KARACHI: Topline Securities in its latest note to investors has predictedthat there is a 75 per cent probability that the new coalition governmentwill be led by Pakistan Tehreek-e-Insaf (PTI) along with independentcandidates and smaller parties. Since it will be a close contest, there isa 25 per cent likelihood that Pakistan Muslim League Nawaz (PML-N) willreturn to power and will form a coalition government with Pakistan Peoples’Party (PPP) and other parties and independent candidates, Pakistan Todayhas reported.
Pakistan will be gearing up for its second consecutive democraticgovernment transition later this month. Observant and political expertsterm the upcoming polls, scheduled for July 25, 2018, as one of thetoughest and tightly contested elections in Pakistan’s history.
Based on market analysis, Topline Securities Analyst Nabeel Khursheed saysthat there will be a neck to neck contest between PML-N and PTI.
In a poll of leading corporates and fund managers, 77 per cent believe PTIto lead the next government and were equally split between PML-N and PTI asto who will get the highest number of seats.
In another poll of top political experts, 75 per cent of respondents wereof the view that PTI will form the next government with 71 per cent statingthat PTI is likely to score the highest number of seats.
In Gallup’s last national polls conducted in March 2018, PML-N remained thefavourite among the public with 36 per cent popularity followed by PTI with24 per cent. PML-N popularity before 2013 poll was 41 per cent and PTIstood at 14 per cent.
Experts believe that ‘electables’ are expected to play a significant rolein the upcoming elections. History suggests that influential and richcandidates from different rural constituencies can significantly impact theend results as political parties are only important in cities whilepersonal influence is key in villages and rural areas. It is for thisreason that PTI has fielded some strong candidates who enjoy popularstanding in their respective constituencies.
Besides many electables joining PTI, the on-going investigation against keyPML-N lawmakers along with news of media censorship will also help PTI,analysts believe. International media and PML-N are also criticizing it andterming it as ‘political engineering’.
Some sections of media are deliberating that whether corruption casesagainst Nawaz Sharif and his family could lead to sympathy among voters.While PML-N gaining sympathy votes cannot be ruled out in the generalelections of 2018, it may not drastically alter the forecast of PML-Nwinning 80-90 seats, Topline Securities’ report noted.
The report added, “We do not anticipate religious parties to post majorthreat in the upcoming 2018 general elections despite their announcement tounite under the banner of Muttahida Majlis-e-Amal (MMA). This is because,contrary to perception, except for 2002 elections, religious parties didnot gain more than 5-6 per cent of seats.”
“Though in a coalition government, making rules will be difficult butlooking at past trend, we conclude that the economy of Pakistan and stockmarket have no correlation with the political structure, whether majorityor coalition,” the report added.
“Based on our analysis and taking the cue from our poll of marketparticipants, we estimate KSE-100 index to go as high as 48,000 in case ofPTI led government. While the index may go up to 50,000 if PML-N leads. Thereason for a post-election rally will be political stability and Pakistan’slikely entry into an IMF programme. The lower upside of the index in caseof PTI is owing to uncertainty over its economic policies while in case ofPML-N, the market is expected to show a higher level of confidence,” thereport concluded.