Foreign portfolio investment: Another outflow of $89 million in a day

KARACHI: Another $89 million flew out of the country’s stock markets only on Tuesday, bringing down the total inflow of foreign portfolio investment in the country since July 1 to $135.55 million.

There was an inflow of only $14.74 million in Special Convertible Rupee Accounts (SCRA) against outflows of $103.44 million during the day, statistics of State Bank of Pakistan revealed on Wednesday.

These are the accounts opened by the foreigners in Pak Rupees. The amounts are credited to these accounts after conversion of foreign currency into Pak. Rupees for the purpose of investment at stock exchange. Investors in the United Kingdom pulled back $26.27 million while investors in the United States withdrew $51.93 million.

There has been a net outflow of $160.78 million during the month of November, indicating decline in confidence of foreign investors in our economy following the imposition of emergency in the country.

The net portfolio investment during the last fiscal year through SCRA stood at $978.

Analysts had said at the beginning of the current financial year that if economic growth continued to show strength it exhibited during the last four years, the inflows, including those through SCRA, could set new records during 2007-08. However, it now seems difficult that the foreign portfolio investment will be able to even cross the one-billion-dollar mark this year. That is why some economists have been criticising the government for relying too much on such undependable inflows instead of focussing on export growth. staff report

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