Pakistan’s stock market records gain as National Assembly holds maiden sitting

A man walks past the Pakistan Stock Exchange building in Karachi on February 23, 2024. (AN Photo)

• Analysts say maiden National Assembly session boosted investors’ confidence in Pakistan’s stock market
• After much political uncertainty and rigging accusations, Pakistani legislators will elect a new premier on Sunday

KARACHI: Pakistan’s stock market continued its bullish run on Thursday, extending its previous day’s gains to close with an increase of 1.3 percent, as political uncertainty somewhat decreased after the country’s National Assembly convened its maiden session following controversial polls this month.
The stock market’s benchmark KSE100 index gained 875 points to close at the 64,579 level on Thursday, official data showed. On Wednesday, the KSE100 index had gained by 484 points to close at 63,703 points. 
Pakistan has been wracked with political uncertainty due to countrywide protests by political parties, who say the national polls of Feb. 8 were heavily rigged. However, financial analysts noted that investors’ confidence in the market increased as Pakistan’s National Assembly held its maiden session on Thursday, indicating that the country would soon be led by a new democratic government. 
“Stocks closed bullish after the president summoned the National Assembly session himself for the formation of a government,” Ahsan Mehanti, the chief executive officer of Arif Habib Corporation, told Arab News. 
“The move is easing political noise.” 
The Pakistan Peoples Party (PPP) and the Pakistan Muslim League-Nawaz (PML-N) parties have announced joining hands to form their government at the center. The two parties have the required number of seats to form a coalition government. They also have the support of smaller parties in the assembly and have announced former premier Shehbaz Sharif as their candidate for prime minister. 
Sheheryar Butt, portfolio manager at Pakistani securities brokerage company Darson Securities, said the market had continued its bullish trend from Wednesday amid growing anticipation of the PML-N forming the next government. 
“The next government will have to negotiate with IMF (International Monetary Fund) and the manifesto of the PML-N is compatible with the IMF,” Butt noted. 
He said that Pakistani investors expect the new government will continue to implement the measures undertaken by the caretaker administration to secure a new long-term program from the IMF.
One of the principal tasks of the new government would be to secure a long-term bailout program from the international lender, as its short-term program expires next month. Pakistan’s fragile $350-billion economy is in desperate need of external financing to shore its up its foreign exchange reserves and escape its economic crisis. 
“Pakistan needs a long-term program for at least three years to ensure economic stability, so the market expects that the PML-N will follow the footprint of the caretaker government,” he explained.
Butt was confident Pakistan would secure the last tranche from the IMF under the $3 billion short-term financing agreement it reached with the lender last summer. 
Pakistan’s National Assembly will elect the country’s prime minister on March 3 while elections for the speaker and deputy speaker’s posts are scheduled to be held on Friday, March 1.