PakStox Outlook

The State Bank of Pakistan (SBP) released its latest Monetary Policy Report (MPR), outlining recent economic developments, policy decisions, and the macroeconomic outlook. With the policy rate held at 11% in June and July, the SBP expects inflation to remain within its medium-term target. The report projects moderate economic growth, manageable external pressures, and a steady buildup in foreign exchange reserves through FY26, while highlighting potential domestic and global risks. Key Highlights Policy Rate: Held steady at 11% in June and July MPC meetings to keep the real policy rate adequately positive for inflation stability. Inflation Outlook: SBP’s fan chart suggests inflation will stay within the medium-term target range. External Account: Trade deficit expected to widen; current account deficit projected at 0–1% of GDP in FY26 despite strong remittance growth. FX Reserves: Projected to rise to $15.5 billion by December 2025, supported by financial inflows and S...

FFC aims to become fully Shariah-compliant by end-2025; 30% of Askari Bank branches to shift to Islamic banking by year-end, full conversion by 2027. Urea inventory is expected to stay around 1.3mn tons by Dec-2025. No ongoing discussions with the government on urea exports. PIA acquisition is under due diligence; no funding decisions confirmed yet. In 2Q2025, FFC earned Rs9bn from energy, Rs7bn from PMP, and the rest as interest income. No urea discounts in 1Q2025; only nominal ones in 2Q2025. As of Jun-2025, FFC held 338k tons Urea, 134k tons DAP vs industry’s 1,310k tons Urea and 336k tons DAP. Market share declined: Urea (52% → 48%), DAP (71% → 64%) in 1H2025. Phosphoric acid priced at US$1,250/ton. https://dps.psx.com.pk/download/document/257389.pdf

Engro Polymer - Analysts Briefing In the first half of 2025, Engro Polymer (EPCL) posted a loss of PKR 3.2 billion due to squeezed Ethylene-to-PVC margins, high gas prices, and plant maintenance costs, despite a 9% revenue increase driven by higher PVC, caustic soda, and hydrogen peroxide sales. PVC volumes rose 21% year-over-year to 115,000 tons, while global PVC prices remained weak at USD 730/ton amid oversupply and soft construction demand. Ethylene prices softened to USD 850/ton by June, compressing margins to USD 275/ton, and caustic soda profitability was also impacted by elevated energy costs. The company anticipates improved PVC demand ahead, supported by construction recovery and falling interest rates, although prices are expected to remain subdued through late 2025. Energy sourcing remains a major challenge, prompting exploration of third-party gas and alternative power options. Net Loss:  Company reported a loss of PKR 3.2 billion (Loss Per Share: PKR 3.55) in H1 2025 ...

Weaker Global Economic Outlook Major economic forecasters have cut their outlooks for world GDP growth in 2025 by roughly half a percentage point to around 2.8% and see a below-trend pace of about 3% annually for the remainder of the decade. OPEC+, led by Saudi Arabia, has decided to start easing oil production limits in May 2025, which is changing the expected path of oil supply from 2024 to 2030. The anticipated output increase from OPEC+ and the impact of higher tariffs on trade pushed oil prices to four-year lows in April and early May. A Decade Defined by U.S. Supply and Chinese Demand Over the past decade, oil market dynamics have been defined by the parallel growth in US oil supply and Chinese oil demand. From 2015 to 2024, the United States accounted for 90% of the increase in global supply, with the shale boom lifting US oil production by more than 8 mb/d to over 20 mb/d. At the same time, Chinese oil demand rose by nearly 6 mb/d, accounting for 60% of the global increase i...

Until recently in world history, controlling trade routes meant controlling trade itself—and, by extension, the national wealth of a country. Empires rose and fell based on their ability to command these routes. The Opium Wars, initiated by Great Britain against China, stand as some of the most blatant examples of coercive trade practices. These conflicts involved not only colonial expansion but also the imposition of trades deemed illicit by modern standards—legitimized only by brute force, as Britain “ruled the waves.” The World Wars were, to a significant extent, fueled by emerging powers seeking to challenge and dismantle British dominance over global trade. As industrial capacities soared to meet the demands of warfare, the post-war era saw a dramatic shift. The vast industrial machinery once used to sustain global conflict was redirected toward consumer production, and the focus turned to building broader, international markets. The global cooperation that culminated in the Brett...

#PSX:HUBC - Hub Power. Financially, consolidated net profit stood at Rs. 34,249 million (EPS: Rs. 26.40), down from Rs. 49,547 million (EPS: Rs. 38.20) in the same quarter last year, primarily due to the termination and amendment of PPAs for the Hub and Narowal Plants. Unconsolidated net profit was Rs. 18,566 million (EPS: Rs. 14.31), compared to Rs. 21,958 million (EPS: Rs. 16.93) last year, mainly due to the same PPA termination, though partially offset by increased dividend income and lower finance costs. Operational highlights included continued power generation across multiple plants, with notable output from TN (1,300 GWh at 66% load factor) and TEL (1,102 GWh at 56%). In the exploration and production segment, the Company progressed with the South West Miano III block, having secured JV budget and begun preparations for drilling, while continuing to explore further opportunities. On the growth front, Mega Motor Company launched BYD experience centers in major cities and is worki...

Monetary Policy Committee of the State Bank of Pakistan. has decided to cut the policy rate by 100 bps to 11 percent, effective from May 6, 2025. Policy Decision MPC cut the policy rate by 100 bps to 11% , effective May 6, 2025. Decision driven by sharp decline in inflation , especially food and electricity prices. Core inflation also declined due to a favorable base effect and moderate demand. MPC emphasized a measured stance amid global uncertainty (e.g., tariffs, geopolitics). Macroeconomic Developments Real GDP growth : Q2-FY25 at 1.7% , revised Q1 up to 1.3% from 0.9%. Current account surplus : $1.2 billion in March , cumulative $1.9 billion in July–March FY25. Business and consumer sentiment continued to improve. Tax shortfall widened; global uncertainty led to IMF’s downward revision of global growth forecasts. Real Sector H1-FY25 GDP growth at 1.5% , in line with expectations. Positive momentum in vehicle and fuel sales, electricity generati...