KARACHI: The chairman of Pakistan’s stock exchange said on Thursday a Rs20 billion emergency fund approved by the government to stabilize the bourse would operate on the same lines as a 2008 fund with a “successful track record.”
The finance ministry said on Thursday the Economic Coordination Committee (ECC) of the Cabinet, a top decision-making body headed by de facto finance minister Abdul Hafeez Shaikh, had given the green light for the fund to help boost the stock market after big losses over the past two years
The Pakistani stock market’s benchmark 100-Share Index has lost almost a third of its value since hitting an all-time high of 53,127 points in May 2017. Media has reported that Shaikh approved the emergency fund on May 17 after a meeting with a Pakistan Stock Exchange delegation in Karachi.
The finance ministry has not explained how the fund will work but officials with knowledge of the matter said it would be similar to the one that helped stabilize the market after the 2008 financial crisis and would be put together with contributions from banks and insurance firms to buy stocks through a state-owned asset management company.
“In fact no new fund has been created as this fund already existed,” Sulaiman S. Mehdi, Chairman of the Pakistan Stock Exchange Limited (PSX), told Arab News. “The previously launched fund had a very successful track record. This fund will operate in the same way. Where it finds opportunities and valuation attractive, it will step in and buy with a long term view.”
“In order to stabilize the stock market of the country, the ECC approved the proposal of Finance Division authorizing Government of Pakistan to issue sovereign guarantee amounting to Rs20 billion for investment in National Investment Trust (NIT)-State Enterprise Fund,” the finance ministry said.
With 49 percent returns in 2012, the Pakistan Stock Exchange was one of the five best performing markets in the world. In 2013, the 100 stock index rose 38 percent in US dollar terms, making it the 10th best performing stock market in the world.
In the last two years, however, the market has been hammered because of a weakening economy that has seen growth slump amid a blow-out of the fiscal and current account deficits, leading to a provisional agreement with the International Monetary Fund for a $6 billion bailout last month.
“Following months of bloodbath at the bourse, the government and the Securities and Exchange Commission of Pakistan SECP granted approval to the National Investment Trust Limited [NIT] to launch a State Enterprise Fund (SEF) on 13th January 2009 to support the index and invest in select government-owned stocks,” Samiullah Tariq, head of research at Arif Habib Limited, said, explaining the last bailout.
A total of Rs15.25 billion was allotted to the open-ended fund, Tariq said, formed under a trust deed between NIT as the managing company and the Central Depository Company of Pakistan Limited (CDC) as a trustee. Investment was allocated to eight stocks.
“In percentage terms, 52 percent allocation was made in exploration and production companies, 19 percent in oil and gas marketing companies, 18 percent in banks, seven percent in telecommunication and four percent in power. This translated into robust performance in the aforementioned stocks,” a research report by Arif Habib Limited said.
The stock market’s recent slide also follows this month’s agreement in principle with the International Monetary Fund for a $6 billion loan, after which the rupee currency has dropped around five percent against the dollar.
The IMF accord, which must still be approved by the Fund’s board, foresees a “market-determined” rate for the rupee. At present, the currency — which many analysts consider overvalued — is managed by the central bank in a de facto controlled float.
The sliding rupee has caused alarm in Pakistan, which is already facing inflation likely to average over 7 percent for the year and surging costs for fuel and power, which are both heavily influenced by the dollar exchange rate.
Pakistan stock exchange chief says market bailout fund has ‘successful track record’
Pakistan stock exchange chief says market bailout fund has ‘successful track record’
- Government approves Rs20 billion fund to boost stock market after big losses over the past two years
- Fund expected to operate in a similar manner as one formed after the 2008 financial crisis
Pakistan urges world to treat water insecurity as global risk, flags India treaty suspension
- Pakistan says it is strengthening water management but national action alone is insufficient
- India unilaterally suspended Indus Waters Treaty last year, leading to irregular river flows
ISLAMABAD: Pakistan on Tuesday urged the international community to recognize water insecurity as a “systemic global risk,” warning that disruptions in shared river basins threaten food security, livelihoods and regional stability, as it criticized India’s handling of transboundary water flows.
The call comes amid heightened tensions after India’s unilateral decision last year to hold the 1960 Indus Waters Treaty “in abeyance,” a move Islamabad says has undermined predictability in river flows and compounded climate-driven vulnerabilities downstream.
“Across regions, water insecurity has become a systemic risk, affecting food production, energy systems, public health, livelihoods and human security,” Pakistan’s Acting Permanent Representative to the United Nations, Ambassador Usman Jadoon, told a UN policy roundtable on global water stress.
“For Pakistan, this is a lived reality,” he said, describing the country as a climate-vulnerable, lower-riparian state facing floods, droughts, accelerated glacier melt, groundwater depletion and rapid population growth, all of which are placing strain on already stressed water systems.
Jadoon said Pakistan was strengthening water resilience through integrated planning, flood protection, irrigation rehabilitation, groundwater replenishment and ecosystem restoration, including initiatives such as Living Indus and Recharge Pakistan, but warned that domestic measures alone were insufficient.
He noted the Indus River Basin sustains one of the world’s largest contiguous irrigation systems, provides more than 80 percent of Pakistan’s agricultural water needs and supports the livelihoods of over 240 million people.
The Pakistani diplomat said the Indus Waters Treaty had for decades provided a framework for equitable water management, but India’s decision to suspend its operation, followed by unannounced flow disruptions and the withholding of hydrological data, had created an unprecedented challenge for Pakistan’s water security.
Pakistan has said the treaty remains legally binding and does not permit unilateral suspension or modification.
The issue has gained urgency as Pakistan continues to recover from last year’s monsoon floods, which killed more than 1,000 people and devastated farmland in Punjab, the country’s eastern breadbasket, in what officials described as severe riverine flooding.
Last month, Deputy Prime Minister Ishaq Dar said Pakistan had observed abrupt variations in river flows from India, creating uncertainty for farmers in Punjab during critical periods of the agricultural cycle.
“As we move toward the 2026 UN Water Conference, Pakistan believes the process must acknowledge water insecurity as a systemic global risk, place cooperation and respect for international water law at the center of shared water governance, and ensure that commitments translate into real protection for vulnerable downstream communities,” Jadoon said.
