KARACHI: Pakistan stocks surged, sending the benchmark index toward its biggest gain in more than five years, on speculation the army will help resolve a political standoff after two weeks of anti-government protests.
The KSE 100 Index jumped 3.2 per cent to 28,660.97 at 12:13pm in Karachi, poised for its largest advance since the recovery from the global financial crisis in July 2009. Oil & Gas Development, the nation's biggest company by market value, climbed 3.9 per cent. MCB Bank, the largest publicly-traded lender, rose 4.3 per cent. The rupee added 0.2 per cent and dollar-denominated government bonds gained.
The KSE 100, still down 5.5 per cent in August, is on course for its steepest monthly loss in three years, as thousands of anti-government protesters camp outside parliament. Pakistani Army General Raheel Sharif met opposition leaders Imran Khan and cleric Tahirul Qadri in Islamabad on Thursday, along with Prime Minister Nawaz Sharif, in an effort to end the impasse.
"The military wants the issue to be resolved democratically," said Khurram Schehzad, the chief investment officer at Karachi-based Lakson Investments, which oversees about $150 million. "The political system will continue."
The intervention of the army, which led a 1999 coup, could hasten the resolution of a political crisis fueled by the opposition's allegations of fraud in last year's election that brought Sharif back to power. The vote marked the first-ever democratic transfer of power in a country that has been ruled by the army for more than half of its history.
The turmoil has jeopardised a partially-disbursed loan from the International Monetary Fund and distracted military leaders as they battle Taliban insurgents on the Afghan border.
Pakistan and the IMF had agreed in September last year to a $6.6 billion loan that will be disbursed in tranches over 36 months to boost the nation's depleted currency reserves and help stabilise the economy.