ISLAMABAD (Reuters) – Pakistani rivals stepped up their campaign for next week’s presidential election on Wednesday as political uncertainty deepened by a split in the ruling coalition drove stocks lower.
Hopes for stability after Pervez Musharraf resigned as president last week were dashed when the alliance, headed by the party of slain former prime minister Benazir Bhutto, split over a judicial dispute and who will replace Musharraf.
The departure of the second biggest party, that of former prime minister Nawaz Sharif, ended what analysts said was an unnatural alliance between the two old rival parties and set the scene for a battle over the presidency.
Drawn out political uncertainty and militant violence have undermined the confidence of investors who hoped Musharraf’s departure would let the government focus on economic and security problems.
Pakistani stocks fell more than 4 percent to their lowest level in more than two years on Wednesday.
The benchmark Karachi Stock Exchange index has fallen for six consecutive sessions after a two-day recovery following Musharraf’s resignation.
“There is still a lot of uncertainty on the political front. People just want to get out of the market,” said Sajid Bhanji, a dealer at Arif Habib Ltd.
As investors sold their stocks, the politicians were drumming up support for the September 6 presidential election in which members of the country’s four provincial assemblies and two-chamber national parliament will vote.
Bhutto’s Pakistan People’s Party has nominated her widower and political successor, Asif Ali Zardari while Sharif’s party has put forth a former Supreme Court judge, Saeeduzzaman Siddiqui, for the post.
The main pro-Musharraf party has nominated a former government minister and top party official, Mushahid Hussain Sayed.
No party has a simple majority of electoral college votes though analysts expect Zardari to be able to gather enough support to win.
Bhutto’s party dismissed a news report published this week suggesting Zardari, who spent 11 years in prison on various charges but was never convicted, suffered from severe mental problems.
Party spokeswoman Farzana Raja said Zardari had been tortured while in prison and as a result had been under mental stress and had a heart problem.
“But he has never been mentally ill,” she said.
“It’s a planted story to try to ridicule Mr Zardari, our party and the country.”
A spokesman for Sharif’s party said if the report of Zardari’s mental illness were true, he would be ineligible to run for president.
Prime Minister Yousaf Raza Gilani, a senior Bhutto party official, visited old Musharraf ally and former interior minister Aftab Ahmed Khan Sherpao on Wednesday to appeal for his support for Zardari’s presidential bid.
Sherpao told reporters he would decide on the appeal after consulting his party colleagues.
Bhutto’s party already has the backing of the Muttahida Qaumi Movement, a regional party once fiercely opposed to Bhutto that has a significant number of members in the National Assembly and in the Sindh provincial assembly.
Sharif’s Pakistan Muslim League (Nawaz), meanwhile, is in contact with members of the old pro-Musharraf party, known as the Pakistan Muslim League. Many members supported Sharif before he was overthrown by Musharraf in 1999.