PakStox Outlook

The world is heading toward a historic oil oversupply, according to the International Energy Agency (IEA). Global production is expected to outpace demand by nearly 4 million barrels per day next year, marking the largest annual surplus ever recorded. The excess is already visible, with oil stockpiling on tankers at sea reaching the highest levels in years. The IEA says the glut has grown 18% larger than previously forecast, driven by OPEC+ boosting production and strong output from non-OPEC producers like the U.S., Brazil, Canada, Guyana, and Argentina. So far, prices have been shielded as China absorbed much of this year’s buildup, but that buffer is fading as more Middle Eastern crude heads to market. Once those barrels reach onshore storage, inventories could surge sharply. Global oil demand growth is losing steam — rising only 700,000 barrels a day this year and next, far below historical norms. The slowdown reflects weaker economic activity, trade tensions, and the shift toward e...

 The International Monetary Fund (IMF) and the Government of Pakistan have reached a staff-level agreement on the second review of the 37-month Extended Fund Facility (EFF) and the first review of the 28-month Resilience and Sustainability Facility (RSF) . Once approved by the IMF Executive Board, Pakistan will receive about $1.2 billion , taking total disbursements under both programs to approximately $3.3 billion . Economic Progress Highlighted by the IMF The IMF noted that Pakistan’s macroeconomic stability is improving: The current account recorded its first surplus in 14 years The fiscal primary balance surpassed program targets Inflation remains contained External buffers and investor confidence are strengthening Challenges Ahead The Fund cautioned that recent floods —impacting nearly 7 million people—have hit agricultural productivity, leading to a revised FY26 GDP growth projection of around 3.3–3.5% . Reform Commitments Continue Pakistani au...

The KSE100 Index soared past the 159k mark but gave up intra-day gains of over 1,300 points, closing at 158,037 with an 83-point rise, finishing the day in positive territory.  The Index capped off a highly bullish week, driven by the Saudi-Pak Defence Deal, with a weekly gain of about 3,600 points (2.33%), reaching an all-time high.🔥 https://whatsapp.com/channel/0029VaJlwuABadmVMKKzJl3K

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...