Pakistan investors wary of political instability
Wednesday, 29 August 2007
KARACHI, Aug 28 (Reuters): Growing political instability in Pakistan has seriously dented investor confidence, sent the stock market tumbling, and widened international sovereign bond spreads.
The benchmark Karachi Stock Exchange 100-share index has lost about 13 per cent this month, and is down more than 16 per cent from a record high on July 13 as fears grow of more turmoil as President Pervez Musharraf seeks re-election.
Until August, the market had taken several political crises in its stride, and remains 19 per cent higher than at the end of 2006 as investors flocked to the emerging economy.
Analysts said the market shrugged off much of the political noise since March, when Musharraf suspended the country's top judge, triggering a wave of protests.
And it ignored a military operation to secure a radical mosque in the heart of capital Islamabad, and even reached an all-time high days after a bloody stand-off ended at the Lal Masjid.
But since then, gathering uncertainty has sent markets tumbling.
"The market will remain volatile until the time all the political issues are settled," said Shuja Rizvi, director of brokerage operations at Capital One Equities.
The benchmark Karachi Stock Exchange 100-share index has lost about 13 per cent this month, and is down more than 16 per cent from a record high on July 13 as fears grow of more turmoil as President Pervez Musharraf seeks re-election.
Until August, the market had taken several political crises in its stride, and remains 19 per cent higher than at the end of 2006 as investors flocked to the emerging economy.
Analysts said the market shrugged off much of the political noise since March, when Musharraf suspended the country's top judge, triggering a wave of protests.
And it ignored a military operation to secure a radical mosque in the heart of capital Islamabad, and even reached an all-time high days after a bloody stand-off ended at the Lal Masjid.
But since then, gathering uncertainty has sent markets tumbling.
"The market will remain volatile until the time all the political issues are settled," said Shuja Rizvi, director of brokerage operations at Capital One Equities.