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Pakistani stocks surge sharply on IMF optimism, hopes of easing India-Pakistan standoff

A stockbroker monitors share prices on a digital screen at the Pakistan Stock Exchange (PSX) in Karachi on May 7, 2025, amid the ongoing border tensions. (AFP)
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Updated 11 May 2025
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Pakistani stocks surge sharply on IMF optimism, hopes of easing India-Pakistan standoff

  • The benchmark KSE-100 index rose 3,647.82 points, or 3.52 percent, to close at 107,541.45
  • India-Pakistan tensions triggered about 12 percent market decline between April 23 and May 8
Updated 11 May 2025
Ismail Dilawar

KARACHI: The Pakistan Stock Exchange (PSX) rebounded sharply on Friday, climbing over 3,500 points, as investor sentiment improved ahead of an International Monetary Fund (IMF) Executive Board meeting and what some analysts described as easing tensions between Pakistan and India.

The benchmark KSE-100 index recovered 3,647.82 points, or 3.52 percent, closing at 107,541.45, after a historic plunge of 6,482 points on Thursday, the largest single-day drop in the index’s history, triggered by fears of an escalating conflict between the two nuclear-armed neighbors.

"The recovery was on account of optimism on IMF Executive Board meeting scheduled to consider Extended Fund Facility (EFF) program, where market expects smooth approval," Topline Market Review said after the end of trading. "Overall decline in cross border hostilities also provided stimulus to investor sentiment."

The EFF, a $7 billion loan program secured by Pakistan in September last year, is aimed at stabilizing the country's economy through structural reforms and fiscal consolidation.

While Pakistan’s authorities say macroeconomic indicators have improved in recent months, they view the IMF support as critical for sustaining gains and transitioning toward growth.

Some analysts also linked the improved investor confidence to what they described as a gradually easing geopolitical situation between India and Pakistan.

"Stocks staged sharp recovery as investor eye de-escalation in Pakistan-India tensions after US appeal for end to violence," Ahsan Mehanti, the Chief Executive Officer of Arif Habib Commodities, told Arab News.

Raza Jafri, the head of Intermarket Securities, said any de-escalation could extend the positive stock market trend.

"Institutional value buying, especially in blue-chip high dividend yielding stocks, saw the KSE100 rebound today," he added.

Tensions between India and Pakistan spiked this week after New Delhi launched missile strikes on multiple locations in Pakistan, blaming Islamabad for a deadly April 22 attack in Indian-administered Kashmir that killed 26 tourists. Pakistan has denied involvement.

The crisis triggered a 12 percent decline in the Pakistani market from April 23 to May 8.

The geopolitical unrest posed a major challenge for Prime Minister Shehbaz Sharif’s efforts to stabilize the economy, which depends on a number of factors including increased foreign investment, exports and revenue generation.

Topics: Pakistan Stock Exchange PSX IMF

’My son keeps crying’: Pakistani families left in medical crisis as India cancels visas amid conflict

Updated 6 sec ago
Reuters
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’My son keeps crying’: Pakistani families left in medical crisis as India cancels visas amid conflict

  • India, Pakistan hold a fragile, US-brokered truce after nearly three weeks of tensions that took South Asia to the brink of war
  • Despite the ceasefire, punitive measures announced by India, such as trade suspension and visa cancelations, remain in place
Updated 6 sec ago
Reuters

LAHORE/KARACHI/ISLAMABAD: As Musfira, a seemingly healthy one-and-a-half-year-old girl, plays with the toys on the floor, her mother Salsabeel Safi, 22, tries to catch her attention with a wooden toy car that has watermelon wheels.

It’s a typical picture of a mother playing with her daughter, except they are facing a medical crisis after India canceled most valid visas, including medical visas, issued to Pakistani nationals amid rising tensions between the two nuclear rivals.

“We had applied for an Indian visa in December. It has been four months now, but we didn’t get a visa. Because of the Pakistan-Indian situation our visa has been stopped,” said Safi.

