Pakistan’s key stock index records highest year-end close amid budget, IMF optimism

This photo, taken on February 23, 2024, shows Pakistan Stock Exchange building in Karachi. (AN Photo/File)
Short Url
Updated 28 June 2024
Follow

Pakistan’s key stock index records highest year-end close amid budget, IMF optimism

  • Benchmark index witnessed an increase of 36,992 points or 89.2% on an annual basis during FY24 to close at 78,445 points
  • Pakistan is eyeing another loan program from the International Monetary Fund as it grapples with a macroeconomic crisis

KARACHI: Pakistan’s stock market ended fiscal year 2024 on a high, with its key stock index recording 78,444 points on Friday, the highest level reached on the last day of a fiscal year amid renewed optimism among investors that Islamabad would secure a fresh loan from the International Monetary Fund (IMF). 

Pakistan’s National Assembly on Friday passed the government’s tax-laden finance bill for the next fiscal year starting July 1, 2024. Finance Minister Muhammad Aurangzeb presented the budget on June 12 which featured a challenging tax revenue target of Rs13 trillion ($46.55 billion), up by about 40 percent from the target set in the current fiscal year.

The new budget has further burdened Pakistan’s salary class by imposing more direct tax on their income. Meanwhile, tax has also been increased to 18 percent on textile and leather products and mobile phones. However, analysts noted that the tax-heavy budget is in line with the IMF’s conditions for Pakistan to secure another financial bailout package. 

Pakistan’s stock market rebounded last year after the South Asian country secured a last-gasp $3 billion short-term loan from the global lender that proved instrumental in the country avoiding a sovereign default. 

“The KSE-100 index witnessed an increase of 36,992 points or 89.2 percent on an annual basis during FY24 to close at 78,445 points,” Tahir Abbas, head of research at Arif Habib Limited, told Arab News. He noted that this was the highest increase in percentage terms since FY03.

However, the market closed the last trading day of the outgoing fiscal year on a bearish note, with the index losing 83 points.

“Stocks closed lower amid pressure at the fiscal year-end close and on concerns of an expected higher CPI inflation for June 2024, and $918 million profit repatriations causing massive foreign outflows in May 2024,” Ahsan Mehanti, a senior stock analyst, explained.

Pakistan’s currency also stabilized during the outgoing fiscal year, as the Pakistani rupee appreciated by 2.8 percent on an annual basis against the US dollar. The local currency’s performance was a welcome sight, considering it had underperformed over the past three years. 

The currency appreciated primarily due to the decrease in the current account deficit, an improvement in Pakistan’s foreign inflows, a reduction in the gap between the open and interbank rates, and other administrative measures by the government.

Inflation, which surged to a record high of 38 percent in May 2023, has also declined considerably to 11.8 percent in May 2024 as per official data. 

However, the inflation outlook for June 2024 has increased slightly compared to the previous month but remains well below the June 2023 level. This rise can be attributed primarily to higher prices of perishable items, driven by the Eid Al-Adha event, according to a monthly report issued by the finance ministry.

“FY2024 is going to end with an economic stabilization path accompanied by improved macroeconomic indicators,” the finance ministry’s report for June 2024 said. 

The report added that subsiding inflationary pressures, stability in external accounts and exchange rate, fiscal consolidation and gradual recovery in industrial activities are restoring confidence among economic agents. 


Saudi mission in Pakistan condemns militant attack that killed 12 soldiers this week

Updated 4 sec ago
Follow

Saudi mission in Pakistan condemns militant attack that killed 12 soldiers this week

  • The embassy extends condolences to victims’ families and the Pakistani people in a statement
  • The statement reiterates the kingdom’s position ‘rejecting all forms of violence and terrorism’

