Pakistani rupee strengthens 5.4% on reports of China loan

It was the first significant strengthening in years for the Pakistani rupee, which has weakened more than 20 percent since December after four separate devaluations by the central bank. (AFP)
Updated 30 July 2018

Pakistani rupee strengthens 5.4% on reports of China loan

  • State Bank of Pakistan declines comments on reports
  • Rupee’s surge unlikely to be sustained — brokerage

KARACHI: The Pakistani rupee surged by 5.4 percent to 120.84/122.45 per dollar on Monday, following domestic media reports over the weekend that China had agreed to provide $2 billion in loans.
A State Bank of Pakistan spokesman declined to comment on Monday about the media reports, which could not be confirmed.
Monday brought the first significant strengthening in years for the rupee, which had weakened more than 20 percent since December after four separate devaluations by the central bank.
Karachi-based brokerage Intermarket Securities said weekend publication of full results of the July 25 election may have helped sentiment, as did media reports of possible inflows from Saudi Arabia.
Officials from Imran Khan’s Pakistan Tehreek-e-Insaf (PTI), or Pakistan Movement for Justice, party said they were in talks with independents and at least one other political party to form a coalition government.
But the rupee’s advance might be short-lived, given Pakistan’s economic problems, analysts said.
“Short-term flows aside, it is difficult to see the (rupee) sustaining its pullback for long,” Intermarket Securities said in a note.
Many analysts expect Pakistan to turn to the International Monetary Fund for a bailout, which is expected to be in excess of $10 billion, according to local media reports.
Fawad Khan, head of research at BMA Capital, said the rupee surge could also be due to steps by the interim government to curb imports and new rules on documentation for buying more than $500.
He agreed the election results added to optimism on lending and imports.
“The market needs political stability, and that’s what it sees right now,” Khan said.
He added that the central bank so far had not acted to discourage the rupee’s rise, “but it might step in by tomorrow by start buying dollars from open market.”
The State Bank of Pakistan is the most influential player in the thinly-traded local foreign exchange market and controls what is widely considered a managed float system. 


Struggling WeWork mulls bailout deals with SoftBank, JP Morgan

Updated 14 October 2019

Struggling WeWork mulls bailout deals with SoftBank, JP Morgan

TOKYO: Under-pressure start-up WeWork is considering two huge bailout plans including a cash injection that could see Japanese investment titan SoftBank take control of the firm, according to reports.
The office-sharing giant had been on course for a massive initial public offering until last month when questions began to be asked over its governance and profit outlook.
The firm’s valuation plunged from $47 billion in January to less than $20 billion in September and the listing plans have been dropped, while co-founder Adam Neumann stepped down as chief executive.
With New York-based parent company We Co. not expected to push for the IPO this year, the cash-strapped firm is looking for a financial lifeline.
The Wall Street Journal, New York Times and Bloomberg News cited unnamed sources close to the talks as saying SoftBank — the US firm’s biggest shareholder — had drawn up a proposal that gives it full control of WeWork.
The move would dilute the voting power of Neumann, who remains as chairman of the company he started in 2010 and also currently maintains control a majority of voting shares.
They also reported that WeWork is looking at a deal with Wall Street giant JP Morgan to raise $5 billion in debt, with the Times saying directors of We would be meeting as soon as Monday afternoon to discuss that.
“WeWork has retained a major Wall Street financial institution to arrange financing,” the Journal reported a company spokesman as saying.
“Approximately 60 financing sources have signed confidentiality agreements and are meeting with the company’s management and its bankers over the course of this past week and this coming week.”
The New York-based startup that launched in 2010 has touted itself as revolutionizing commercial real estate by offering shared, flexible workspace arrangements, and has operations in 111 cities in 29 countries.
However, the company, which lost $1.9 billion last year, has faced skepticism over its ability to make money, especially if the global economy slows significantly.