (Ex-Div) on October 6, 2020, to Rs. 25.4611 on September 30, 2026, reflecting a substantial increase of 333.8%. In comparison, the benchmark increased by 399.7%, highlighting an underperformance of 65.9%.
The stock market faced pressure in the first quarter of fiscal year 2027, with the KSE-100 Index declining by 5.7% or 10,332 points, closing at 169,969. This decline was attributed to escalating tensions between the US and Iran and a sharp rise in global oil prices, raising concerns over inflation, the external account, and interest rate outlook. The index dropped 4.0% in September alone.
Despite inflation concerns, other macroeconomic indicators showed improvement. The State Bank of Pakistan's (SBP) foreign exchange reserves reached a record USD 21.4 billion in September, surpassing the end-June 2027 target of USD 21 billion. This growth 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 during the first quarter of fiscal year 2027, bolstered by a 14% rise in workers' remittances to USD 10.9 billion. The SBP anticipates remittances to exceed USD 44 billion in fiscal year 2027, with external debt servicing projected to fall by around USD 5 billion to USD 21.5 billion. Fiscal performance remained stable, with a primary surplus of 2.9% of GDP in fiscal year 2026, and the Federal Board of Revenue (FBR) meeting its target from July to September. Reflecting these improvements, Moody's upgraded Pakistan's sovereign rating to B3 from Caa1 in August, following S&P's upgrade to B in July. The SBP proje cts real GDP growth between 3.5% and 4.5% in fiscal year 2027, supported by better agricultural prospects and recovering high-frequency indicators.
Inflation continues to be a key concern, with the Consumer Price Index (CPI) averaging 10.2% in the first quarter of fiscal year 2027, compared to 4.3% a year earlier, driven by higher energy prices. However, it eased to 10.3% in September from 11.1% in August. The SBP maintained the policy rate at 11.5% in September, with inflation expected to ease to the 8% to 9% target range by end-June 2027. Persistently elevated oil prices could lead to further monetary tightening.
A significant milestone was achieved after the quarter ended, with the announcement on October 7 of a Staff-Level Agreement with the International Monetary Fund (IMF) on the fourth review under the Extended Fund Facility (EFF) and the third review under the Resilience and Sustainability Facility (RSF). Subject to approval by the IMF Executive Board, the agreement is expected to unlock approximately USD 1.2 billion, further strengthening 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. Conversely, sectors such as Auto Parts & Accessories, Cable & Electrical Goods, Cement, Engineering, Glass & Ceramics, Leather & Tanneries, Modaraba, Oil & Gas Marketing, Paper & Board, Pharmaceutical, Power Generation & Distribution, Technology & Communication, Textile Composite, and Textile Weaving underperformed.
According to information available from the Pakistan Stock Exchange (PSX), individuals and companies emerged as the largest net buyers, 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.
Looking ahead, the near-term market direction will remain influenced by developments in the Middle East and global oil prices. However, record foreign exchange reserves, resilient remittances, renewed access to international capital markets, and continued IMF engagement support the macroeconomic outlook.
The fund incurred a total loss of Rs. 17.82 million during the period. After deducting total expenses of Rs. 1.14 million, the net loss amounted to Rs. 18.96 million. As of September 30, 2026, the fund's asset allocation was as follows: Others 9.8%, Cash Equivalents and Others including receivables 1.4%, Investment Banks/Investment Companies/Securities Companies 6.6%, Power Generation & Distribution 8.1%, Commercial Banks 35.0%, Fertilizer 13.1%, and Oil & Gas Exploration Companies 26.0%.