ISLAMABAD — The ongoing tension with India has shaken the confidence of
investors in Pakistan badly, setting the country on course to record its worst
performance in dollar bonds and stocks since 2023.-
- With fears of an all-out war looming large at the border,
the Pakistani stock market has reacted negatively by recording a major decline
in rupee and dollar bonds in April and underperforming massively in comparison
to its counterparts.
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- Pakistan Information Minister Attaullah Tarar announcing
in the middle of night early Wednesday that India may attack the country within
the next 24 to 36 hours also impacted the trading with the market reacting
negatively to the development and fears of war.
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- "The outlook in the near term is uncertain, so we can
expect further weakness because additionally, the US tariffs are an
overhang," stated Thomas Hugger, CEO of Asia Frontier Capital Limited.
Also read: Attari-Wagah border between India and Pakistan completely shut
- "Any de-escalation of the tension will obviously
calm down the nervousness of investors regarding further deterioration of the
fragile relationship between the two countries and we can expect a small rally
in bond and equity prices," Hugger added.
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- The investors have lost at least four per cent during the
month of April while equities are down by three per cent. In comparison,
India's assets have largely been invulnerable.
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- New Delhi has accused Islamabad of being involved in the
Pahalgam terror attack which claimed the lives of 26 innocent civilians. It led
to India declaring Pakistan's defence and security advisors at its High
Commission in New Delhi as Persona Non Grata, issuing deadline to Pakistani
nationals in India to leave the country, cutting down the diplomatic staff in
Islamabad, shutting down of the Attari border and suspending the Indus Waters
Treaty (IWT).
