Pakistan okays $134m fund to support market

Pakistan yesterday approved a 20-billion rupee ($134 million) fund to help boost its stock market after big losses over the past two years, the finance ministry said. Pakistan’s stock market has been one of the world’s worst performing over the past two years, with its benchmark 100-Share Index losing almost a third of its value since hitting an all-time high of 53,127 points in May 2017.

The finance ministry said the Economic Coordination Committee (ECC) of the Cabinet, a top decision-making body headed by de facto finance minister Abdul Hafeez Shaikh, gave the green light for the fund. “In order to stabilise the stock market of the country, the ECC approved the proposal ... to issue sovereign guarantee amounting to 20 billion rupees for investment in National Investment Trust (NIT)-State Enterprise Fund,” the ministry said in a statement.

Pakistan is expected to confirm the IMF loan agreement in coming months, which has in the past also been a trigger for stock market rallies. Prime Minister Imran Khan government forecast growth of 4 per cent for next financial year ahead of an austerity budget that is meant to reassure the IMF that Pakistan is serious about tackling some of the structural issues that have led to boomand-bust cycles.