ISLAMABAD: The Saudi embassy in Pakistan on Thursday condemned a militant attack on a joint security checkpoint in the northwestern Khyber Pakhtunkhwa province that killed 10 army soldiers and two Frontier Constabulary (FC) personnel, extending condolences to the victims’ families and the Pakistani people.
The attack, which occurred on Tuesday, targeted a joint army and paramilitary check post in the Mali Khel area of Bannu District, where militants detonated an explosive-laden vehicle after troops repelled their attempt to storm the post, according to the Pakistan military. Six militants were killed during the exchange of gunfire that followed.
“The Embassy expresses the Kingdom of Saudi Arabia’s condemnation of the attack on a joint checkpoint in the city of Bannu in the Khyber Pakhtunkhwa province of Pakistan, which resulted in the death and injury of a number of people,” the Saudi diplomatic mission in Islamabad said in a statement.
“The Embassy reiterates the Kingdom’s position rejecting all forms of violence and terrorism,” it added. “The Embassy extends its deepest condolences and sincere sympathy to the families of the victims, the government and the people of Pakistan, and wishes the injured a speedy recovery.”
Pakistan’s northwestern Khyber Pakhtunkhwa province has experienced a resurgence of militant violence in recent months, with a growing number of attacks on security forces and infrastructure despite the country’s efforts to combat militancy.
The region has long been a hotspot for insurgent activity, with militants frequently targeting military and paramilitary personnel.
Saudi Arabia has consistently expressed its support for Pakistan’s fight against extremist violence, emphasizing the importance of international cooperation to tackle militancy and ensure regional stability.


Imran Khan remanded to police for five days in case involving violence at Rawalpindi rally 

Updated 36 min 31 sec ago
Follow

Imran Khan remanded to police for five days in case involving violence at Rawalpindi rally 

  • Main charges include terrorism, vandalism, destruction of property, attempted murder 
  • Khan, jailed since August 2023, claims all charges against him are politically motivated

ISLAMABAD: A Pakistani lower court has remanded former prime minister Imran Khan to Rawalpindi police for interrogation for five days in a case pertaining to violence at a rally organized by his Pakistan Tehreek-e-Insaf (PTI) party in September, the party said on Thursday.

Khan was arrested in the rally case on Wednesday night, hours after the Islamabad High Court had granted him bail in another case that has popularly come to be called the new Toshakhana case, filed in July and involving a jewelry set worth over €380,000 gifted to the former first lady by a foreign dignitary when Khan was prime minister from 2018-2022. The couple was accused of undervaluing the gift and buying it at a lesser price from the state repository. Both deny wrongdoing. 

Khan has been in jail since August last year following his conviction in four cases, two of which have been suspended, including an original one relating to state gifts, and he was acquitted in the rest.

“An anti-terrorism court granted a five-day physical remand to Rawalpindi police in the first information report (FIR) registered on Sep. 28,” the PTI party said in a statement. “The FIR surfaced last night and Rawalpindi police declared the arrest shortly afterwards.”

The PTI party added that arresting a suspect in a case registered in September right after he was granted bail in another case was an “absolute mockery of the law.”

The police report of the case lists terrorism, attempted murder, vandalism, destruction of public and state property, and interference in government operations as the main charges. It says participants of the PTI rally created unrest, obstructed public access by burning tires and caused difficulties for citizens.

It also charged PTI leaders and supporters with raising anti-government slogans, hurling stones at the police and attacking them with iron rods during the protest. PTI rallygoers damaged several police vehicles and one police officer was injured, the report adds.

Khan was in prison when the Sept. 28 rally took place. The former premier denies any wrongdoing and alleges all the cases registered against him since he was removed from power in 2022 were politically motivated to keep him in jail.

His PTI party is staging a “long march” to the capital city, Islamabad, on Nov. 24, aiming to pressurise the government to release him.
 


