Homepage / Currency / Why the ousting of the Pakistan prime minister is such a big deal
Amazon says this Prime Day was its biggest shopping event ever Kudlow says President Trump is 'so dissatisfied' with China trade talks that he is keeping the pressure on As stocks regain their footing, an ominous warning looms Goldman Sachs downgrades Clorox to sell, says valuation is 'unsustainably high' How Satya Nadella has spurred a tripling of Microsoft's stock price in just over four years Kudlow says economic growth could top 4% for 'a quarter or two,' more tax cuts could be coming The one chart that explains Netflix’s stunning comeback US housing starts plunge 12% in June to a nine-month low Aerospace titans Boeing and Airbus top $110 billion in orders at Farnborough Target uses Prime Day to its advantage, logging its 'biggest online shopping day' so far this year Billionaire Marc Lasry sees bitcoin reaching up to $40,000 as it becomes more mainstream and easier to trade These are the 10 US airports where you're most likely to be hacked Amazon shares slightly higher as investors await Prime Day results Wreck of Russian warship found, believed to hold gold worth $130 billion A bullish ‘phenomenon’ in bond market is weeks away from fading, top credit strategist says Stocks making the biggest moves premarket: MS, GOOGL, TXN, UAL, NFLX & more Twitter shares up 50% since late April means most upside priced in, analyst says in downgrade EU fines Google $5 billion over Android antitrust abuse Mortgage applications fall 2.5% as buyers struggle to find affordable homes America may not have the tools to counter the next financial crisis, warn Bernanke, Geithner and Paulson Investors are getting spooked as the risk of a no-deal Brexit rises EU expected to fine Google $5 billion over Android antitrust abuse Ex-FBI chief James Comey urges Americans to vote for Democrats in midterm elections Elon Musk apologizes to British cave diver following baseless 'pedo guy' claim Disney, Comcast and Fox: All you need to know about one of the biggest media battles ever Xiaomi shares notch new high after Hong Kong, mainland China stock exchanges reach agreement The trade war is complicating China's efforts to fix its economy European markets set for a strong open amid earnings; Google in focus Hedge fund billionaire Einhorn places sixth in major poker tournament The biggest spender of political ads on Facebook? President Trump Asian stocks poised to gain after Fed's Powell gives upbeat comments; dollar firmer Stocks are setting up to break to new highs Not all FAANG stocks are created equal EU ruling may be too little, too late to stop Google's mobile dominance Cramer explains how Netflix's stock managed to taper its drop after disappointing on earnings Airbnb condemns New York City's 'bellhop politics,' threatens legal retaliation Amazon sellers say they were unfairly suspended right before Prime Day, and now have two bad choices Investor explains why 'duller' tech stocks can have better returns than 'high-flying' tech names Elon Musk is 'thin-skinned and short-tempered,' says tech VC Texas Instruments CEO Brian Crutcher resigns for violating code of conduct Google Cloud Platform fixes issues that took down Spotify, Snapchat and other popular sites Uber exec: We want to become the 'one stop' transportation app 'What a dumb hearing,' says Democrat as Congress grills tech companies on conservative bias Amazon shares rebound, report says Prime Day sales jumped 89 percent in first 12 hours of the event How to put your medical history on your iPhone in less than 5 minutes Investment chief: Watch these two big events in 2018 Even with Netflix slowing, the market rally is likely not over Cramer: Netflix subscriber weakness debunks the 'sky's the limit' theory on the stock Netflix is looking at watch time as a new area of growth, but the competition is stiff Why Nobel laureate Richard Thaler follows Warren Buffett's advice to avoid bitcoin Rolls-Royce is developing tiny 'cockroach' robots to crawl in and fix airplane engines After Netflix plunge, Wall Street analysts forecast just tame returns ahead for the once high-flying FANG group Roku shares rise after analyst raises streaming video company's price target due to customer growth China is investing 9 times more into Europe than into North America, report reveals Amazon says US Prime Day sales 'so far bigger than ever' as glitch is resolved Netflix is on pace for its worst day in two years US lumber producers see huge opportunity, rush to expand San Francisco to consider tax on companies to help homeless Homebuilder sentiment, still high, stalls as tariffs, labor and land drive up costs Powell backs more rate hikes as economy growing 'considerably stronger' Netflix history is filled with big stock declines – like today – followed by bigger rebounds Intel shares get downgraded by Evercore ISI due to rising competition from Nvidia, AMD Petco aims to reinvent the pet store with something you can't buy online Genetic testing is coming of age, but for consumers it's buyer beware Tech 'FAANG' was the most-crowded trade in the world heading into the Netflix implosion, survey shows Netflix weak subscriber growth may indicate a 'maturity wall' that could whack the stock even more: Analyst This chart may be predicting the bull market's demise Wall Street says Netflix's stock plunge is a ‘compelling’ buying opportunity because the streaming giant ‘never misses twice’ Tesla sinks after Musk tweets, again Boeing announces new division devoted to flying taxis Stocks making the biggest move premarket: NFLX, UNH, GS, AMZN, WMT & more Deutsche Bank downgrades Netflix, but says big subscriber miss is not 'thesis changing' IBM is experimenting with a cryptocurrency that’s pegged to the US dollar North Korea and Zimbabwe: A friendship explained Virgin Galactic spinoff Orbit to launch rockets from the UK with space deal Artificial intelligence will create more jobs than it destroys? That’s what PwC says ‘Treasonous’ Trump and ‘Putin’s poodle:' Scathing headlines follow the Trump-Putin summit China’s fintech companies offer ‘enormous’ opportunity, investment manager says Trump's performance at summit with Putin was 'unprecedented,' experts say Walmart and Microsoft link up on cloud technology as they both battle Amazon European stocks seen mixed amid earnings; Fed’s Powell to address Congress How I knew I should quit my day job and run my start-up full-time: Viral website founder China's stocks have been trounced, but the trade war may ultimately be good news for those shares Billionaire tech investor Peter Thiel bets on crypto start-up Block.one Asian shares subdued open after mixed close on Wall Street; energy stocks under pressure Amazon cloud hits snags after Amazon Prime Day downtime Netflix isn't doomed by one quarter unless people start questioning the long-term investor thesis Tech stocks set to sink on Tuesday after rough evening for ‘FANG’ Netflix plummets after missing big on subscriber growth This wristband lets humans control machines with their minds The U.S. has a rocky history convincing Russia to extradite computer criminals Amazon suffers glitches at the start of Prime Day Jeff Bezos is now the richest man in modern history 'The United States has been foolish': Read Trump and Putin's full exchange Goldman Sachs recommends these 5 highly profitable companies — including Nvidia — to combat rising inflation Goldman Sachs releases 'tactical' stock picks for this earnings season Three red flags for Netflix ahead of its earnings report The bond market may be raising recession fears, but don't expect one anytime soon Cramer: Banks are 'making fortunes' but are still as hated as they were during the financial crisis Putin told Trump at summit: Russia never meddled in US election

