Markets 📈, Deals 🤝, Economy 💹

Another Week, Another Pulse!

As the weather turns colder, Pakistan’s economic mood remains cautious. This week, all eyes are on the State Bank of Pakistan as it announces its Monetary Policy (See Historical Data). Most people expect interest rates to stay the same, and for now, there seems to be little room for relief. With inflation risks still present, the message from global lenders is clear: it’s better to stay careful than rush into rate cuts.

Meanwhile, the IMF continues to shape much of the economic conversation. While Pakistan has The IMF continues to shape the story. Pakistan received US$1.2 billion after the latest review, but the Fund added 11 new conditions, bringing the total to 64 under the $7 billion programme. These cover tax reforms, subsidy cuts, circular debt control, and irrigation charges. The takeaway: the focus is on fixing long-term problems, not handing out short-term relief.

Energy and fiscal policy are under the spotlight. Fuel margins were increased for companies, but dealers are pushing for higher profits, while the government plans to raise the petroleum levy to Rs85 per litre and clear Rs1.7 trillion in gas sector debt. Fuel prices might dip slightly in the next fortnight, but costs for households and businesses are unlikely to fall significantly.

On the brighter side, the Asian Development Bank upgraded Pakistan’s growth outlook for 2025 and 2026, pointing to stabilising food prices. Remittances rose 9.4% in November, providing a steady inflow of foreign currency and helping households stay afloat.

Yet, challenges are hard to ignore. Domestic and foreign investment is weak, with treasury bill outflows up 54% in November. Inflation continues to squeeze households (SPI +3.9% year-on-year), car sales fell 11% month-on-month, and nearly 39% of tax filers reported no income, limiting government revenue. Put together, these trends highlight an economy that is stabilising but still fragile.

The bottom line: Pakistan is managing to stay afloat, supported by external funding and stabilising prices, but real relief—lower costs, stronger growth, and more investment—will depend on how quickly reforms take hold. For now, the economy is steady but under pressure, and everyone from businesses to households will feel the effects.

Here’s your recap of all the important news you need to know.

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Pakistan’s benchmark KSE-100 Index hit a new all-time high of 169,964.52 points, closing the week at 169,865, up 1.66% week-on-week. Investor sentiment was boosted by the IMF’s approval of a $1.2 billion disbursement under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF).

Systems Limited to Acquire Confiz Pakistan in Major Amalgamation Deal

Systems Limited (SYS) is set to acquire Confiz Pakistan in a strategic merger, after its Board approved combining Confiz and its group companies into Systems Limited. This merger strengthens Systems’ position in the IT sector by expanding its capabilities, client base, and market reach. Confiz shareholders will receive Systems Limited shares as part of the deal. The merger is still subject to approvals from shareholders, regulators, and the Lahore High Court, and once completed, it could reshape the competitive landscape of Pakistan’s technology industry.

PABC Board Approves Rs. 621 Million Agri Fund Investment and New Afghan Facility

PABC is expanding strategically, with its Board approving a Rs. 621 million investment for a 60% stake in the Alfalah Agri-Cultivation Fund – I, focused on sustainable farming projects like Terra Crop Innovations in the Cholistan Desert. This aims to boost food security, exports, and import substitution. Additionally, PABC plans a new beverage can facility in Afghanistan with a 1.3 billion-can capacity and $110 million investment, pending approvals. Together, these moves strengthen PABC’s growth and diversification strategy.

Pakistan to allow Binance to explore 'tokenisation' of up to $2 billion of assets

Pakistan is exploring the tokenisation of up to $2 billion in government assets with Binance, including sovereign bonds, treasury bills, and commodity reserves. The move, formalized through a memorandum of understanding, aims to boost liquidity, improve transparency, and attract international investors. Pakistan has also given preliminary clearance for Binance and HTX to set up local subsidiaries and prepare for full exchange licenses. If implemented, this initiative would use blockchain technology to digitize real-world assets, following global trends in countries like the UAE, Japan, and parts of the EU.

Govt Plans Large-Scale Battery Storage and Clean Energy to Stabilize Grid

Pakistan is accelerating its shift toward clean energy with plans for large-scale Battery Energy Storage Systems (BESS) to stabilize the national grid amid rising renewable integration. The government is encouraging private investment in BESS to manage fluctuations, optimize demand, and strengthen system reliability. The share of clean energy in the power mix has already reached 46%, surpassing the 2025 target of 40%, while the government aims to reach 60% by 2030. This strategy also supports a gradual reduction in reliance on imported LNG, marking a broader push toward sustainable and locally sourced energy.

World Bank announces $400mn project to improve urban services and resilience in Pakistan

The World Bank approved $400 million for the Punjab Inclusive Cities Program, aiming to improve water, sanitation, hygiene, and waste management in 16 cities, benefiting over 6.5 million people. The project will strengthen local governments, reduce waterborne diseases and child stunting, and make urban services more sustainable and climate-resilient.

IMF Sees Pakistan Easing Default Risk, Government Prepares Backup Fiscal Plan

The IMF sees Pakistan stepping back from default risk, but challenges remain. Growth is projected to reach 3.2% by FY2026, while inflation has eased sharply, and fiscal tightening is narrowing the deficit. Public debt remains high and foreign investment weak, keeping real recovery limited. To stay on track, Pakistan has shared a backup fiscal plan with the IMF to avoid a mid-year mini-budget, including new taxes on fertilizers, pesticides, and high-value sugar products, alongside strict spending controls. These measures aim to maintain fiscal discipline, meet IMF performance criteria, and support the long-term goal of raising the tax-to-GDP ratio to 15%.

US Approves $686 Million F-16 Upgrade Package for Pakistan

The US has approved a $686 million F-16 upgrade package for Pakistan, including avionics, Link-16 data links, cryptographic systems, training, and logistical support. The upgrades will modernize Pakistan’s air capabilities, extend the operational life of its F-16 fleet through 2040, and ensure interoperability with US and allied forces. Lockheed Martin will lead the program, which also addresses flight safety and operational readiness, supporting Pakistan’s ability to participate in joint exercises and counterterrorism operations without altering the regional military balance.

💡 Thinking about which fund category to invest in?

Check out the historical monthly trends before making your decision!

✨ Capital Protected & Income Funds:

Delivered strong returns of 8–9%, supported by stable interest rates and low-risk fixed-income investments.

📊 Money Market Funds:

Provided consistent 7–9% returns, driven by short-term government and bank securities — ideal for safety and liquidity.

🌙 Shariah-Compliant Funds:

Showed mixed performance — Aggressive Fixed Income stayed resilient with high-yield sukuks, while Balanced and Index Trackers fluctuated due to equity exposure and broader market trends.

📉 Equity Funds:

Saw solid growth mid-year but dipped into negative territory by October amid market volatility and shifting economic sentiment.

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