Panic In Karachi: Pakistan Stock Markets Crash On Dawood Poisoning News
For the past two days, the Karachi stock markets are reeling under the news of underworld don Dawood Ibrahim's death by poisoning. India's most wanted man and also dubbed as the richest crime-lord, Dawood, is Pakistan's largest stock market investor, allegedly ensconced in Karachi's posh Clifton area under ISI protection. Pakistan's two benchmark equity indices "Karachi 100" and "Karachi All Share Index" declined by 8 percent amidst a calm in the global stock markets. In these two days, Dawood's death was the only bad news for the otherwise buoyant share indices in Pakistan, which were trading near their 52-week highs. All this when there is no concrete evidence of Dawood's death by poisoning or any reaction by Pakistan or India's government. Comparatively, the Karachi 100 index had lost only 1 percent in May on the news of arrest of former Pakistan Prime Minister Imran Khan.
On December 18, before the news of Dawood's death started doing the rounds on social media in India and around the world, the Karachi 100 index touched a high of 66586. Before that on December 13, the index touched a new 52-week high of 67,093. But in just two days after the news of Dawood broke the internet in India, the Karachi 100 index crashed by 8.2 percent from the high levels of December 18 to touch a low of 61,082 on December 20 (today). Similarly, the Karachi All Share index is down 7.8 percent from the highs of December 18 at 44369 to touch a low of 40,905 on December 20. Such sharp fall in benchmark indices is a sign of panic in the stock markets, experts said.
Despite Pakistan economy having its worst period post COVID and no major foreign flows coming in since the country was put in the terror grey list, the Karachi stock markets have been hitting new highs this year. Also, the political instability and virtual army rule in Pakistan have not deterred the stock market rally.
Sources told Businessworld that Dawood is hailed as Karachi's Robin Hood and was also the biggest investor in various illegal and legal businesses in the country. Not only this, Dawood is known to be the largest financier of Pakistan's rogue politicians and army generals. But the largest share of his illegal businesses came from the global drug trade, with a major distribution network in India, gun running, illegal betting and the fake currency racket.
Dawood's links to the Karachi Stock Markets
Reportedly, Zafar Moti the relative of Dawood's key lieutenant Jabir Moti, who is currently lodged in UK jail, was the director on board of Karachi Stock Exchange. The Moti family is known to run several securities and financial services companies in Pakistan and the UK, which through various subsidiaries and front companies invested in Pakistan banks. Zafar Moti Capital Securities Pvt Ltd was located at Room 54-55, 1st Floor, Pakistan Stock Exchange Building, Stock Exchange Road, Karachi. There are several other companies linked to Dawood, which are located in the Pakistan Stock Exchange building.
Dawood is also said to be the key beneficiary of Habib Metropolitan Financial Services, a big equity broker in Pakistan. Dawood's family member and former Pakistan cricketer Javed Miandad was the senior vice president of Habib Bank.
In 2015, Forbes magazine had estimated Dawood's wealth at $6.7 billion, approximately Rs 56,000 crore. These are the last available estimates of Dawood's wealth.
