A massive outflow of $149.965 million from foreign portfolio was witnessed during the current month while the offshore investors withdrew $50.845 million of this mode of investment in the week ended on January 30, 2009. According to National Clearing Company of Pakistan (NCCP) data the foreign investors remained net sellers of $532.380 million in the period from January 1, 2008 to date.
"The continuous outflow of foreign portfolio investment from the country''s equity market is being witnessed since 2008 due to global recession and a heavy decline in almost all international markets", Khurram Schehzad, analyst at Invest Capital & Securities said.
He said that after a heavy decline in all international markets, the foreign investors were preferring to withdraw their investments from the emerging markets to invest in their own countries. Despite low returns, the foreign investors are preferring to invest in western markets, mainly due to low risk, he said.
On the other hand, depreciation in the local currency and liquidity crunch were also major reasons which forced the foreign investors to withdraw their investments from the Pakistan''s equity market. Some other policy and regulatory issues including imposition of price floor, geo-political and law and order situation also forced the foreign investors to pull out their investment from the country.
The foreign investors remained net sellers throughout the week, as an outflow of $6,682,907 was witnessed on Mondayy and $15,445,190 on Tuesday. The negative trend continued as the offshore investors withdrew another 15,911,714 on Wednesday, $4,060,986 on Thursday and $8,744,697 on Friday.
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