KARACHI – Capital market analysts believe that a possible change in the government would boost the stock market. The past cements aforementioned claim, as it is observed that the market responds positively in event of a change in power, said a senior analyst Muzammil Aslam.
He added that the last four caretaker setups have acted as catalysts, as the bourse has registered positive returns in the range of 3.2 percent to 23.6 percent during the rule. The highest return of 23.6 percent was observed during the caretaker government led by Malik Meraj Khalid (Oct 1996 – Feb 1997), and in the last caretaker setup governed by Muhammad Mian Soomro (Nov 2007 – Mar 2008), the market had gained 16 percent, clearly welcoming the change, he said.
The struggling economy is in dire need of a stable political situation, but unfortunately the country has never had consistency, even at times when democratic parties ran the government. As against the official full-term of five years, on average, the political government has survived for 37 months since 1988 with the longest term served by Shaukat Aziz’s government, five years (2002-2007) and the shortest by Benazir Bhutto’s government, for 20 months (1988-1990).
The question regarding survival of the incumbent party or its Prime Minister is heating up following MQM’s decision to part ways from government in center, he said. Analysts believe that the current government will weather the ongoing crisis and will be able to retain the office on grounds of a fragmented opposition.
This is largely because PML-N does not seem prepared for by-elections, while PPP is in the mood to accept the demands of coalition partners’. Technically, if the PM loses the majority in the Parliament, a vote-of-confidence would be needed from the House.
However, this can only happen if the president asks the PM to take this vote-of-confidence, the opposition files a request for the vote-of-confidence motion against the PM, along with suggestion of a candidate for replacement, approved of by all, or the government fails to pass any financial bill in the Parliament.
The second option also does not seem viable, as the opposition parties are not united and currently, it seems impossible for them to manage consensus over a candidate for the premiership. Lastly, there is no bill in the Parliament regarding finance waiting for approval, so this option is also not possible.
Therefore, analysts expect the noise to continue and that the current incumbent will continue running the office, although the possibility of the PM being replaced cannot be ruled out to win back the support of the coalition partners, said Muzammil Aslam of JS Research.
