KARACHI: The KSE-100 Index closed up 2.39% (1,140 points) at 48,787 points on Thursday, following the much-anticipated verdict on the Panama Leaks case by the Supreme Court.
The stock market performance is a barometer of investor confidence in the economy and reflected the investors' sentiment following the Supreme Court's ruling on the Panama Papers revelation that the prime minister's children owned offshore companies dealing in millions of dollars in property transactions.
Speaking to Geo.tv earlier, a trader present at the Pakistan Stock Exchange (PSX) commented that he was expecting volatility during trade today, which didn't turn out to be true. On the other hand, another had said, “If the decision is not favour of the PM [Nawaz Sharif], the market is anticipated to take a hit.”
The PSX added had 729 points by Wednesday's closing bell, ending the day at 47,603 points, despite having commenced with a significant 800-point dip. Against its day's low, the benchmark index gained almost 1,600 points, marking the longest stretch in a day.
Many had expected a knee-jerk reaction due to the Panama case development, with some even taking positions to gain from the low share prices anticipated after the drop.
Fears pertaining to the Panama case have kept investors cautious since a few days now; now that the matter is settled, it is anticipated to bring clarity to the market. According to Zeeshan Afzal of Insight Securities, even though the market offers healthy returns and Pakistan officially regaining its MSCI Emerging Market status in May would trigger a rally, a financing product is needed.
The Panama papers case has drawn widespread media attention over the past year.
Business community reacts to the SC verdict
Business community welcomed the decision of Supreme Court of Pakistan in Panama case, saying it will ensure economic stability in the country.
Zubair Tufail, President, Federation of Pakistan Chamber of Commerce and Industry (FPCCI) said that political parties should honour the decision of the apex court and wait for the examination of the JIT.
Tufail said that importantly, the decision also ensures economic stability by the end of the current fiscal year because the budget 2017/2018 is to be announced next month.
Siraj Kassam Teli, Chairman Businessmen Group (BMG) and former president Karachi Chamber of Commerce and Industry (KCCI) said that the decision would result in political instability.
Zubair Motiwala, leading industrialist and vice chairman of Businessman group said that certainty had prevailed to some extent. “As the apex court has directed to form a JIT and decision will be based on the finding of the commission,” he said and added that after two months the uncertainty would return.
Motiwala said that the government would be under pressure regarding the budget and would try to provide maximum relief to the masses as the two judges of the Supreme Court had given their opinion against the PM.
Mian Zahid Hussain, President, All Karachi Industrial Alliance, welcomed the decision in the Panama case and said that it has ensured the continuity of economic activities in the country. He said that for the last two months people and businesses were confused about the political future of the country.