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Saudi investment and falling inflation cause Pakistani stocks to soar.

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7 months ago

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The benchmark KSE-100 Index increased by more than 1.50 percent on Monday, driven by the possibility of significant Saudi investment. Investors are now more optimistic that the central bank will soon begin a cycle of interest rate cuts, and another IMF programme is very much on the horizon.

The KSE-100 Index increased by 910.25 points, or 1.27 percent, by 1:29 pm PST to close at 72,812.34, having reached an intraday high of 73,060.74.

Additionally, on Monday, Ibrahim Al Mubarak, the deputy minister of investments for Saudi Arabia, stated that his nation preferred Pakistan’s economic growth and thought it was the best place to make investments.

The news is definitely good for equities that have been cheap since their market capitalization peaked in 2017, as many industries—energy, agriculture, technology, and mining being the primary ones—can now attract much-needed foreign investment.

The inflation of Pakistan

The consumer price index (CPI) for April increased by 17.3 percent, the lowest level since May 2022. This led to the benchmark index rising by 1244.45 points, or 1.76 percent, during the last session on Friday of last week.

This indicates that, like in March, annual inflation declined for the fourth straight month in April and stayed below the current record high interest rates of 22 percent. like a result, the State Bank of Pakistan may decide to begin reducing interest rates at its upcoming meeting on June 10.

While the pattern seen on Friday was also influenced by a market correction, the persistence of this most recent upswing indicates that investors are anticipating an economic recovery in the context of falling inflation and impending Saudi Arabian investment.

IMF APPEAL

In the meantime, the IMF continues to play a significant role in Pakistan, influencing not just public policy but also private sector initiatives and the lives of common citizens. Furthermore, the market was undoubtedly helped by the world’s largest lender’s most recent announcement of the upcoming transaction negotiations.

The Bretton Woods Institution said on Sunday that a delegation was scheduled to visit Pakistan this month to talk about a new initiative, prior to Islamabad starting the annual budget-making process for the upcoming fiscal year.

Although Pakistan’s $3 billion short-term programme helped prevent a sovereign default last month, Prime Minister Shehbaz Sharif’s administration has emphasised the necessity for a new, longer-term initiative.

The IMF responded to Reuters via email, saying that a mission is anticipated to visit Pakistan in May to review the FY25 budget, policies, and reforms under a proposed new programme for the wellbeing of all Pakistanis.

MERCURABLE BY SAMPLE

Meanwhile, it has been claimed that Saudi Crown Prince Mohammed bin Salman would pay a visit to Pakistan later this month. The kingdom has been making massive investments all over the world in an effort to become a more significant player in world affairs.

It makes sense that after years of political unrest and economic hardship, his presence and the Saudi investment will aid Pakistan in establishing itself as a desirable location for investors.

The explanation is straightforward: Saudi Arabia continues to be a significant actor in world politics. Nonetheless, the globe has begun to view MBS, the crown prince’s nickname, as a role model due to his policies of diversifying his nation’s economy and elevating the kingdom to a centre of commerce.

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Business

ADB Introduces ‘Glaciers To Farms’ Initiative to Address Food Security

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Notwithstanding the devastating effects of rapid glacial melt brought on by climate change, the Asian Development Bank has introduced a new regional initiative called “glaciers to farms” that would support sustainable water usage and food security in Pakistan, the South Caucasus, and Central Asia.

The bank will carry out risk assessments of glacial melt in Azerbaijan, the Kyrgyz Republic, Tajikistan, and Uzbekistan with assistance from the Green Climate Fund’s Project preparation facility. This will serve as the scientific and technical foundation for the program that converts glaciers into farms.

Since the region’s temperatures are expected to climb by as much as 6 degrees Celsius by 2100, the loss of glacier mass puts the delicate ecosystem balance in jeopardy, endangering the water supply for hydropower and agriculture as well as the livelihoods of over 380 million people.

Up to 3.5 billion dollars from ADB, GCF, governments, development partners, and the private sector are anticipated to be mobilised for Glaciers to Farms, contingent upon board approvals from participating institutions.

The program will provide assistance to populations at risk from glacial melt, especially in mountainous areas, in addition to investments in agriculture and water.

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Dar chairs the CCOP meeting; Blue World’s bid offer of Rs.10 billion is rejected.

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3 days ago

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The Foreign Minister/Deputy Prime Minister chaired the Cabinet Committee on Privatization meeting.

Other committee members who attended the conference included the Federal Secretaries of several Divisions, the Ministers of Finance and Revenue, Industry and Food, Commerce, Power, and Privatization.

The CCOP took the PC Board’s recommendation into consideration and suggested that Blue World’s bid of 10 billion rupees for the sale of 60% of PIACL’s shares be rejected. The bid was rejected by the CCOP, who chose to follow the PC Board’s advice.

The government’s determination to sell out PIACL through government-to-government or privatization was reaffirmed by the CCOP.

The CCOP was pleased with the Aviation Division’s evaluation of PIACL’s sound financial standing.

Additionally, the CCOP established a committee, chaired by the Minister of State for Finance, to assess potential transaction possibilities for the privatization of the Roosevelt Hotel and the appropriate modes of adoption in light of existing legal rules.

Prior to its subsequent meeting, the CCOP also ordered that all difficulties be resolved and an agreement for the selling of services to an international hotel be concluded.

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The KSE-100 Index has surged by 790 points, resulting in an all-time peak for the stock exchange.

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The benchmark KSE-100 Index increased by 790 points, marking a new all-time high for the Pakistan Stock Exchange (PSX) at 94,982 points.

The record-breaking performance underscores a surge of optimism and investor confidence in the stock market.

As investors responded to favorable economic signals, the market experienced a significant increase of over 500 points in early trading. Later, the KSE-100 Index reached another record level of 94,786 points after adding 594 points to its upward trajectory.

This positive development comes as the State Bank of Pakistan’s (SBP) foreign exchange reserves saw an increase of $84 million, reaching $11.26 billion during the week ending November 8, according to data released by the central bank on Thursday.

This represents an increase of 0.75% from the previous week. In addition, the nation’s total liquid foreign reserves experienced a modest increase, increasing by $33.7 million or 0.21% week-on-week to $15.97 billion.

In contrast, commercial banks’ reserves experienced a decline of $50.3 million or 1.06%, ultimately settling at $4.71 billion.

Furthermore, the economic team of Pakistan has expressed confidence in the discussions with the International Monetary Fund (IMF). Minister of State for Finance Ali Pervaiz Malik, in an exclusive conversation with Samaa TV, claimed talks were moving in a positive direction.

Highlighting improvements in Pakistan’s economic conditions, Malik noted substantial progress over the past six months to a year. He emphasized that Pakistan’s current economic situation has seen significant enhancement, with a reduced current account deficit of only $100 million in the first quarter, a reflection of the government’s strategy to increase remittances and boost exports.

Malik shared that discussions with the IMF are primarily focused on external financing, and while there have been speculations about a potential mini-budget or an increase in the petroleum levy, he clarified that these are currently premature considerations.

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