KARACHI: Pakistani stocks continued to extend losses on Tuesday, brokers said, despite an announcement a day earlier that Qatar would make $3 billion worth of new investments in Pakistan in the form of deposits and direct investments.
Following the latest investment pledge, the economic partnership between Qatar and Pakistan will reach $9 billion.
By midday Tuesday, Pakistani stocks were down 466 points, with weekly accumulated losses of 1119 points.
On Monday, too, the stock market declined by 653 points as “panic selling by investors over grim inflation and interest rate outlook and lack of positive triggers created a jittery atmosphere,” Muhammad Faizan Munshey, head of foreign institutional sales at Next Capital, said, adding that the news of the new Qatari investment had “failed to excite investors who preferred to exercise caution.”
The Oil and Gas Regulatory Authority has recommended major price hikes as part of prior-actions of an International Monetary Fund bailout agreed last month. The program, for a three-year, $6 billion rescue package, aims at shoring up Pakistan’s fragile public finances and strengthening a slowing economy.
Samiullah Tariq, Director Research at Arif Habib Limited, said investors were worried about the capabilities of the industrial sector and whether it would be able to withstand the impact of the gas price hike.
Analysts hope market sentiments will improve after the IMF executive board, scheduled to meet on July 3, gives its final approval to the loan program.
Ahead of a visit to Pakistan by the Emir of Qatar, Sheikh Tamim bin Hamad Al Thani, last weekend, media reported that $22 billion in investment deals would be signed between Islamabad and Doha. However, the Emir left after signing just three Memorandum of Understandings (MoUs) in the areas of trade and investment, tourism, and exchange of financial intelligence.
Pakistani Prime Minister Imran Khan’s government is seeking to stabilize its economy with loans from Gulf countries and international donors. Saudi Arabia earlier provided Pakistan with a $3 billion loan and a similar amount every year in oil supply on deferred payments. The United Arab Emirates also announced a $3 billion loan package.
Qatari $3billion investment pledge fails to lift Pakistani stocks
Qatari $3billion investment pledge fails to lift Pakistani stocks
- By midday Tuesday, stocks were down 466 points
- News of Qatari funding did not excite investors, brokers said
Pakistan’s annual inflation rises to 7% in February, statistics bureau says
- Pakistan’s stock exchange halted trading on Monday after falling more than 5 percent due to the volatility
- IMF has urged policymakers to remain data-dependent to anchor inflation expectations, rebuild buffers
ISLAMABAD: Pakistan’s annual inflation rate rose to 7 percent year-on-year in February, the statistics bureau said on Monday, with fears of commodity prices volatility after US and Israel strikes in Iran.
The consumer price index of annual inflation jumped from 5.8 percent the previous month, the bureau said.
On a month-on-month basis, inflation increased by 0.3 percent in February, down from a 0.4 percent rise the previous month.
Pakistan’s stock exchange halted trading on Monday after falling more than 5 percent due to the volatility.
The central bank, which held its policy rate at 10.50 percent in January, has said inflation could exceed its 5 percent to 7 percent medium-term target range for a few months this year, even as growth gains momentum and imports push the trade deficit wider.
The International Monetary Fund, which has cautioned against premature monetary easing under Pakistan’s $7 billion loan program, has urged policymakers to remain data-dependent to anchor inflation expectations and rebuild external buffers.
An IMF mission has started discussions with Pakistani authorities on the third review of the country’s Extended Fund Facility and the second review of its Resilience and Sustainability Facility.
