Fuel ⛽, Markets 📉, Policy 🏦

Another Week, Another Pulse!

Global uncertainty tightened its grip as the Israel–Iran war entered its second consecutive week, sending shockwaves through energy markets, regional economies, and geopolitical alliances. The conflict intensified with continued strikes on Iranian oil storage and refining facilities, while retaliatory drone and missile attacks across the Gulf signaled the risk of a wider regional disruption. Oil markets reacted swiftly, with crude prices surging past $90 per barrel for the first time in two years, and warnings emerging that prices could climb as high as $150 per barrel if Gulf energy exports are disrupted.

Closer to home, Pakistan felt the ripple effects almost immediately. The government delivered what many are calling a “petrol bomb,” raising petrol and diesel prices by Rs55 per litre, alongside a near 70% increase in kerosene prices. The sudden hike, combined with fears of tightening fuel supplies and declining reserves, triggered widespread concern among the public and businesses alike. In response to the evolving situation, the government has moved toward weekly petroleum price revisions starting March 8 and is considering fuel conservation measures such as work-from-home and distance learning if supply disruptions intensify.

The economic backdrop remains equally tense. The IMF cut short its visit to Pakistan due to security concerns, shifting negotiations to virtual discussions from Turkey as the country seeks to secure the next $1.2 billion tranche of its program. At the same time, the Fund has raised objections to Pakistan’s proposal to allocate nearly Rs1 trillion in power subsidies for the upcoming fiscal year, adding another layer of complexity to the ongoing negotiations.

Amid the uncertainty, there were a few developments worth noting. Pakistan has passed the Virtual Assets Act 2026, formally creating a legal framework for digital assets, while preparations for the 5G spectrum auction scheduled for March 10 continue with mock bidding sessions conducted by the PTA. On the energy front, authorities confirmed that three petroleum shipments are expected to arrive shortly, and Saudi Arabia has pledged additional support through oil supplies via the Port of Yanbu to help stabilize Pakistan’s energy needs.

However, structural challenges persist. Pakistan’s trade deficit widened by 25% to $25 billion in the first eight months of FY26, while inflationary pressures continue to build, with the Sensitive Price Index (weekly inflation) rising 4.7% year-on-year, driven largely by food and energy costs.

With geopolitical tensions escalating, energy markets on edge, and economic negotiations underway, all eyes now turn to the Monetary Policy Committee, which is set to announce its latest decision today. A move that could shape market expectations and economic sentiment for the week ahead.

Here’s a recap of everything you need to know!

🎧 Tune in to this week’s Pulse:

Youtube - https://youtu.be/gHgFQ64F1rI

Spotify - https://open.spotify.com/episode/1AIRGa7PsGnTdLIMw1FAjl?si=b3H3jZGRSZS9tt9eq6Mn9Q

The Pakistan Stock Exchange endured a "bloodbath" this week, marking its sixth consecutive weekly loss as the benchmark KSE-100 Index plummeted by 3,715 points to settle at 157,496. Investor sentiment was crushed by the intensifying Middle East conflict, leading to a defensive sell-off as traders rushed to reduce risk exposure amid heightened geopolitical uncertainty. During the shortened trading sessions, market participants remained largely cautious, opting for a "wait and see" approach ahead of the weekend. On the macroeconomic front, the market remains on edge for the State Bank of Pakistan’s announcement, with the general consensus expecting the policy rate to be maintained at 10.5% to stabilize the economy against these global shocks.

SECP Proposes Incentives for Investors Bringing New Participants to Stock Market

The SECP has proposed allowing stockbrokers to launch referral programs where existing investors can introduce new participants to the stock market in exchange for non-cash incentives like commission discounts or trading credits. The initiative aims to increase retail participation and broaden Pakistan’s investor base while maintaining transparency through capped and regulated incentives. The proposal is currently at the concept paper stage, after which SECP may introduce amendments to formally implement the framework. 

