Pakistan stocks rose to a two-week high, with the index among only two Asian winners, after the bourse activated a 20 billion rupee ($282 million) government- backed support fund to halt this year's 21 percent slide.
The Karachi Stock Exchange 100 index rose 123.94, or 1.1 percent, to 11,280.62 at 10:14 a.m. local time, the highest since July 11. MCB Bank Ltd., the nation's biggest lender by market value, was among at least seven of the 100 companies on index that rose by the maximum 5 percent.
The index has risen 7.5 percent since July 22, when Finance Minister Syed Naveed Qamar visited the exchange to announce government backing for the fund to start operating. He spoke after a 15-day slump triggered violent protests last week.
``The initiation of the fund as announced by the minister added to investors' confidence,'' said Farhan Rizvi, an economist at JS Global Capital Ltd. in Karachi. ``The sentiment has supported the market to rise further, but it might see some correction in the later hours of the day due to the fast recovery in the last few days.''
Pakistan and the Sri Lanka Stock Market Colombo All-Share Index were the only measures to gain so far today. The MSCI Asia Pacific Index lost 2.2 percent to 133.79, the most since June 12 and extending its decline this year to 15 percent.
The fund formed by a group of institutions including government agencies will eventually be increased to 50 billion rupees, according to earlier statements by the exchange. Initially, it will be run by the state-owned National Investment Trust but later it will be turned into an ``open-end fund,'' said Nasim Beg, who manages the equivalent of $300 million in stocks and bonds as chief executive officer at Arif Habib Investment Management Ltd. in Karachi.
`Technically Active'
``The fund is technically active from today but will only start buying if the market falls 20 percent within 30 days,'' Beg said.
Police and paramilitary forces ringed the exchange July 17 after hundreds of investors stoned the building, smashed windows and shouted anti-government slogans as the market plunged. The crisis prompted a plan by exchange members the next day to buy 4.5 billion rupees of stock to bail out protesters, helping to snap the benchmark's worst losing streak in 18 years.
The Karachi Index plunged this year on concern the ruling government coalition would collapse because of disputes between Asif Ali Zardari, co-chairman of the Pakistan Peoples Party, the biggest group in the ruling coalition, and former Prime Minister Nawaz Sharif. The leaders have failed to resolve differences over how to reinstate judges dismissed by President Pervez Musharraf and whether the ex-army chief should be removed and stand trial.
Foreign Investors
Foreign investors slashed spending on Pakistani stocks to $19.3 million in the 12 months ended June 30, from $1.82 billion a year earlier, according to data compiled by the central bank.
The Securities & Exchange Commission of Pakistan on June 24 imposed and then removed a 1 percent daily limit on price declines on July 14. The measure had been aimed at halting a slide that wiped out $30 billion of market value in three months, threatening to undo a 14-fold rally since 2001.
Regulators last week eased the curbs on trading after volumes fell to the lowest in a decade. The restrictions, including a ban on short selling, were lifted by the securities commission after the exchange announced the fund to buy stocks.
