Pakistan stocks close at record high amid IMF talks, tensions in Middle East

In this photo, taken on December 29, 2023, workers interact outside the Pakistan Stock Exchange in Karachi. (AN Photo/File)
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Updated 19 April 2024
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Pakistan stocks close at record high amid IMF talks, tensions in Middle East

  • The benchmark KSE-100 index surged by 647 points after morning trading hiccups due to reports of Israel’s attack on Iran
  • Pakistani analysts say escalating tensions in Middle East will impact supply chain and increase import bill for Pakistan

KARACHI: Pakistan’s stock market recorded on Friday its highest-ever closing at 70,909 points, stock brokers and analysts said, attributing it to ongoing talks with the International Monetary Fund (IMF), but cautioning about potential economic impact of Israel-Iran tensions in the Middle East.

Explosions were heard in Iranian city of Isfahan on Friday that were described as an Israeli attack by western media. However, Tehran has not officially confirmed the development as its response remains muted.

The Pakistan Stock Exchange witnessed some nervousness in the morning trading session, when news of Israel’s attack on Iran came in. But despite the development, the benchmark KSE-100 index surged by 647 points to close at 70,909 points.

“When news of the attack on Iran came this morning, its impact was seen in the Asian and European markets at one point,” Shehryar Butt, portfolio manager at the Karachi-based Darson Securities, told Arab News.

“Nikkei saw a decline of more than a thousand points, but despite this, the Pakistan Stock Exchange performed much better.”

The Pakistani bourse has recently been trading at record highs amid positive sentiment prevailing among investors due to hopes of the country’s successful talks with the IMF.

“The basic reason for this is that Pakistan is currently in the IMF program, and very serious discussions are taking place in Washington at this time,” Butt said.

Pakistan’s finance minister, Muhammad Aurangzeb, is currently in Washington to hold talks with IMF officials for a new long-term loan program as Pakistan’s current $3 billion program is due to expire this month. The finance minister has expressed his hopes that the outline of the new program will be agreed next month.

Pakistan is expected to demand a loan size of around $7 billion but Jihad Azour, the IMF Middle East and Central Asia Director, said on Wednesday the reform package was more important than the size of the program.

“I would say the package of reform is now more important than the size of the program because we saw recently that the right measures provided the right response,” Azour said at a press briefing.

The surge in global oil prices amid geo political tensions and the Pakistani rupee’s recovery played “a catalyst role in Friday’s record close,” according to Ahsan Mehanti, CEO of the Arif Habib Corporation.

Though Pakistan’s market downplayed the Middle East tensions, but analysts said if the situation escalated, it would disrupt supply chain and impact Pakistan’s economy.

“The conflict between Iran and Israel will affect the Pakistani economy, quite a negative effect will be seen on the Pakistani economy because immediately after that, we saw geo-political situation worsening and oil started to rise,” Butt said, adding the rising global oil prices would impact Pakistan’s import bill.

Pakistan has imported petroleum products worth $12 billion during the July-March period of the current fiscal year, including $3.9 billion worth of crude oil and 2.9 billion worth of liquefied natural gas (LNG), according to official data.

Butt feared that if the situation persisted, then the attention of Saudi Arabia would also be drawn to the Middle East and the investment commitments made by the Kingdom with Pakistan could be delayed.

Haroon Sharif, an economist and former chairman of the Pakistan Board of Investment, said if the tensions in the Middle East escalated, their first impact would be on the stock market as foreign investors would like to shift their capital to safer markets.

“Another impact would be oil price escalation, hitting Pakistan’s trade deficit and traveling and cargo price would also escalate, increasing the cost of doing business,” Sharif said, adding that investors would hold their future expansion and investment plans till situation becomes stable.

Husain Haqqani, a former Pakistani ambassador to the United States and scholar at Washington DC’s Hudson Institute, said a prolonged conflict between Iran and Israel would increase uncertainty and instability across the Middle East.

“If Iran’s drone and missile attack on Israel was meant to show Iran’s reach, Israel has demonstrated its ability to strike deep inside Iran,” Haqqani told Arab News.

“Iran has several proxies that it can use while Israel has tremendous military and intelligence capabilities. Leaders of both countries have domestic political reasons to not be forgiving toward one another.”

Haqqani said the US would likely restrain Israel, while Iran would be constrained by its limited capability.

“After all, even after attacking with hundreds of missiles and drones, Iran was unable to cause real damage on ground in Israel,” he added.


Punjab administration orders shortened school hours due to looming heatwaves

Updated 17 May 2024
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Punjab administration orders shortened school hours due to looming heatwaves

  • A notification orders schools to ensure all fans are in working condition and water coolers available
  • Provincial government has also announced summer vacation for all schools from June 1 to August 14

ISLAMABAD: The provincial administration of Punjab announced on Friday it would cut short the usual timings of all public and private schools for the rest of the month amid rising temperatures and warnings from the Meteorological Department of impending heatwaves in the coming weeks.