Musfira has no veins between her heart and lungs and her arteries are so severely constricted that she has very poor blood circulation, said Safi. Her heart also has a hole in it. As a result, Musfira’s mother says she frequently turns blue and has to be hospitalized due to insufficient oxygen in her body.

The family has sought help at several hospitals in Pakistan, but was told that the little girl’s condition could not be treated in the country. At the suggestion of doctors they consulted in Pakistan, the family decided to seek surgical intervention in India.

While treatment options for Musfira’s condition are available in other countries, the family felt India was the best choice due to its proximity and affordable health care. They could even travel there by car.

Once she learnt that treatment would cost an estimated $10,000, Safi, who’s a content creator on social media, started raising funds online.

Last December, Musfira’s family applied for their visas after an Indian hospital invited them to seek treatment there, but they were soundly rejected.

“Her condition is deteriorating,” said Safi.

Many Pakistani families have found themselves in the same predicament as India and Pakistan continue to hold a fragile US-brokered ceasefire after nearly three weeks of escalating tensions that took South Asia to the brink of war.

Mohammad Imran and his wife, Nabeela Raaz, an Indian national, traveled from Karachi to India with their 17-year-old son, Mohammad Ayan, who suffers from a spine injury on March 27. When India revoked most visas for Pakistani nationals in late April, they returned to Pakistan on April 27 before Ayan could receive any treatment. Ayan’s mother was not allowed to accompany them back to Pakistan.

“My son keeps crying,” said Imran. “Even I cry at times when my son says, ‘Please call mama here’. I can’t see her coming here anytime soon.”

In Islamabad, Shahid Ali said his two children who suffer from heart disease were forced to return to Pakistan without getting the surgery they desperately needed.

“The Pahalgam incident took place and the Indian government ordered the cancelation of visas in 24 hours,” said Ali.

On April 22, 26 men were killed in an attack targeting Hindus in Pahalgam in Indian-administered Kashmir. It was the worst attack on civilians in India since the 2008 Mumbai shootings.

The next day, India pulled out of the 1960 Indus Water Treaty regulating the sharing of water from the river and its tributaries with Pakistan.

India also identified two of the three suspected militants in the Pahalgam attack as Pakistanis, although Islamabad denied any role.

On May 7, India launched attacks on what it said were “terrorist camps” in Pakistan, including Azad Kashmir.

Strikes and counter-strikes and a slew of tit-for-tat reprisals followed before US diplomacy and pressure helped the two nations agree to a “full and immediate ceasefire” on May 10.

Despite the truce, punitive measures announced by India, such as trade suspension and visa cancelations, remain in place, according to Indian government sources who spoke to Reuters.

For the families of these Pakistani children, some of whom are hanging on by the thinnest thread, a solution to the latest chaos cannot come sooner.

“We want India and Pakistan to resolve issues between them so that Musfira and several other children like her, whose treatment is due in India, can get visas and get treatment there,” said Musfira’s uncle, Zulkifl Haroon. “So that their lives can be saved.”

Topics: Pakistan India Ties Ceasefire

Pakistan cuts diesel rate, maintains petrol price for next fortnight

Updated 26 min 52 sec ago
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Pakistan cuts diesel rate, maintains petrol price for next fortnight

  • Diesel powers heavy vehicles used to transport goods, while petrol is used for private transportation
  • Islamabad regulates petroleum prices on a fortnightly basis to reflect import costs in consumer prices
Updated 26 min 52 sec ago
Ismail Dilawar

KARACHI: The Pakistani government has maintained the price of petrol and slashed the rate of high-speed diesel by Rs2 per liter, the Finance Division said on Friday.

Petrol is primarily used in Pakistan for private transportation, including small vehicles, rickshaws and two-wheelers. Diesel, on the other hand, powers heavy vehicles used for transporting goods across the country.

