Shaukat as prime minister to mean continuity of reforms; stock market may go up 2 percent this week

The appointment of Shaukat Aziz as prime minister, like Manmahoon Singh in India, is a message to businessmen, traders and investors, especially at the helm of stock market, that the continuity of reforms would pull the country out of foreign debt trap.
Humaira Zaheer, head of research at Capital One Equities, said, "I think it is a positive sign for economy and the market as, being finance minister, his policies and concrete steps have remained beneficial."
Besides that as he does not hold a political background, his efforts as prime minister and finance person would be for the betterment of the nation rather than involvement in political games, she added
Although there were speculation in the financial markets of Pakistan that the country's prime minister will be changed, but hardly anyone had thought that the new PM would be the famous and one of the most reputable Finance Minister, Shaukat Aziz.
His appointment is a pleasant surprise for the capital market players and, therefore, the stock market is likely to welcome this news on a positive note.
Karachi bourse which recently went into correction after the Budget announcement on the issue of tax on share trading would ignore the new levy and is likely to post gains of around 2 percent on the first day of the new week, said Mohammad Sohail, head of research at Investcapital Securities.
He said that financial sector reforms and other measures like tax and tariff rationalisation, deregulation, privatisation, etc carried out by Shaukat Aziz during the last five years were a clear indication that his appointment as PM would be appreciated by the business and industrial communities of the country.
He said that Shaukat had brought the country out of the debt burden to a point when the country is now targeting to achieve a high GDP growth rate of 8 percent in the next few years.
He said that Shaukat, besides the lingering economic challenges like poverty and unemployment, now needs to tackle problems like creating harmony within the ruling party besides co-ordinating with opposition parties in fighting the global terrorism which has increased in the country.
The recent security and law and order situation is yet another challenge for Aziz as this is hampering foreign investment in Pakistan despite better economic and financial conditions.
"I think that the role of Shaukat Aziz as Prime Minister will be taken extremely positively by the stock market," said Tanvir Abid, head of research at Jahangir Siddiqui Capital Ltd.
"Aziz has been the key figure behind Pakistan's tremendous economic achievements during the last few years. He commands enormous credibility in the international arena and has played a pivotal role towards Pakistan's attaining self-sufficiency on the external economic front.
The greatest attribute of Shaukat has been the consistency in his approach in terms of continuation of economic policies and building on the foundations laid. I believe that the greatest advantage of Shaukat Aziz as Prime Minister will be greater co-ordination and synchronisation between the various government divisions and implementation of a clear and consistent economic approach," he said.
Greater political stability is also to result as Shaukat Aziz' affiliation with President Musharraf is considered to be very strong and deep-rooted.
Given Shaukat Aziz' support for industries and capital market development, stock market participants would greatly favour him. It can be expected that with greater autonomy and freedom, Shaukat Aziz will be in a position to pursue economic development plans more aggressively, boding extremely positively for the country's prosperity and stock markets.
"I think that this political development will give a major boost to the stock market and reverse the recent bearish trend," he said.
Zaheeruddin Khalid, head of research at Elixir Securities, said that the appointment of Shaukat Aziz as the prime minister "is likely to be taken positively by the business community".
This is the first time in the history of Pakistan that an elected PM would be a technocrat. Though Aziz has proven himself in the post of finance minister, his success with managing political parties and politicians still remains to be seen.
While his forte would remain policy-making and implementation, his main challenge would be political manoeuvring required especially in the conditions currently prevailing in the country.
The stock market will view Aziz' appointment with cautious optimism with concerns over the interim period when Chaudhry Shujaat would be in charge.