Pre-poll political limbo in Pakistan threatens best stock rally in Asia

The lack of a clear frontrunner among the three main parties is also adding to uncertainty among investors

A period of pre-election political limbo coinciding with an increasingly perilous economic backdrop is prompting predictions that a rally in Pakistan stocks is set for a reversal.

The benchmark KSE100 Index will probably fall 10-15 percent in the run-up to elections in July or August, said Muhammad Rameez, the head of international sales at Foundation Securities Pvt. in Karachi. That would wipe out this year’s 10.6 per cent gain in local-currency terms, the best performance in Asia.
 

“A chain of events including politics and economic vulnerabilities, coupled with a lack of earnings growth” will spur drops, said Rameez, who correctly