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UPDATE 2-Pakistan shares jump as Musharraf quits
August 18, 2008 / 6:58 AM / 9 years ago

UPDATE 2-Pakistan shares jump as Musharraf quits

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KARACHI, Aug 18 (Reuters) - Pakistan shares jumped 4.5 percent on Monday in the biggest one-day rise in nearly eight weeks, led by blue-chip OGDC, as investors anticipated an end to Pakistan’s political turmoil after President Pervez Musharraf’s resigned.

The Karachi Stock Exchange (KSE) benchmark 100-share index .KSE finished up 4.49 percent at 10,719.62 points with 104.5 million shares traded.

Monday’s rise was the biggest since June 24 when the index leapt 8.6 percent after authorities took steps to stabilise the market.

“It eliminates all the uncertainty in the market and I think the political uncertainty is coming to an end,” said Asad Iqbal, managing director at Ismail Iqbal Securities.

“The government will hopefully start concentrating on the economy. From an economic point of view, they have no excuses now and they have to perform.”

Musharraf announced his resignation on Monday in the face of an impending impeachment motion by the ruling coalition government.

The former army chief and firm U.S. ally had seen his popularity slide over the past 18 months and had been isolated since his allies lost a February election. [ID:nISL174014]

Blue chips led gains. Oil and Gas Development Co (OGDC.KA), Pakistan’s biggest company by stock market value, climbed 5 percent. MCB Bank (MCB.KA), the largest bank by stock market value, added 5 percent as well.

Political turbulence in Pakistan has pummeled the country's financial markets. The Pakistan rupee PKR=PK is near a record low against the dollar, and the KSE index is hovering near two-year lows.

It has lost nearly a third of its value since hitting a record high of 15,739.25 points on April 21, but speculation in the past week that Musharraf may resign helped the index to rise around 8 percent.

However, some analysts said the buoyancy in stocks may be temporary because it remained to be seen whether the ruling coalition government can put the economy back on track.

“The stock market and the currency markets have given very positive responses but this is not the end of all issues. This exuberance is going to be short-lived,” saidImtiaz Gadar, head of research at JPMorgan.

Pakistan’s economy is wrestling widening trade and fiscal deficits, and declining foreign exchange reserves that have been depleted by high oil prices.

State-run Pakistan Petroleum Ltd (PPL.KA) and Pakistan Telecommunication Co Ltd (PTCA.KA) were up 5 percent each as well. (Reporting by Koh Gui Qing; Editing by Jerry Norton)

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