Pakistan sets up Rs20 billion fund to stabilize stock market

The PTI government yesterday approved the use of Rs20 billion savings of pensioners and bank depositors to buy shares by investors in relaxation of prudential regulations aimed at stabilizing Pakistan Stock Exchange (PSX).

The decision was taken in a meeting of Economic Coordination Committee that was chaired by Adviser to PM on Finance Dr Abdul Hafeez Shaikh.

“In order to stabilize the stock market of the country, the ECC approved the proposal of Finance Division authorizing Government of Pakistan to issue sovereign guarantee amounting to Rs.20 billion for investment in National Investment Trust (NIT)-State Enterprise Fund,” a press release by the government said.

The fund has been conceived and approved without involvement of the Securities and Exchange Commission of Pakistan (SECP) – the equity market regulator. SECP Chairman Farrukh Sabzwari did not attend the ECC’s meeting, Express Tribune reported.

Secretary, Ministry of National Food Security and Research updated the Committee about the wheat situation in the country.

He informed that the country was in comfortable position with having 7.257 million tons of wheat available in the stock. Ministry of Maritime Affairs suggested various proposals on the revival and development of shipping industry in Pakistan.

The Committee noted the proposals and advised Ministries of Petroleum and Maritime Affairs to jointly come up with a comprehensive proposal, in next ECC meeting, for introducing a dynamic shipping policy focusing on expansion and development of local shipping industry.

The ECC acceded to the proposal of Ministry of States & Frontier Regions to grant Rs.781,591,000/- for arranging 20,000 Metric Tons of wheat for Temporarily Displaced Persons of erstwhile FATA.

The ECC also approved Supplementary and Technical Supplementary Grants for various Ministries/Divisions.

According to the Express Tribune report, the ECC approved Rs77 million supplementary budget for refurbishment of prime minister’s office and another Rs322 million for maintenance of Supreme Court building and residences of judges.

The decisions are against Prime Minister Imran Khan’s austerity drive. The Rs77 million payments were approved to clear past liabilities while Rs322 million have been sanctioned by the ECC for fresh refurbishment work.