Just a day earlier, the Met Department warned that a major heatwave was set to engulf much of the country next week, with daytime temperatures expected to rise four to six degrees Celsius above the average.

It also predicted dust storms and heavy rains in various parts of Pakistan, including Punjab.

“In the wake of severe weather, it is hereby notified that following School timings shall be observed in all Public and Private Schools in the Province of Punjab with effect from 18th May to 31st May, 2024,” said a notification circulated by the provincial education department, showing 7 AM as the starting time and 11:30 AM as the finishing hour.

It instructed the schools to end classes at 10:30 AM on Friday and Saturday.

The notification also instructed the school authorities to ensure that all fans were in working condition, water coolers were available and no student was made to sit in uncovered and open spaces like lawns in summer season.

Another notification also announced that all the schools in the province will remain closed from June 1 to August 14 for summer vacation.

“All schools in the province shall reopen with effect from Thursday 15th August, 2024,” it added.

In recent years, Pakistan has experienced extreme weather patterns, including unprecedented rains, flash floods, droughts and heatwaves.

Experts attribute these erratic weather patterns to climate change, placing Pakistan among the ten countries most vulnerable to its impacts.


Pakistan’s army chief vows full support for hockey team after silver medal win in Malaysia

Updated 17 May 2024
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Pakistan’s army chief vows full support for hockey team after silver medal win in Malaysia

  • The national hockey team reached the Sultan Azlan Shah Cup final for the first time in 13 years
  • The Pakistani players were also hosted and praised by Prime Minister Shehbaz Sharif this week

ISLAMABAD: Pakistan’s army chief General Asim Munir vowed on Friday to fully support the national hockey team while meeting with its players and applauding them for winning a silver medal in the recent Sultan Azlan Shah Cup in Malaysia.

A day earlier, Prime Minister Shehbaz Sharif also hosted the Green Shirts in Islamabad in recognition of their outstanding performance at the tournament, where they reached the finals for the first time in 13 years.

Sharif praised the team’s performance and reiterated his administration’s commitment to promoting sports, particularly hockey, in the country.

The army chief also praised the squad during the interaction with its players in Rawalpindi.

“The hockey team has brought immense pride to the nation, and we are committed to providing them with comprehensive support to ensure their continued success,” he was quoted as saying in a statement released by the military’s media wing, ISPR.

He also extended his best wishes to the players for their future endeavors.

Cricket has generally overshadowed other sports in Pakistan, including hockey, in terms of popularity and media attention.

This is despite the fact that hockey is the country’s national sport and has a rich history of international success. Yet, it has not received the same level of sustained interest or investment as cricket, with the disparity impacting its development and visibility within the country.


England captain Buttler buoyed by return of ‘superstar’ Archer ahead of Pakistan series

Updated 17 May 2024
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England captain Buttler buoyed by return of ‘superstar’ Archer ahead of Pakistan series

  • Injuries have blighted Jofra Archer and he has not played top-level cricket for the past year
  • Buttler says he relies on Archer who has a trick up his sleeve in every cricket tournament

LONDON: England white-ball captain Jos Buttler is glad to see “proper superstar” Jofra Archer back in action following the fast bowler’s wicket-taking return to action for Sussex’s 2nd XI.

Injuries have blighted Archer’s international career and he has not played top-level cricket for the past year.

England, however, have recalled Archer for the defense of their T20 World Cup title in the United States and the West Indies next month, with the paceman also selected for the upcoming warm-up series against Pakistan.

Archer continued his build-up to the four-game series against Pakistan by turning out for Sussex’s second string on Friday.

He was parachuted into the match on day four, taking the new ball and returning figures of 1-11 in six sharp overs in Kent’s second innings at Beckenham.

The 29-year-old, previously playing domestic cricket in his native Barbados, hit home opener Ekansh Singh on the helmet and then had him caught in the slips.

Archer will join the England squad in Leeds ahead of the first Twenty20 international against Pakistan at Headingley on Wednesday.

Buttler, who returned early from the Indian Premier League to oversee England’s World Cup preparations, told Britain’s Press Association news agency: “It’s a huge encouragement for him to be back and see him ready to play.

“Everyone knows what he is capable of and the attitude he possesses. As a captain he is someone you can always turn to in a game because he always has a trick up his sleeve.

“It’s great to be able to call on him but it’s important to manage expectations. He has been out of it for a while now so we will need to look after him and realize that it might just take him a little while to be the Jofra of 2019.”

Dynamic batsman Buttler added: “He is a proper superstar but we do have to be smart with him. It’s a jump in intensity from what he’s doing now to international cricket and you can’t really replicate it.”


