Pakistan’s KSE-100 benchmark index (PSX) gained more than 1,200 points in intraday trading to cross the 45,000-point mark on Monday, backed by cabinet approval to revive Saudi $ 3 billion support package Arabia for Pakistan in safe deposits and $ 1.2 billion. value of oil supplies on deferred payments.
The reference KSE-100 index rose 1,297.86 points or 2.94 percent at 3:12 pm.
Salman Naqvi, head of research at Aba Ali Habib Securities, said Dawn.com the expectation of receiving funding from the International Monetary Fund (IMF) following the personnel-level agreement last week, imminent Saudi Arabian deposits – expected to be received in a day or two – as well as a major dip in crude oil prices were positive triggers.
“The reduction in crude oil prices is expected to continue, which will help us reduce our current account deficit as well as inflation and reduce the continuing pressure on rupee,” he added.
Meanwhile, trader Zafar Moti said foreign inflow with attractive tariffs after Pakistan’s downgrade from the emerging market (EM) index to the border market (FM) index was behind today’s growth.
“Foreign finance is buying at low rates, which is why the market is growing at a healthy volume after several weeks,” he said.
“It is expected that stocks can now start a new one [upward] rally after money from Saudi Arabia is received. After a long time, most of the companies are in the green, which boosts investment confidence. “
The market closed at 44,114.16 points last week. Bulls overpowered the bears on Friday after four consecutive days of index declines in the Pakistan Stock Exchange.
On Saturday, the federal cabinet approved a couple of summaries related to the Arabian support package.
A summary drafted by the Finance Division noted that after the draft of the deposit agreement between the two countries was checked and cleared by the Ministry of Law as well as the Office of the Attorney General for Pakistan, it was sent to the Prime Minister.
The summary, a copy of which is available with Dawn.com, noted that the prime minister, “considering the urgency of easing the current pressures on the exchange rate,” approved its placement in front of the cabinet. The summary stated that the one-year agreement will carry an annual profit rate of 4pc.
A separate summary drafted by the Ministry of Economic Affairs belonged to the oil facility amounting to $ 100 million a month for a year, which it said can also be extended for another year with mutual consent. It noted that the terms of funding include a purchase price from the Saudi Development Fund (SFD) along with a margin of 3.80pc.
Later in the day, the cabinet ratified both summaries.
The resuscitation of both the depot as well as the oil facility was agreed during Prime Minister Imran Khan’s visit to the kingdom in October.