After the latest revision, a liter of diesel will cost Rs254.64, while that of petrol will continue to sell for Rs252.63, according to a notification issued by the Finance Division.

“The government has decided the following prices of petroleum products for the fortnight starting today, based on the recommendations of OGRA (Oil and Gas Regulatory Authority) and the relevant ministries,” it read.

Fuel prices in Pakistan are reviewed and adjusted on a fortnightly basis. This mechanism ensures that changes in import costs are reflected in consumer prices, helping to sustain the country’s fuel supply chain.

The new price of diesel has already taken effect.

Topics: petrol diesel Pakistan petrol prices

‘Great moment’: Pakistan observes ‘Day of Gratitude’ to honor nation’s response to Indian strikes

Updated 56 min 36 sec ago
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‘Great moment’: Pakistan observes ‘Day of Gratitude’ to honor nation’s response to Indian strikes

  • India struck several Pakistani cities with missiles on May 7 amid heightened tensions over an attack in Indian-administered Kashmir last month
  • Pakistan said it downed six Indian fighter jets, including three French-made Rafales, in response, a claim India has not yet officially confirmed
Updated 56 min 36 sec ago
KASHIF IMRAN

ISLAMABAD: Pakistanis are observing a ‘Day of Gratitude’ today, Friday, to honor a response by armed forces and the public to this month’s Indian strikes against Pakistan, with President Asif Ali Zardari describing it as “great moment.”

India struck several Pakistani cities with missiles on May 7 amid heightened tensions over an attack last month in Indian-administered Kashmir. Pakistan said it immediately responded to Indian strikes and downed six Indian fighter jets, including three French-made Rafales.

India has not officially confirmed the downing of jets, but its air force chief this week told a news conference in New Delhi that “losses are a part of combat.” Both neighbors traded air, missile, drone and artillery fire for four days before the United States brokered a ceasefire on May 10.

In his message on the Day of Gratitude, President Zardari said the success of ‘Operation Bunyan-um-Marsoos’ against India belongs to both the armed forces and the entire Pakistani nation, who stood like an iron wall against “enemy aggression.”

“I am proud of our Armed forces who responded to Indian provocation with precision, professionalism, and strength. I am glad that the world witnessed and acknowledged Pakistan’s patience and restraint as well as the operational effectiveness that compelled the enemy to cease its aggression. We stood firm. We stood united. And we emerged victorious with dignity,” he said in a statement.

“Pakistan is a peace-loving country and does not harbor aggressive design against any country. However, let there be no doubt: Pakistan will never compromise on its sovereignty, territorial integrity, or its core national interests. Any aggression against our homeland will be met with full force.”

On Friday morning, a 31-gun salute was held in the federal capital of Islamabad and 21-gun salutes in provincial capitals. Several rallies, gatherings, events and visits to national memorials are expected to held, mainly after Friday prayers, across the South Asian country. Public and private institutions will hold commemorative programs as well.

India and Pakistan, both bitter rivals who possess nuclear weapons, have fought three wars since 1947 after gaining independence from British colonial India. The root cause of their conflict is the disputed Himalayan region of Kashmir, which they both claim in full but rule only in part.

This month’s military conflict between the rivals was also triggered by an attack by gunmen on tourists in Indian-administered Kashmir’s Pahalgam town, which killed 26 people on April 22. India blamed the attack on Pakistan. Islamabad denies the charge and has called for a credible, international probe into it.

On Thursday, Pakistan Prime Minister Shehbaz Sharif, accompanied by Army Chief General Asim Munir and senior members of the cabinet, visited Pakistan Air Force (PAF) base Kamra to laud Pakistani pilots for successfully defending the country, hours after Deputy Prime Minister Ishaq Dar informed lawmakers in parliament that the ceasefire agreement between Islamabad and Delhi has been extended till Sunday.

“For now, these are military-to-military communications, so obviously, then political dialogue will take place,” he said. “The resolution of all issues lies there.”

