The Pakistan Stock Exchange began the week on a bullish note with investors going on a buying spree. The market took Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed al Nahyan’s visit as a sign that the $3 billion aid package the UAE government had announced will materialise soon.
The benchmark KSE-100 share index gained 1,000 points by afternoon and breached 38,500 points level by the afternoon to reach a four-week high.
This was the first visit by Sheikh Mohammed to the country in 12 years, where both the governments agreed to make a long-term investment framework to strengthen economic ties. In December, the UAE announced a $3 billion bailout package for Pakistan to overcome its balance of payment issue under the Abu Dhabi Fund for Development.
The uncertainty around the International Monetary Fund package, which is super critical to take the economy out of crisis, kept investors away from the market in the second half of 2018. Foreign investors continued to offload their shares in the market throughout last year.
Given the delay in the IMF loan programme, the news of UAE aid package sent positive vibes to the investors, analysts say. Moreover, the new allocations for 2019 also played a role because stock market funds had fresh investments to make. There are also hopes that the government might announce relaxations for the capital market in its mini-budget expected in mid-January.