Pakistani markets yesterday welcomed the apparent landslide victory of former Prime Minister Nawaz Sharif, buoyed by hopes that he will rescue the country from its political and economic woes, analysts said.
The Karachi 100-share index rose 1.95 per cent to 1,627.44 points an hour before the close.
Some analysts predicted the index could rise to around 1,750 points in the next few sessions.
What has emerged is excellent for the markets, said Anisur Rehman, research head at SocGen-Crosby Securities.
Rehman said Pakistan could get the most stable government in its recent history if Sharif won the two-thirds parliamentary majority required to amend the constitution.
It seems political instability is gone, but these results may not be enough to improve economic fundamentals, he said.
Arif Habib, president of the Karachi Stock Exchange, said the Karachi index would jump more than 50 points on Tuesday, but agreed that Pakistans economic problems had not vanished.
The direction the market will take will depend on how the new government will tackle these economic issues, Habib told Reuters Financial Television. The Pakist- ani rupee opened 0.03 rupees up at 41.77 to the dollar on Tuesday in kerb trading. The rupee has strengthened on Sharifs election victory, dealer Owais Kalia said.
He said the market faced a liquidity crunch because speculators were active in the stock market. Analysts said the market hoped a Sharif-led government would speed up privatisation, pursue industry-friendly policies and restore the shaken confidence of domestic and foreign investors.
The solution of Pakistans economic problems lies in early privatisation because that will generate the necessary funds for the government, Habib said. Privatisation proceeds could be used to retire debt, boosting foreign reserves, he added.