Also on Thursday, India’s Foreign Minister Subrahmanyam Jaishankar said a key water treaty, which governs river water critical to parched Pakistan for consumption and agriculture, would remain suspended until “cross-border terrorism by Pakistan is credibly and irrevocably stopped.” New Delhi suspended the treaty a day after the April 22 attack.

Dar responded by calling the treaty “a no-go area.”

“The treaty can’t be amended, nor can it be terminated by any party unless both agree,” he told parliament.

Militants have stepped up operations on the Indian side of disputed Kashmir region since 2019, when Prime Minister Narendra Modi’s Hindu nationalist government revoked the region’s limited autonomy and imposed direct rule from New Delhi.
 

Topics: Ceasefire Pakistan India Ties Day of Gratitude

Back on the pitch: Pakistan Super League resumes after conflict-forced suspension

Updated 16 May 2025
AP
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Back on the pitch: Pakistan Super League resumes after conflict-forced suspension

  • The Pakistan Super League was suspended on May 9 but last weekend Pakistan and India agreed to a ceasefire
  • The Indian Premier League, also suspended due to the outbreak between the countries, will also resume this weekend
Updated 16 May 2025
AP

ISLAMABAD: Pakistan’s premier Twenty20 cricket tournament resumes Saturday after a ceasefire between India and Pakistan was achieved. There will be a handful of foreign players returning for the remaining eight games.

The Pakistan Super League was suspended on May 9 but last weekend Pakistan and India agreed to a ceasefire after talks to defuse their most serious military confrontation in decades.

The Indian Premier League, also suspended due to the outbreak between the countries, will also resume this weekend.

PSL organizers first proposed moving the tournament to Dubai but later decided to postpone it after foreign players were reluctant to participate in the tournament due to security concerns. Around 43 foreign cricketers — competing on six PSL teams — were flown out of Pakistan from an air base in Rawalpindi.

Rawalpindi will host the remaining four league matches between May 17-19 before Lahore hosts the playoffs from May 21, including the final at Qaddafi Stadium on May 25.

Zimbabwean all-rounder Sikander Raza is among some of foreign players who have returned to Pakistan. Raza, who plays for Lahore Qalandars, is available for Lahore’s crucial last league game against Peshawar Zalmi on Sunday before he flies to England for test duty starting next week.

Raza will not be available for Lahore if the two-time champions qualify for the playoffs due to his test commitments.

He said that if the PSL resumed, he planned to return to Pakistan, even for just one match.

“I was very clear in my head that I was always going to go back,” Raza told The Associated Press as he trained with his teammates at Islamabad Club ground on Thursday.

“This PSL is not just about winning a trophy, there’s a lot more to it. All the overseas (players) that have come back, whether they’re in Pakistan or India, I think credit must be given to them because cricket unites and the whole purpose of sports all around the world is to unite cultures, countries.”

Lahore will also have Sri Lanka batter Bhanuka Rajapaksa and Bangladesh all-rounder Shakib Al Hasan for its must-win last league game against the Babar Azam-led Peshawar side after Tom Curran and Daryl Mitchel were ruled out due to injuries.

Raza said it was tough for the families of all the players living abroad after there was escalation at the borders.

“Whether it’s Pakistan or India, what happened was tough for everybody,” Raza said. “Sometimes when you’re on the ground, things may not be as bad, but (for) people back home watching TV, sometimes it’s very hard to control what media tells you.”

Lahore team director Sameen Rana said it was important that the PSL returns to finish the season.

“There’s a lot of uncertainty and the conditions which were happening on the ground was not the best, it’s unfortunate,” Rana said. “But from our perspective . . . the important thing is that the PSL is resuming, and that’s what matters.”

Defending champions Islamabad United has brought in Alex Hales of England and Rassie van Dussen of South Africa after initially picking both of them in the supplementary draft while Ben Dwarshuis of Australia is flying back to rejoin the team.

