· The Supreme Court finally announced its verdict in favor of Ch. Pervaiz Elahi yesterday, following which he was inducted as the CM Punjab. This came as the 10 PML(Q) votes, which had earlier been rejected by Deputy Speaker Punjab Assembly citing article 63-A(1)(b), were ordered to be accepted.
· With Punjab KPK, GB and AJK under PTI coalition, a move towards early general elections appears highly probable, with even some voices within PML-N favoring the same.
· The political and economic uncertainty prevalent in the country has led to the PkR depreciating by 27% since the ouster of the previous government, pressured by foreign debt repayments and an ongoing CAD crisis. Furthermore, global bond markets started pricing in a potential default, with Dec’22 maturity Int’l Sukuk yielding 45.6%.
· From Market’s vantage, a move towards general elections may throw caution to the wind in terms of any semblance of stability. We do, however, expect the IMF’s EFF to restart irrespective of political developments, toning down the hoopla surrounding Pakistan’s external vulnerability. Domestic issues (elections, inflation, interest rates), however, will likely keep the PSX under pressure where a cautious approach continues to be merited.
Courtesy – AKD Research