PSX: Investors await the decision of the Supreme Court on no-confidence

Local political clouds have still not dispersed. In a new twist, the Deputy Speaker of the National Assembly rejected the much-awaited vote of no confidence against the Prime Minister (PM) on Sunday.

A joint coalition of the opposition parties had filed for a no-trust move against the PM when a National Assembly session was requisitioned on March 8th, 2022. After that, all the parties had sped up efforts to ensure the majority was with them. A blow to the government came after its key allies (MQM and BAP) reached a pact with the opposition. However, before the voting could commence, the speaker dismissed the motion on the grounds of violating Article 5 of the Constitution.

The opposition, adamant about going through with the vote yesterday, was jolted by an unexpected move made by the sitting government’s Information and Law Minister to quote a violation of Article 5, “Loyalty to the State is the basic duty of every citizen” alleging foreign interference in state matters. Deputy Speaker Qasim Suri rendered the motion “unconstitutional” based on this.

Immediately after, PM Imran Khan advised the President to dissolve the National Assembly and called for fresh elections in an address to the nation. While the Supreme Court (SC) also took a Suo Moto notice of the same, stating clearly that all actions initiated by the PM and the President will be subject to a court order, the opposition did not take this lightly either.

Guess what follows next will be trickier as everything depends on the SC and its hearing which is set to commence today. Two scenarios are widely being discussed 1) the Supreme Court decides not to override the ruling of the parliament under Article 69 of the Constitution, hence general elections to take place within 90 days, or 2) the Supreme Court renders the move unconstitutional and reinstates the National Assembly.

We believe the market will continue to look for clarity on the political front as that will set the tone for a future strategy to handle the economy and foreign policy. This clarity will only emerge once the Supreme Court decision comes through, we view.

Courtesy – AHL Research

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