Karachi: MCB Investment Management Limited has released the quarterly report for the Alhamra Islamic Stock Fund (ALHISF) for the period ending September 30, 2026. The report provides a comprehensive overview of the fund's performance amidst a challenging economic and geopolitical landscape.
Dated October 30, 2026, the report outlines a current account deficit of USD 543 million for Pakistan during the first two months of fiscal year 2027, which is a reduction from the USD 853 million deficit in the same period last year. The trade deficit increased by 18.8% year-over-year, with exports rising by 4.0% and imports by 11.4%. Remittance inflows surged by 14.7% to USD 7.3 billion. The State Bank of Pakistan's foreign exchange reserves grew to USD 21.4 billion from USD 18.4 billion at the close of the previous fiscal year. The local currency appreciated moderately by 0.4%, ending the quarter at an exchange rate of 277.1 USD/PKR.
Inflationary pressures intensified, with headline inflation averaging 10.2% during the first quarter of FY27, a significant increase from 4.3% in the previous year. The uptick was largely due to elevated global oil prices, influencing domestic fuel costs and subsequent inflationary effects across various sectors. Pakistan's GDP growth for FY26 was recorded at 3.7%, with the agricultural, industrial, and services sectors expanding by 2.9%, 3.5%, and 4.1%, respectively. The Federal Board of Revenue's tax collections rose by 6.7% year-over-year to PKR 3,083 billion, surpassing the target by PKR 30 billion.
Pakistan's equities market faced substantial challenges in the first quarter of FY27, with the KSE-100 Index dropping by 10,332 points, a decline of 5.7% for the fiscal year to date, closing at 169,969 points. Geopolitical tensions, particularly between the US and Iran, alongside uncertainties surrounding the Strait of Hormuz, kept oil prices high and exacerbated concerns regarding Pakistan's inflation and external accounts. Despite favorable domestic developments such as the upgrade of Pakistan's credit rating by S&P Global Ratings to 'B' with a stable outlook and record-high foreign exchange reserves, market sentiment remained cautious.
According to information available from the Pakistan Stock Exchange (PSX), mutual funds, banks, and foreign investors were net sellers, with outflows of USD 64.2 million, USD 36.2 million, and USD 2.84 million, respectively. These were largely offset by inflows from individuals and corporates, amounting to USD 92.8 million and USD 25.4 million, respectively. The average trading volumes on the KSE-All Index fell to 748.5 million shares from 834.1 million shares in the previous quarter, and the average trading value declined by 12.6% to approximately USD 118.5 million.
The report highlights that the ALHISF reported a return of -7.14% compared to the benchmark return of -5.33%, with the fund's equity exposure at 94.2%. The fund's net assets decreased to PKR 9,900 million from PKR 11,655 million as of June 30, 2026, reflecting a significant move of 15.058%. The Net Asset Value per unit fell from PKR 31.64 to PKR 29.38, a decrease of PKR 2.26 per unit.