ISLAMABAD – The Swiss multinational investment bank, Credit Suisse haspublished a report Pakistan Market Strategy that focuses on the country’supcoming General Elections 2018.

The report was published after incorporating inputs and data from Fahd Niazand Farhan Rizvi, their research analysts. The analysts have written apreview for the report, sharing their observations about which politicalparties are likely to be successful in forming the next government.

The preview titled ‘The Captain’s turn to Bat’ speaks for itself, withCredit Suisse declaring Pakistan Tehkreek-e-Insaf (PTI) as a clear favoriteto form the government after the July 25 polls.

The report has indicated three possible outcomes of the elections whilealso discussing their implications on the market.

The three possible results of the elections as predicted by Credit Suisseanalysts are as follows:

1. PTI-led Coalition with MQM, PSP and others

While no single party is favored to win the majority and form a governmenton its own, however, PTI is likely to edge ahead of the Pakistan MuslimLeague Nawaz (PML-N) with the total number of seats won.

PTI is expected to bag 92 seats of National Assembly and in that event, itmay look for form a coalition with other parties such as PSP and MQM toform a government. The probability for this is 60%. If it happens, it willhave a positive impact on the economy thanks to the likelihood of taxreforms, eradication of loopholes in the energy sector etc which willensure improved investment flows.

2. PTI-led Setup with PPP, MQM, PSP and others

PTI might also have to turn to PPP if it wants to form a government,however, the chances for that event are slightly low (15%).

It may, however, bring a negative impact on the economic market due tounclear economic policies, different stances on privatization and taxreforms along with a huge question mark on the sustainability of thecoalition.

3. PML-N led Alliance with PPP, religious parties and independent candidates

With the PML N likely to win 27% of the National Assembly seats (73), itmay also be able to form an alliance with PPP, provided that PTI fails toconvince other parties to form a coalition with them.

In this case, the market impact will be neutral to positive withpro-business policies, with a particular focus on infrastructure andenergy. There may, however, be lack of consensus on tax reforms andprivatization which may not bode well for the country.

If PTI forms a government in coalition with MQM & PSP with a healthymandate, the market is expected to respond positively to this development.

However, the newly formed government would have to deliver well on itspromises especially in the first three months to gain the trust of themarket. Credit Suisse believes that PTI will focus on agriculture, offerincentives to the exporters to increase the exports and revamp the energysector in a bid to overcome the crisis faced by the country