Pakistan’s domestic equity and bond markets are facing renewed selling pressure as geopolitical instability in the Gulf region drives foreign investors away.
The uncertainty surrounding West Asia is dampening market sentiment, with analysts noting that even without an immediate outbreak of conflict, the risk premium is keeping capital at bay.
A senior banker cited by Dawn Business emphasized that the current level of uncertainty is sufficient to deter foreign investors from entering the country.
A senior banker cited by Dawn Business emphasized that the current level of uncertainty is sufficient to deter foreign investors from entering the country.
This sentiment is reflected in the broader market reaction, where both local shares and government bonds are under pressure as traders price in the heightened geopolitical risk.
The economic impact extends beyond financial markets.
Reports indicate that new labor permits for Pakistani workers in Gulf countries have fallen nearly 19 percent, driven by shrinking job opportunities, tighter labor regulations, and rising tensions in the region.