Leading fintech outlines vision for affordable remittances for Pakistani users at Dubai summit

Updated 17 May 2024
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Leading fintech outlines vision for affordable remittances for Pakistani users at Dubai summit

  • Unencumbered by traditional banking infrastructure, top JazzCash official sees fintechs offering greater financial inclusion
  • Murtaza Ali says women already constitute 30 percent of JazzCash customers and 17 percent of its lending users

KARACHI: The top official of a leading Pakistani fintech told a summit in Dubai on Friday financial platforms offered by companies like his could boost remittances to the country, making these transfers more affordable and remotely accessible while making the platforms pivotal for millions of local households.

JazzCash, a mobile wallet and branchless banking service provided by a major telecom operator in Pakistan, was originally launched as “MobiCash” in 2012 before it was rebranded four years later.

Earlier this week, it announced a partnership with the United Arab Emirates-based financial service provider, du Pay, for smooth cross-border payments, saying the collaboration, powered by Western Union, would allow Pakistani nationals to send money directly to JazzCash mobile wallets.

According to a statement issued by the company, the JazzCash head, Murtaza Ali, spoke about the financial inclusion provided by fintech organizations while discussing their impact on the country’s economic landscape.

“Detached from traditional limitations like bank branches and agent networks, digital remittances can reach even remote, low-income households, empowering them to participate in the formal financial system,” he told the participants of the Dubai summit.

The Gulf nation hosts a vast Pakistani expatriate community and holds the distinction of being the second-largest contributor of remittances to Pakistan after Saudi Arabia, with $548 million transferred to the South Asian country in March.

Ali also revealed that women constituted 30 percent of JazzCash customers, 17 percent of lending users, 23,000 merchants and 6,000 agents.

“These encouraging numbers reflect the company’s ongoing commitment to enhancing female participation in its services,” he added.

The statement informed he also praised Pakistan’s central bank, telecom authority and financial regulatory agency for their collaborative approach that propelled digital and financial inclusion across the country.

“With a large unbanked population and a cash-dependent SME [small and medium enterprise] sector, we anticipate exponential growth,” it quoted Ali as saying. “Our roadmap involves leveraging data for risk assessment, venturing into Insurtech, and further integrating financial services into everyday transactions.”


Government says eight entities interested in Pakistan’s debt-ridden airlines amid privatization drive

Updated 17 May 2024
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Government says eight entities interested in Pakistan’s debt-ridden airlines amid privatization drive

  • The deadline for submitting expressions of interest to participate in PIA’s divestment ended at 4 PM on Friday
  • The Privatization Commission is now carrying out the pre-qualification process in line with the laid-out criteria

KARACHI: The Ministry of Privatization on Friday named eight business entities that have expressed interest in acquiring stakes in the state-owned Pakistan International Airlines (PIA) that has faced significant financial difficulties and repeatedly urged the government for bailouts in recent years.

Pakistan agreed to overhaul its public sector entities under a $3 billion short-term loan package it signed with the International Monetary Fund (IMF) last year to avert a sovereign debt default.

The IMF recommended the government privatize the state-owned enterprises (SOEs) whose losses were burning a hole in the country’s finances amid its already precarious economic situation.

According to the ministry, the deadline for submitting expressions of interest to participate in PIA’s divestment process ended at 4 PM today.

“In response to the Invitation of Expression of Interest (EoI), for Divestment of Pakistan International Airlines Corporation Limited (PIACL), published advertisement in leading national and international newspapers on 2nd & 3rd April, 2024, Privatization Commission has received Statement of Qualifications from (1) Fly Jinnah, (2) Air Blue Limited, (3) Arif Habib Corporation Limited, (4) Sardar Ashraf D. Baluch – SHANXI CIG Co. Ltd. (China), (5) Gerry’s International (Private) Limited, (6) Consortium Lead by Y.B. Holdings (Private) Limited, (7) Consortium Lead by Pak Ethanol and (8) Consortium Lead by Blue World City,” it announced.

“Privatization Commission will now carry out the pre-qualification process in line with the criteria laid down in the RSOQs [Requests for Statement of Qualification], under the PC Ordinance 2000 and rules & regulations framed thereunder,” it continued. “Accordingly, the pre-qualified parties will be invited for the next stage of bidding process.”

The privatization of SOEs is proving to be a challenging process. Prime Minister Shehbaz Sharif stated earlier this week his government would not sell public entities it deemed “strategically important.”

Prior to this, the newly appointed Deputy Prime Minister Ishaq Dar, while chairing a meeting of the Cabinet Committee on Privatization, affirmed the government would continue to retain essential or strategic SOEs.

Contrasting these views, Finance Minister Muhammad Aurangzeb, who is negotiating with the IMF for a fresh loan, declared that there was “no such thing as a strategic” public entity, indicating his intent to keep the privatization process comprehensive.