Stocks jump 318 points on expected $13bn from Saudi, China

The stock market opened the week in green owing to Finance Minister Ishaq Dar’s statement last week that Pakistan had secured about $13 billion in additional financial support from China and Saudi Arabia, analysts said.

The benchmark KSE-100 index gained 317.68 points, or 0.76 per cent, to reach 42,173.99 points at 10:04am.

Head of Equities at Intermarket Securities, Raza Jafri, said while the stock market rose in reaction to expected support from China and Saudi Arabia which would help the country’s balance of payments position, the gains were in check since political developments loomed large in the background.

He was referring to the resumption of the PTI’s long march to Islamabad on Tuesday (tomorrow), which was halted last week after the assassination attempt on party chief Imran Khan.

Aba Ali Habib Securities Head of Research Salman Naqvi seconded Jafri’s view, saying that besides China and Saudi Arabia, Pakistan was also receiving “good support” from other countries such as Qatar.

“This is good news and Ishaq Dar says the dollar will come below Rs200 soon. The last two days have gone by without problems so the tension on the political front has been reduced. This is the reason the market is performing well,” he commented.

Meanwhile, First National Equities Limited Director Amir Shehzad said political temperature that had increased after Thursday’s attack on Imran had “cooled down a bit”. Consequently, investors had regained confidence.

“Hopefully, things will remain in control in the future and … the market should perform better from here on,” he added.

On Friday, the index had tanked as soon as the opening bell rang and then kept losing ground throughout the day. The growing political conflict after the attack on Imran made investors shy away from the equity market and dried up volumes across the board.

Later that day, Finance Minister Dar told journalists that during Prime Minister Shehbaz Sharif’s recent visit to Beijing, the Chinese leadership promised to roll over $4bn in sovereign loans, refinance $3.3bn commercial bank loans and increase currency swap by about $1.45bn — from 30bn yuan to 40bn yuan. The total worked out at $8.75bn.

“They promised the security of financial support,” Dar said and quoted Chinese President Xi Jinping as telling Shehbaz, “don’t worry, we will not let you down.”

Responding to a question, he said Saudi Arabia had also “given a positive response” to Pakistan’s request for increasing its financing by another $3bn to $6bn and doubling its deferred oil facility of $1.2bn.