Pakistan urges action after UN labels Israel’s war in Gaza consistent with genocide

Updated 42 min 10 sec ago
Follow

Pakistan urges action after UN labels Israel’s war in Gaza consistent with genocide

  • The UN report pointed at high civilian casualties, Israel’s use of starvation as a weapon of war
  • Pakistan welcomes the report’s condemnation of Israel’s smear campaign against UN agencies

ISLAMABAD: Pakistan on Thursday urged the international community to hold Israel accountable for its conduct in Gaza, citing a recent United Nations report describing it as consistent with genocide.
The UN Special Committee to Investigate Israeli Practices, established in 1968, released its latest findings on Nov. 14. The report highlights mass civilian casualties and widespread destruction in Gaza, pointing out the intentional imposition of life-threatening conditions on Palestinians, including starvation as a weapon of war.
It also called for immediate international intervention to address the humanitarian crisis and ensure accountability for violations of international law.
“We welcome the last, latest report of the UN Special Committee to Investigate Israeli Practices released last week,” foreign office spokesperson Mumtaz Zahra Baloch said during her weekly news briefing. “The report describes Israel’s warfare practices in Gaza as acts of genocide and documents millions of civilian casualties and grievous conditions intentionally imposed on Palestinians.”
“Pakistan welcomes the committee’s condemnation of the ongoing smear campaign and attacks against UNRWA [United Nations Relief and Works Agency] and the United Nations, and supports its call on all member states to uphold their legal obligations to prevent and stop Israeli violations of international law and holding it accountable,” she added.
The UN report was released in the context of intensified violence in Gaza, where Israeli airstrikes and a crippling blockade have led to a deepening humanitarian catastrophe. According to the document, the systematic targeting of civilian infrastructure and essential supplies has compounded the suffering of millions of Palestinians.
Pakistan has consistently advocated for Palestinian rights and the two-state solution. It also expressed “deep regret” over the United States’ veto of a ceasefire resolution a day earlier, noting that Washington cast the “sole negative vote” among UNSC permanent members.


COP29: Pakistan among nations that blast draft of vague deal on climate cash for poor countries

Updated 21 November 2024
Follow

COP29: Pakistan among nations that blast draft of vague deal on climate cash for poor countries

  • Introducing the plan, lead negotiator from Azerbaijan, Yalchin Rafiyev, emphasized how balanced the plan was
  • “We would like to correct the balance. It is completely tilted,” Pakistan delegate Romina Khurshid Alam said

