Stocks in Pakistan’s stock market (PSX) went down by more than 1,000 points in the first half of trading on Monday. This happened because of uncertainty in the country’s politics after the general elections.
The KSE-100 index, according to the PSX website, fell by 2.12%, losing 1,356.22 points and reaching 61,587.52 levels by 11:32 am.
A report from Topline Securities mentioned that investors needed clarity on the new coalition government’s structure, the prime minister, and the economic team. The Election Commission of Pakistan’s provisional results indicated that independent candidates secured most National Assembly seats, and the PML-N became the largest single party. The N-league is talking to the PPP and MQM-P about forming a coalition government.
Investors are also interested in how the new government will handle economic challenges, especially in dealing with the IMF for a long-term program. Topline Securities warned that a weak coalition government could hinder broad economic reforms.
The firm highlighted the importance of the finance team of the new government, considering past issues with the PML-N’s nominated finance minister in the previous coalition government. It emphasized that the new government and its finance minister could play a significant role in negotiating with friendly countries for debt-related matters and finalizing a new IMF program that requires difficult reforms.
In the foreign exchange market, the rupee gained against the dollar by 18 paise in the interbank market on Monday. The dollar was trading at Rs279.10, compared to the previous closing of Rs279.28. The rupee had appreciated by six paise on the previous Friday, according to the State Bank of Pakistan.
As of February 2, 2024, the country’s total liquid foreign reserves stood at $13.10 billion, as reported by the central bank. Some people believe that the elections will bring stability to the country, as provisional results show that independents have secured a majority of the National Assembly seats.
