KARACHI: The KSE-100 Index is trading up 3.98% (1,894 points) at 49,498 points on Thursday, as of 2:21 PM local time moments before 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 will be a key indicator today given that the Supreme Court is set to announce its ruling at 2 PM 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, one of the traders present at the Pakistan Stock Exchange (PSX) commented that he is expecting volatility in the trading today. On the other hand, another said, “If the decision is not favour of the PM [Nawaz Sharif], the market is anticipated to take a hit.”
The PSX added 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 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.
The Panama case-related fears have kept investors cautious for a few days now; once this matter is settled, it would 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.
Upon asking a small investor of the Panama decision’s impact, which is scheduled later today, it was understood that it would be positive for the country and the market.
The Panama papers case has drawn widespread media attention over the past year. In its decision today, the apex court could take a range of steps. It could clear the prime minister, or order a further judicial commission of inquiry or even declare him ineligible to hold office, as it did in 2012 with then-Prime Minister Yousuf Raza Gilani over a contempt of court case.