In CY24, Pakistan’s Islamic equity market saw a strong bull run, with the KMI-30 index rising by ~70.56%. Key drivers included the IMF program approval, monetary easing, renewed foreign investor interest, exchange rate stabilization, and foreign exchange reserves reaching USD 15.9 billion by Dec’24. These factors boosted market sentiment, benefiting Shariah-compliant equities. PACRA assigned star ratings to three funds out of twenty-one, with the category posting an average return of ~82.20%. The top-performing fund achieved ~115.7%, while NBP Islamic Stock Fund generated a return of ~87.30%, maintaining its 3-Star rating. As of Dec’24, the Fund held ~92.3% in equities for strong exposure to growth sectors. It maintained ~6.1% in cash for liquidity. Sector allocation included ~33.7% in Oil & Gas Exploration, ~12.7% in Cement, ~8.9% in Fertilizers, ~8.5% in Oil & Gas Marketing Companies, and ~5.8% in Pharmaceuticals. The remaining ~22.7% was spread across other sectors.

Over the past three years, Pakistan’s Shariah-compliant equity market faced significant challenges, including policy uncertainty, IMF delays, fiscal imbalances, fluctuating interest rates, and high inflation. Despite this, the segment showed resilience, benefiting from a broader market recovery in CY24, driven by monetary easing, exchange rate stability, and renewed investor confidence. PACRA assigned star ratings to two funds out of eighteen, with the segment posting an average return of ~143.61%. The top-performing fund gained ~233.69%, while NBP Islamic Stock Fund delivered a return of ~136.63%, maintaining its 3-Star rating. As of Dec’24, the Fund had ~92.3% in equities for strong exposure to Shariah-compliant growth sectors. It held ~6.1% in cash for liquidity. Sector allocation included ~33.7% in Oil & Gas Exploration, ~12.7% in Cement, ~8.9% in Fertilizers, ~8.5% in Oil & Gas Marketing Companies, and ~5.8% in Pharmaceuticals. The remaining ~22.7% was spread across other sectors.

Over the past five years, Pakistan's capital markets experienced significant volatility, marked by IMF program delays, fiscal deficits, political uncertainty, and fluctuating inflation and policy rates. Despite these challenges, the Shariah-compliant equity segment showed resilience. NBP Islamic Stock Fund posted a strong cumulative return of ~165.09%, earning a 4-Star rating from PACRA. This outperformed the category average of ~120.51%, though it lagged behind the top fund's return of ~218.57%. As of Dec’24, the Fund had ~92.3% in equities, ensuring exposure to Shariah-compliant growth sectors, and maintained ~6.1% in cash to manage liquidity. Sector allocation included ~33.7% in Oil & Gas Exploration, ~12.7% in Cement, ~8.9% in Fertilizers, ~8.5% in Oil & Gas Marketing, and ~5.8% in Pharmaceuticals. The remaining ~22.7% was diversified across other sectors. The Fund’s sustained rating highlights its effective risk management and commitment to delivering competitive, risk-adjusted returns.