Islamabad, the three-time PSL champions, won five games in a row at the start of the season before four successive defeats.

Finn Allen of New Zealand and Rilee Rossouw of South Africa are rejoining first-place Quetta Gladiators, who have 13 points, three points ahead of Karachi and Islamabad.

Karachi is expecting to have its captain David Warner back from Australia in time to lead the team against Peshawar on Saturday.

Topics: Pakistan Super League (PSL) PSL X

IMF may disburse first tranche of climate loan to Pakistan in ‘about six months’

Updated 16 May 2025
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IMF may disburse first tranche of climate loan to Pakistan in ‘about six months’

  • Lender to approve first climate loan payment with the second review of Pakistan’s External Fund Facility program, says source
  • Pakistan’s finance adviser says loan, linked to implementation of key performance indicators, to be released over next 28 months
Updated 16 May 2025
Ismail Dilawar

KARACHI: The International Monetary Fund (IMF) is likely to release the first tranche of its $1.4 billion climate resilience loan for Pakistan “in about six months,” a source with direct knowledge of the development told Arab News on Thursday. 

The IMF last Friday approved a fresh $1.4 billion loan to Pakistan under its climate resilience fund and approved the first review of its $7 billion External Fund Facility program, freeing about $1 billion in cash.

The Washington-based lender is expected to start the Resilience and Sustainability Facility (RSF) funding for Pakistan along with its second review of Islamabad’s EFF program, the source disclosed on condition of anonymity as they are not authorized to speak to media on the matter. 

“With the second review of the EFF, if the [IMF] board approves then they [Pakistan] might get the first tranche of the RSF, ” the source said, adding that the next EFF review is expected to take place “in about six months.”

“For climate financing, nothing will be disbursed now,” they added. 

Pakistan’s finance adviser Khurram Schehzad said the climate loan is not a “one-off payment.”

“The RSF fund will be released gradually over the next 28 months, which is linked to the implementation of 13 KPIs (key performance indicators),” the official told Arab News.

He did not elaborate how much the global lender would release as part of the first tranche.

The RSF will support Pakistan’s efforts in building economic resilience to climate vulnerabilities and natural disasters. The South Asian country has been consistently ranked as one of the worst affected countries due to climate change effects. 

In 2022, Pakistan was devastated by flash floods triggered by unusually heavy rains and the melting of glaciers. The catastrophe killed 1,700 people, displaced more than 30 million others and damaged crops and infrastructure worth $30 billion.

That forced Pakistan last year to request the IMF for the RSF fund to address its vulnerability to climate change.

The IMF on May 9 approved the much-awaited climate loan for Pakistan and disbursed the $1.02 billion as its first tranche under the EFF program on May 13.

The Washington-based lender is scheduled to hold its second EFF review of Pakistan’s economic performance on Sept. 15, Sana Tawfik, the head of research at Arif Habib Ltd., said, citing the IMF’s Pakistan Country Report 2024.

When asked if the next IMF review will be delayed, the source replied in the negative. 

The RSF funds are crucial for Pakistan as its dwindling foreign exchange reserves rose to $10.3 billion last week. This amount does not meet the IMF’s three-month import cover threshold requirement.

In its monetary policy statement on May 5, Pakistan’s central bank said delays in the realization of official inflows coupled with “large debt repayments” weakened net financial inflows into the country till March.

Pakistan, which narrowly averted a sovereign default in 2023 after a last-gasp IMF bailout package, owed about $26 billion debt repayments this year ending June. While most of its foreign debt has been repaid, the country still relies heavily on the IMF’s funds to keep its balance of payment position in check.

The central bank expects the country’s foreign reserves to increase to $14 billion by June “on the back of the expected realization of planned official inflows.”

“This build-up in FX reserves to continue in FY26, based on a moderate current account deficit and improved financial inflows,” the SBP said in its statement.

Topics: IMF in Pakistan climate financing

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