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KARACHI - Pakistan's stocks are set to tumble today as the political turmoil and violence unleashed after the killing of former prime minister Benazir Bhutto threatens to scare off foreign investors and damage the economy.
Bhutto was assassinated on Thursday ahead of elections scheduled for Jan. 8, throwing into doubt a smooth transition to civilian-led democracy after almost a decade of military-backed government under President Pervez Musharraf.
"The likelihood is that foreign portfolio investors would start pulling out. If that happens that would mean a serious amount of selling," said Nasim Baig, chief executive of Arif Habib Investments which manages $392 million in funds.
"This time we may try to conserve cash in case our investors want to cash out."
Karachi, the biggest city, financial capital and main port, has been paralysed by a spasm of street violence. Shops have been shuttered, petrol stations have closed and railways have been attacked by angry mobs, bringing transport to a standstill.
A promising investment story less than a year ago, Pakistan is now gripped by fears of capital flight if security worsens.
- REUTERS
