Pakistani stocks jump the most since 2020 on hopes of political stability


Pakistani stocks rallied despite a broad sell-off in Asia on hopes that an imminent vote that will likely elect opposition leader Shehbaz Sharif as the next prime minister would bring political stability.
The KSE-100 index jumped 3.8% on Monday to post its biggest gain since April 2020, after former cricketer star Imran Khan was ousted in a no-confidence vote that ended his tenure. four-year race. The national currency also climbed.
Pakistan’s parliament then elected Shehbaz Sharif as prime minister, ending weeks of political unrest.
A reduction in political uncertainty helps investor sentiment, said Mohamed Sohail, managing director of Topline Securities in Karachi.
Meanwhile, Pakistan’s top central banker has promised “timely” policy actions to ensure stability amid political upheaval and a deteriorating economy.
“I have a broader message for the investment community, and that is that such political processes are not uncommon in democracies,” State Bank of Pakistan Governor Reza Baqir said in a statement on Monday. an interview with Bloomberg Television. “It is important that economic policy institutions act in a timely manner to ensure that the goal of financial stability remains.”
Monday’s gains in Pakistani stocks came even as a surge in US Treasury yields prompted losses in Asian markets. The KSE-100 index has now erased all of its losses for 2022 and is up 3.5% year-to-date.
A united opposition bloc rallied 174 lawmakers to vote against Khan after midnight Sunday in Islamabad, two more than needed to remove Khan from office. Its fall was accelerated by inflation above 12%, the rupee trading near a record high against the dollar and foreign exchange reserves shrinking.
“The market is rejoicing at the rare smooth handover of power to the lower house despite last night’s protests and the seemingly divisive approach of former Prime Minister Imran Khan,” said Faisal Bilwani, head of international sales at Alfalah CLSA Securities. Bets on quick talks with the IMF and easing commodity prices are also helping to revive confidence, he said.

Source link


Comments are closed.