The party of former cricket star Imran Khan claimed victory in Pakistan's election, boosting stocks as investors bet he'd be able to form a stable government that could address the nation's financial woes after a vote tarred by rigging allegations.
Khan's Pakistan Tehreek-e-Insaf, or Movement for Justice, said it has emerged as the single largest party and can form the federal government, Naeem ul Haq, a PTI leader told reporters on Thursday in Islamabad as long-delayed counting continued. "Imran Khan will speak soon and give an outline of his strategy," he said. An unofficial tally from Dawn newspaper showed the PTI leading in 119 seats, shy of the 137 needed to clinch a majority, though only 49 percent of the vote has been counted. Jailed former premier Nawaz Sharif's Pakistan Muslim League-Nawaz trailed with 61 seats and the Pakistan Peoples Party led in 40, with the other rest split among smaller parties.
While Sharif's party and the PPP denounced irregularities in the election, if needed 65-year-old Khan could strike deals with independent lawmakers to form a coalition.
"The overwhelming sentiment in favor of PTI all over the country proves that the people of Pakistan now want IK as their leader and PTI as the party in power to bring about the much needed change this country has been waiting for," Haque said in an earlier statement.
Pakistan's next leader will urgently need to deal with a mounting economic crisis: four currency devaluations since December have made it likely the next government will seek another International Monetary Fund bailout. Pakistan's benchmark stock index rose as much as 1.9 percent, poised for the highest since June 21.
"The completion of the election clears the path for the IMF negotiation, which is what, in the short-term, investors care most about," said Hasnain Malik, the Dubai-based head of equity research at Exotix Capital. "A PTI victory that comes very close to an absolute majority is, at this stage, the most positive outcome for long-term investors interested in seeing better economic governance in Pakistan."
Any government will also compete for influence over foreign policy with Pakistan's powerful military, which has ruled for much of the nation's history and faced accusations of meddling in the campaign -- allegations it denied. Khan has long criticized the U.S. for drone strikes in Pakistan, taken a hard line against India and expressed support for China's $60 billion infrastructure program.
"Khan as prime minister is unlikely to challenge the army's authority on policies including national security, defense, and relations with India, Afghanistan, and the U.S.," Shailesh Kumar, Asia director at Eurasia Group in New York, said in a report.
Shehbaz Sharif, the younger brother of Nawaz, told reporters in Lahore that the PML-N rejected the election results after its officials were kicked out of polling stations.
"This is the most dirty election in Pakistan's history," Mushahid Hussain, a PML-N leader, said at a press conference in Lahore. "This is not an election, but a selection. Someone is being installed, someone is being removed."
Pakistan Peoples Party co-chairman Bilawal Bhutto Zadari, 29, expressed similar concerns on Twitter.
"My candidates complaining polling agents have been thrown out of polling stations across the country," he said in a tweet. "Inexcusable & outrageous."
The Election Commission rejected the allegations as baseless, with secretary Babar Yaqoob telling reporters that parties had not provided any evidence to back up their claims. Results were delayed because the agency's results transmission system -- in use for the first time in Pakistan -- broke down due to pressure overloads, he said in a separate press briefing.
Khan, who has led a relentless anti-graft campaign, had the momentum heading into the election, and is seen as the military's top choice for prime minister despite his denials. Sharif has clashed repeatedly with the military over the years and was jailed this month on corruption charges, which he is appealing.
Wednesday's voting was marred by several terrorist attacks, including a bomb blast near a polling station in Quetta that killed 31 people and a strike on a military convoy that claimed the lives of three soldiers and one poll worker. Still, it was the allegations against rigging that may impact Khan's ability to form a government.
"Claims of electing rigging occur after every election in Pakistan -- but this time around, they will be harder to brush aside given the overt role the military has played," said Shamila Chaudhary, a former White House and State Department official who's now a fellow at Johns Hopkins University School of Advanced International Studies. "I anticipate the debate over rigging will occupy the political elite for some time."
Bloomberg's Chris Kay contributed.