Currency, United States Finance

Why the ousting of the Pakistan prime minister is such a big deal

Pakistan is likely to face serious political and economic instability after the country’s three-time Prime Minister Nawaz Sharif is ousted from power by the Supreme Court following a corruption investigation into his family’s wealth.

“He is no more eligible to be an honest member of the parliament, and he ceases to be holding the office of prime minister,” Judge Ejaz Afzal Khan said in court, Reuters reported.

But the nuclear-armed country is now set for political uncertainty with no clear successor in place.

Pakistan’s Supreme Court ruled on Friday morning to disqualify Sharif, along with the country’s finance minister Ishaq Dar, from power. Sharif also faces a corruption trial after investigators said his family could not account for its wealth. Sharif resigned shortly after the ruling.

The allegations relate to the 2015 “Panama Papers,” which revealed three of Sharif’s children had links to offshore companies which owned properties in London, according to BBC reports.

The court’s decision is a victory for the rule of law, according to Timothy Ash, emerging markets senior sovereign strategist at BlueBay Asset Management.

“Politicians have been brought to account in Pakistan – can the same be said for many emerging markets, e.g. Ukraine and South Africa. On the latter we talk a lot about the strength of South African institutions, but have any major politicians been brought to account for stuff that is not dis-similar, even worse, than this?” he said in an email to CNBC.

Ash said the ruling is a credit to Pakistan, even though it raises questions over the country’s political stability.

The ruling will make it more difficult for the U.S. to find a solution to the war in Afghanistan, says Wali Aslam, senior lecturer in international security at the University of Bath.

“High-ranking military and civilian officials in Washington have recently been reiterating the significance of Pakistan in resolving the conflict. In his recent visit to the region, Senator John McCain said, ‘We will not have peace in the region without Pakistan,'” he said in a press statement.

Aslam warns Pakistan’s relations with the U.S., China and India could be disrupted now Sharif is gone.

Sharif has been prime minister of Pakistan three times: from 1990 to 1993; from 1997 until 1999; and since July 2013. Pakistan’s prime minister is the chief executive of the country, with the power to form a cabinet, assign government ministers and control the country’s nuclear weapons.

Sharif’s party, the Pakistan Muslim League-Nawaz (PML-N), will get to choose the next prime minister, at least until the elections in the summer of 2018, according to Daniel Salter, head of equity strategy and head of research for Eurasia at Renaissance Capital. There may be infighting within the party, he warns.

“Nawaz’s daughter, Mariam Nawaz Sharif, who was being groomed as potential successor was also caught up in the (corruption) case: local sources seem to assume the army may have given its support to this ruling, perhaps to prevent the Sharif dynasty becoming overly powerful,” Salter said in a note.

With Sharif’s daughter compromised, Salter says the most likely successors are Sardar Ayaz Sadiq, speaker of the national assembly; Shahid Khaqan Abbasi, minister of petroleum; Khurram Dastgir Khan, commerce minister; and Khawaja Muhammad Asif, defense minister. He adds that Sharif may try to guide the party from the background.

The defence minister or railway minister Khawaja Saad Rafique are the most likely successors, says Asad Ali, Asia country risk analyst at IHS Markit, but he warns there’s risk of a split within the party.

“An official split in the PML-N ahead of the election would fracture the party’s vote bank in Punjab,” he told CNBC via email.

Sharif’s ousting will weaken PML-N’s chances of winning the election in 2018. The party is Pakistan’s most investment-friendly and pro-business party, according to Ali.

“Since it came to power in 2013, Pakistan’s key economic indicators have gradually improved due to better economic management while foreign investment has slowly picked up”, Ali said.

Pakistan’s all-share stock exchange fell sharply on the news, falling by 1.6 percent, but bounced back to finish up 44 points on Friday.

The country’s currency is also vulnerable, according to Daniel Salter.

“The Pakistani rupee has been vulnerable in recent months, overvalued on our REER (real effective exchange rate) metric. The currency had a mini sell off in early July which was quickly reversed and the central bank governor replaced,” he said.

“The current account has been worsening, FX reserves falling and exports contracting. We had assumed the government would keep the currency supported and allow weakening post-election.”

The Supreme Court ruling has increased uncertainty ahead of Pakistan’s next election, Salter cautions.

Follow CNBC International on Twitter and Facebook.

Source: cnbc
Why the ousting of the Pakistan prime minister is such a big deal

Comments are closed.