Industry

Pakistan’s stock market jumps following expected $13B financial support from China, Saudi Arabia

Pakistan’s stock market on Monday jumped 318 points following expected $13 billion financial support from China and Saudi Arabia, local media reported.

The benchmark Karachi Stock Exchange-100 index gained 317.68 points, or 0.76%, to reach 42,173.99 points after opening, Daily Dawn reported.

The stock market rose after Finance Minister Ishaq Dar on Friday said that Pakistan was assured of around $13 billion in additional financial support from China and Saudi Arabia as the South Asian country faced financial and political crises.

Dar said that Beijing and Riyadh have assured Islamabad of help to get out of the current financial crisis.

During a recent visit of Prime Minister Shehbaz Sharif to Beijing, the Chinese leadership promised to roll over $4 billion in sovereign loans, refinance $3.3 billion commercial bank loans and increase currency swap by about $1.45 billion — from 30 billion yuan ($4.2 billion) to 40 billion yuan ($5.6 billion). The total worked out at $8.75 billion, Dawn quoted Dar as saying.

Last week, Sharif along with a high-level delegation visited China and met with President Xi Jinping.

“China would continue to extend its support to Pakistan for sustainable economic development and to harness its potential as the geo-economic hub,” Xi was quoted in a statement issued from Prime Minister’s Office in the capital Islamabad.

Beijing also agreed to process a $9.8 billion high-speed rail project (Main Line-1) from Karachi to Peshawar.

The Chinese and Saudi assistance will be crucial for Pakistan, which is currently struggling to cope with massive financial and human losses caused by a devastating spell of rains and floods.

In September, Islamabad also received $1.16 billion from the International Monetary Fund (IMF) under its bailout package.

IMF released the funds after Islamabad agreed to fulfill some key IMF demands, including the withdrawal of subsidies on electricity and petroleum, despite public outcry.

In 2019, the IMF agreed on a $6 billion bailout package to prop up the country’s sputtering economy.

According to the Pakistani finance minister, they are also in negotiation with Saudi Arabia for $4.2 billion.

“Saudi Arabia had also agreed to revive the $10-12bn petrochemical refining project at Gwadar,” the daily quoted Dar as saying.

On Sunday, Dar also met with Pakistan’s Ambassador to Saudi Arabia Ameer Khurram Rathore to finalize negotiations with the Kingdom.

Source: Anadolu Agency