According to Pakistan’s Finance Minister Ishaq Dar’s announcement last week that the country had obtained an additional $13 billion in financial backing from China and Saudi Arabia, the stock market entered the week in the green.
After trading began, the KSE-100 index soon began to rise, reaching an intraday high of 351.11 points, or 0.84 percent, at 10am.
Later in the day, though, the market partially undid its gains, closing at 42,047.36 points, up 191.05 points, or 0.46 percent, from Friday’s close.
The stock market increased in response to anticipated financial backing from China and Saudi Arabia, which would improve the nation’s balance of payments position, according to Raza Jafri, head of equities at Intermarket Securities. However, the gains were restrained because political events drew closer in the background.
He was alluding to the PTI’s long march to Islamabad, which was resumed on Wednesday after being put on hold last week following Imran Khan’s attempted assassination.
Salman Naqvi, the head of research at Aba Ali Habib Securities, agreed with Jafri’s analysis and said that in addition to China and Saudi Arabia, Pakistan also received “excellent support” from governments like Qatar.
Ishaq Dar predicts that the dollar would soon go below Rs200, thus this is fantastic news. As a result of the trouble-free passage of the previous two days, there is less tension on the political front. This is the cause of the market’s positive performance, he said.
Amir Shehzad, Director of First National Equities Limited, stated that the political situation, which had risen following Thursday’s attack on Imran, had “calmed down a bit.” As a result, investors’ confidence had returned.
He continued, “Hopefully, everything will stay under control going forward, and the market should perform better from this point on.”
On Friday, the index had collapsed as soon as the bell had rung, and it had been losing ground all day. Investors shied away from the equity market as a result of the escalating political unrest following the attack on Imran, and volume across the board decreased.
Later that day, Finance Minister Dar briefed reporters on a promise made by Chinese leaders to roll over $4 billion in sovereign loans, refinance $3.3 billion in commercial bank loans, and increase currency swap by approximately $1.45 billion, from 30 billion to 40 billion yuan, during Prime Minister Shehbaz Sharif’s recent trip to Beijing. The total figure came to $8.75 billion.
Meanwhile, he added that Saudi Arabia had “responded positively” to Pakistan’s proposal to double its delayed oil facility of $1.2 billion and increase its funding by another $3 billion to $6 billion.