Karachi - Pakistan's main Karachi Stock Exchange decided on Wednesday to freeze all stocks at current levels after the market plunged another 3.5 per cent amid mounting political uncertainties. "The board of directors has imposed a cap to stop the key KSE-100 Index from going below 9,000 points," said trader Ateeq Ahmad at Capital One Equities.
Pakistani stocks have lost over 45 per cent since January, including more than 12 per cent in just one week after the resignation of former president Pervez Musharraf and subsequent breakdown of the ruling coalition.
The hotly contested September 6 presidential election is also creating panic in the market. The Pakistan Peoples Party, which leads the government, has nominated its leader Asif Ali Zardari, the widower of slain Benazir Bhutto.
Zardari's past is tainted with scandals of murders and corruption involving billions of rupees, and it hangs like a dark cloud over the confidence of many investors.
"If Zardari becomes the president it will be hard for anyone to consider Pakistan as a safe place for investment," said one leading broker, who requested anonymity.
