NEW DELHI: More than jittery over cricketer-turned-politician Imran Khan‘s plans to shut down Islamabad next week, as much as $3.35 billion has already been wiped off from Pakistan’s stock market, reports The Express Tribune newspaper.
With massive protests, Imran’s Pakistan Tehreek-i-Insaf (PTI) party plans to bring Pakistan’s capital to a standstill on November 2, to protest the alleged lack of transparency in the Nawaz Sharif-led government. Sharif has been implicated in the Panama Papers leak.
“Since hitting its record high on October 20, 2016, the benchmark-100 index has retreated 1,558.64 points, down 3.75% during the course of five trading sessions that wiped off over Rs 353.65 billion,” the newspaper wrote.
Imran’s had success in shutdowns in the past. He led a similar protest in the latter half of 2014, shutting down parts of Islamabad for as long as four months.
The selloff in the stock market halted the 26.6% gain seen in the KSE-100 index – akin to India’s Sensex – in fewer than 10 months. And the push to sell has only increased since Pakistan Awami Tehreek chairman Allama Tahir ul Qadri said he will join PTI’s protest.
“Increasing political uncertainty, as (the) date of PTI protests in Islamabad approaches, remains the main reason of nervousness among investors,” said Muhammad Shamoon Tariq, a partner at the Sweden-based Tundra Fonder, which has assets under management in Pakistan worth $150 million, to The Express Tribune. “The situation is exacerbated with religious parties joining the protest,” Tariq added.
Tariq said that a few other crucial developments on the political front are also making investors jittery.
“Markets are always scared of uncertainty and in the current protest call of PTI, no one is very sure of the outcome. The timing of these protests is also significant as the new Army chief’s appointment is still pending,” Tariq told the Pakistani newspaper, referring to the upcoming end of tenure of General Raheel Sharif.
“Political noise always has a greater impact on equities than any other news flow. The locking down of the capital where all the government machinery, foreign diplomats and foreign institutions reside is certainly the most important factor in the investors’ minds right now,” he added.