KARACHI/LAHORE   -    Pakistan Stock Exchange climbed by nearly four percent Wednesday, hours after Saudi Arabia pledged to provide Islamabad with $6 billion in financial assistance to shore up a widening balance of payments crisis.

The benchmark KSE index of the Pakistan Stock Exchange gained 1,556 points to close at 39,271 points. The gains followed a string of losses on the bourse after mixed signals from newly-minted Prime Minister Imran Khan's government on plans to address the country's deteriorating finances.

On Tuesday, Khan struck a 12-month deal for a balance of payments lifeline during a visit to Saudi Arabia, which will deposit $3 billion with Pakistan's central bank and provide a matching deferred payment facility for oil imports.

"The market has welcomed the Saudi package which has eased off the situation Pakistan was faced with of late," Muzammil Aslam, former chief executive of EFG Hermes Pakistan -- the only foreign brokerage house in the country.

Khan's government has also entered talks with the International Monetary Fund (IMF) as it seeks a potential bailout package to stem its balance of payment and current account deficits.

Tuesday's relief package will likely lessen the amount of funds the country will need to secure from the IMF, analysts said. "Pakistan might get a $6-7 billion financial package from the IMF" in the wake of the Saudi deal, said Aslam.

An IMF team is set to arrive in Pakistan in early November to begin negotiations.

Since taking power in August, the former cricketer Khan has sought loans from friendly countries such as China and Saudi Arabia, promised to recover funds stolen by corrupt officials, and embarked on a series of high-profile populist austerity measures. Prime Minister Imran Khan in his Tuesday’s visit to Saudi Arabia managed to get a credit line of up to $6 billion to support Pakistan’s balance of payment account.

Investors sentiments were further fueled by the possibility of a similar arrangement from China (Premier’s visit is expected on Nov 3).

Commercial banks, fertilizers and oil & gas exploration sectors led the way in terms of sector-wise contribution, accounting for more than half the points gained, adding 855 points cumulatively. Experts said that despite getting Saudi Arabia’s support package, Pakistan may still seek IMF’s bailout. However, the bailout package will be much lower than what was previously being expected and less stringent.

Meanwhile, on Wednesday Pakistan Stock Exchange Limited (PSX) disclosed its 1QFY19 results, recording EPS of Rs0.03 vs. EPS of Rs0.10 in the same period last year. This is because of a 21 percent YoY fall in listing fees, a 32 percent YoY decline in interest income and a 62 percent YoY rise in other charges. Maple Leaf Cement Factory Limited (MLCF) revealed its 1QFY19 results, posting EPS of Rs0.99, down 45 percent YoY .This is because of a 44 percent YoY rise in distribution costs, a 78 percent YoY fall in other income and a 2.3x YoY rise in finance cost. Pakgen Power Limited (PKGP) announced its 3Q2018 results revealing an EPS of Rs0.80, down 17 percent YoY. The fall in earnings is due to a 28 percent YoY fall in sales, a 56 percent rise in administration expenses and a 27 percent rise in finance cost. Allied Bank Limited (ABL) disclosed its 3Q2018 results for the year, recording EPS of Rs2.4 vs. EPS of Rs2.9 in the same period last year. This can be attributed to an 11 percent YoY rise in administration expenses, a 3 percent YoY rise in taxation and a 69 percent YoY fall in reversal of provisions. Lalpir Power Limited (LPL) announced its 3Q2018 results, disclosing EPS of Rs0.22 vs. EPS of Rs0.39 in the same period last year. The decrease in earnings can be credited to a 28 percent YoY rise in administration expenses, a 31 percent YoY rise in finance cost and a 100bps YoY fall in gross profit margins. Fauji Foods Limited (FFL) announced its 3Q2018 results, disclosing LPS of Rs1.7 vs. LPS of Rs1.36 in the same period last year. This is can be attributed to 1) a 40 percent YoY fall in other income 2) a 37 percent YoY rise in finance cost and 3) a 25 percent YoY rise in administration expenses.