Karachi: Whoever wins Pakistan’s election next week, gains in the rupee, stocks and bonds are likely to be short-lived as the new government grapples with a mounting set of economic challenges.
Investors including Standard Life Investment Ltd and Frontier Investment Management Partners Ltd say a victory for former cricket star Imran Khan’s Pakistan Tehreek-e-Insaf or Movement for Justice, would create uncertainty but could lead to progress on tackling corruption over the longer term. A win for the business-friendly Pakistan Muslim League-Nawaz would probably be better for the market, according to Terra Nova Capital Advisors Ltd.
The victor will inherit a fast-deteriorating economy — the rupee has been devalued four times since December — that will probably soon require a bailout from the International Monetary Fund. Khan is seen as being more likely to go to the IMF, while the PML-Nawaz may seek assistance from China before approaching the multilateral lender. The two parties were neck-and-neck in a Gallup Pakistan poll released earlier this month.
Gabriel Sacks, Edinburgh-based portfolio manager at Standard Life Investments, which oversees around $30 billion (Dh110 billion) of emerging-market assets.