BAKU, Azerbaijan: Countries of the world took turns rejecting a new but vague draft text released early Thursday which attempts to form the spine of any deal reached at United Nations climate talks on money for developing countries to transition to clean energy and adapt to climate change.
The draft left out a crucial sticking point: how much wealthy nations will pay poor countries. A key option for the lowest amount donors are willing to pay was just a placeholder “X.” Part of that is because rich nations have yet to make an offer in negotiations.
So the host Azerbaijan presidency with its dawn-released package of proposals did manage to unite a fractured world on climate change, but it was only in their unease and outright distaste for the plan. Negotiators at the talks — known as COP29 — in Baku, are trying to close the gap between the $1.3 trillion the developing world says is needed in climate finance and the few hundred billion that negotiators say richer nations have been prepared to give.
Negotiators slam an ‘unbalanced’ draft
Introducing the plan, lead negotiator Yalchin Rafiyev emphasized how balanced the plan was, but all sides kept saying it was anything but balanced and pointed time was running out.
“We would like to correct the balance. It is completely tilted,” Pakistan delegate Romina Khurshid Alam said.
Poor nations blasted both rich nations and the presidency with Honduras delegate Malcolm Bryan complaining that the plan was a “completely unbalanced text that doesn’t bring us any closer to a landing .... It is high time for developed countries put their numbers on the table.’’
The EU’s climate envoy Wopke Hoekstra called the draft “imbalanced, unworkable, and not acceptable.”
In a statement, the COP29 Presidency stressed that the drafts “are not final.”
“The COP29 Presidency’s door is always open, and we welcome any bridging proposals that the parties wish to present,” the Presidency said in a statement. It added that possible numbers for a finance goal will be released in the next iteration of the draft.
COP29 President Mukhtar Babayev convened the Qurultay — a traditional Azerbaijani meeting — where negotiators spoke to hear all sides and hammer out a compromise. He said that “after hearing all views, we will outline a way forward regarding future iterations.”
No figure for climate cash leaves many disappointed
Independent experts say that at least $1 trillion is needed in finance to help transition away from planet-warming fossil fuels and toward clean energy like solar and wind, better adapt to the effects of climate change and pay for losses and damages caused by extreme weather.
Esa Ainuu, from the small Pacific island of Niue said, slammed the lack of a number in the draft deal.
“For us in the Pacific, this is critical for us,” Ainuu said. “We can’t escape to the desert. We can’t escape somewhere else. This is reality for us. If finance is not bringing any positive, (then) why’re we coming to COP?”
She added: “I don’t even know if we’re going to be here for a COP 30 or COP 31. Something needs to happen.”
Adao Barbosa, a top negotiator from the Indian ocean nation of Timor-Leste said all developing countries are unhappy with the climate finance deal. As things stand, the deal is weak, Barbosa said.
Mohamed Adow, director of the think tank Power Shift Africa, expressed disappointment at the lack of a figure. “We came here to talk about money. The way you measure money is with numbers. We need a cheque but all we have right now is a blank piece of paper,” he said.
Iskander Erzini Vernoit, director of Moroccan climate think-tank Imal Initiative for Climate and Development, said he was “at a loss for words at how disappointed we are at this stage to have come this far without serious numbers on the table and serious engagement from the developed countries.”
He said that some developed nations “are slowly waking up” to the fact that keeping warming to below 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial times will require over a trillion dollars in finance. “But many are still asleep at the wheel,” he said.
There’s a lot of work left to do
There are three big parts of the issue where negotiators need to find agreement: How big the numbers are, how much is grants or loans, and who contributes.
Official observers of the talks from the International Institute of Sustainable Development who are allowed to sit in on the closed meetings reported that negotiators have now agreed on not expanding the list of countries that will contribute to global climate funds — at least at these talks. Linda Kalcher, of the think tank Strategic Partnerships, said on the question of grants or loans, the draft text suggests “the need for grants and better access to finance.”
She added that the lack of numbers in the draft text could be a “bluff.” The COP29 presidency, which prepares the texts “should know more ... than what they put on the table,” she said.
Other areas that are being negotiated include commitments to slash planet-warming fossil fuels and how to adapt to climate change. But they’ve also seen little movement.
European nations criticized the package of proposals for not being strong enough in reiterating last year’s call for a transition away from fossil fuels.
“The current text offers no progress” on efforts to cut the world’s emissions of heat-trapping gases, said Germany delegation chief Jennifer Morgan. “This cannot and must not be our response to the suffering of millions of people around the world. We must do better.”
Eamon Ryan, Ireland’s environment minister, also criticized “backsliding” on cutting fossil fuels from last year’s deal.


Police say gunmen open fire on vehicles in Pakistan’s restive northwest, killing at least eight

Updated 21 November 2024
Follow

Police say gunmen open fire on vehicles in Pakistan’s restive northwest, killing at least eight

  • Attack happened in Kurram, district in northwestern Khyber Pakhtunkhwa province 
  • Sectarian clashes have killed dozens of people in the region in recent months

PESHAWAR, Pakistan: Gunmen opened fire on passenger vehicles carrying members of the Shiite minority in restive northwest Pakistan on Thursday, killing at least eight people and wounding others, police said.

The attack happened in Kurram, a district in the northwestern Khyber Pakhtunkhwa province where clashes between majority Sunni Muslims and minority Shiites have killed dozens of people in recent months.

No one has claimed responsibility but Kurram has been a scene of sectarian violence in recent months, and the latest violence came a week after authorities reopened a key highway in the region after keeping it closed for weeks following deadly clashes.

Local police official Nusrat Hussain said several vehicles carrying passengers were traveling in a convoy from the city of Parachinar to Peshawar, the capital of Khyber Pakhtunkhwa, when gunmen opened fire.

He said at least five passengers were in a critical condition at a hospital.

Shiite Muslims make up about 15 percent of the 240 million population of Sunni-majority Pakistan, which has a history of sectarian animosity between the two communities.