Pakistan's Stocks Rise After 20 Billion Rupee Fund Is Activated: Bloomberg

By Farhan Sharif

July 25 (Bloomberg) -- 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.

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