Karachi: The Board of Directors of JS Global Capital Limited has released its third quarterly report for 2026, shedding light on the economic and financial landscape of Pakistan as of September 30, 2026. The report highlights the significant impacts of the Middle East conflict on Pakistan’s economy, as well as key developments in the nation’s capital markets and fiscal strategies.
Despite the inflationary pressures resulting from a surge in international oil prices, Pakistan's central bank opted to maintain the policy rate at 11.5% in its recent meeting. The Monetary Policy Committee (MPC) expressed confidence in the medium-term inflation outlook while noting external account pressures remained contained. However, the committee underscored potential inflation risks due to the ongoing Middle East crisis and its implications for commodity prices.
In a notable financial maneuver, Pakistan successfully raised US$3 billion through a dual-tranche sovereign Eurobond issuance on the London Stock Exchange in September 2026. This fundraising followed a significant upgrade of Pakistan's sovereign credit rating by Moody's to B3 from Caal in August, with a stable outlook. Moody's cited anticipated improvements in governance and a reduction in external and fiscal vulnerabilities as reasons for the upgrade.
Consumer Price Index (CPI) inflation averaged a substantial -10% during the first quarter of FY27, with a marked increase in transport costs driving the overall figure. Pakistan's external accounts have remained manageable, as evidenced by a current account deficit of US$98 million in August 2026, representing a 78% reduction from July’s revised shortfall. The deficit for the second quarter of FY27 stood at US$543 million, down 36% year-on-year.
The State Bank of Pakistan's foreign exchange reserves have reached record-high levels, exceeding US$21 billion and extending import cover to over 21 months by September 2026. This increase is largely attributed to the recent Eurobond issuance. Meanwhile, the government has announced its borrowing plan for FY27, which includes US$15.6 billion in total external debt principal maturities. The plan anticipates potential rollovers of US$7 billion in bilateral deposits and a net inflow of US$1.58 billion from multilateral partners.
The country is currently undergoing its fourth review under the IMF's Extended Fund Facility, with an expected disbursement of US$1.2 billion during the December quarter.
According to information available from the Pakistan Stock Exchange (PSX), the equity market, represented by the KSE-100 Index, experienced a significant decline of 5.7% during the third quarter of 2026 compared to June levels. This downturn aligns with trends observed across Asian markets, driven by rising global commodity prices and volatility in global inflation and bond yields. Geopolitical tensions in the Gulf, particularly affecting oil flows from Saudi Arabia, have maintained Brent crude prices above US$100 per barrel, approximately 70% higher than December 2025 levels.
Average traded volumes decreased by 9% year-on-year to 749 million shares during the third quarter, while average daily traded turnover in US dollar terms fell by 11% year-on-year to US$119 million. Foreign activity in the market remained minimal, with a US$7 million net outflow during the same period.
For the JS Global Banking Sector Exchange Traded Fund, the net asset value per unit stood at Rs. 39.07 as of September 30, 2026, reflecting a moderate move with a return of 0.94% compared to the benchmark return of 0.25%. The fund's net assets totaled Rs. 358.30 million, and the total expense ratio was 0.10%, inclusive of 1.02% government levies.