Citi Pharma Plans Rs. 2 Billion IPO for Animal Health Subsidiary

Citi Pharma plans to raise up to Rs. 2 billion through an IPO of its wholly owned subsidiary, Citi Veterinary Pharma, which focuses on manufacturing veterinary pharmaceuticals for the local market. The move is part of the company’s strategy to diversify revenue within the pharmaceutical sector, with FY26 revenue from veterinary products projected at Rs. 1.5 billion. K Trade Securities has been appointed as consultant to manage the IPO, and the next steps include completing regulatory approvals, finalizing the issue size, and listing the subsidiary on the Pakistan Stock Exchange, providing investors with an opportunity to participate in the growing animal health segment. 

OGDC Announces Fresh Oil and Gas Discovery in KP

OGDC has announced a new oil and gas discovery at its Baragzai X-01 (Slant) well in Khyber Pakhtunkhwa’s Nashpa block, producing 3,765 barrels of oil and 11.2 million cubic feet of gas per day from the Lockhart Limestone formation. The find, part of a joint venture with Pakistan Petroleum Limited (30%) and Government Holdings (5%), strengthens Pakistan’s efforts to reduce its energy shortfall. Next steps include further testing and development of the well to optimize production and contribute to the country’s domestic energy supply. 

Govt Plans Income Tax Relief for Salaried Individuals

The government, with Prime Minister Shehbaz Sharif’s approval, plans to seek IMF consent to abolish the super tax and cut income tax rates for salaried individuals by 5%, potentially lowering the top rate to 30% and adjusting the income slab for relief. The move aims to reduce the tax burden on households and stimulate economic activity. Next, the proposal will be formally presented to the IMF for approval before implementation. 

PMEX to begin trading in rice, maize, sugar

The Pakistan Mercantile Exchange (PMEX) is set to launch futures trading in rice, maize, and sugar in the coming months, marking its entry into agricultural commodities alongside ongoing precious metals trading. The move aims to modernize Pakistan’s 125-year-old mandi system, reduce price distortions, and provide farmers with more stable market access. Next, PMEX will begin formal trading through licensed brokers, offering a fully regulated digital platform for investors and traders.

🚨 SBP Monday: A Surprise Rate Jump in the shadows? 🏦📈

On Monday, March 9, the State Bank of Pakistan (SBP) meets to decide the fate of the 10.5% policy rate. While most were expecting a "Single-Digit" cut, the winds have shifted.

With global #Brent oil prices surging 25% and local inflation ticking back up to 7.0% in February, analysts are no longer just talking about a "Hold"—the fear of a Rate Jump is back on the table.

Out of all funds investing in the financial sector, the NBP Financial Sector Fund (NFSF) stands out as the top performer. It has delivered a staggering 465.09% absolute return over the last 3 years.

🔍 Under the Hood: The "Strike Force"

This fund is an aggressive 80.8% bet on the giants that will move the second the SBP headline hits. If rates jump, these banks win big:

Meezan Bank ($MEBL): 13.70%

Askari Bank ($AKBL): 13.00%

MCB Bank ($MCB): 12.70%

⚖️ The Two-Way Play for Monday

Scenario A: The Hike (The Shock): Banks immediately expand their profit margins. This fuels the massive dividends that have driven this fund’s 465% rally.

Scenario B: The Hold/Cut: If the SBP ignores the oil surge and cuts anyway, banks win through "Revaluation Gains"—their billions in Government bonds become worth more overnight.

Stop playing the guessing game and start checking where your money is actually being put. You don't need to predict the headline; you just need to own the engines that drive the profit.

Are you betting on a "Rate Hike" surprise or a "Status Quo" on Monday? 

🔗 Audit the full Sector and Company Breakdown on Behtari: https://behtari.com/mutual-funds/nbp-financial-sector-fund

_{Today’s Pulse by Capital Stake is brought to you by Hubab Irfan}