Foreign investors withdrew $22.327 million from Pakistan's equity market during May 2009. The outflow of foreign investment started from 2008 due to weakening economic indicators, Mohammad Sohail, a leading analyst and CEO of Topline Securities said. The downgrade rating and exclusion of Pakistan Index from MSCI EM Index was also negative for foreign investors and they preferred to withdraw their investment from the equity market, he added.
He said that the imposition of price floor at the share market was also a major reason that shattered foreign investors' confidence and they opted to offload their holdings in the local bourses. He said that the global recession also forced the foreign investors to withdraw their investments abroad and invest at home.
The prevailing political uncertainty and law and order situation in the country also invited foreign selling at the equity market, he noted. According to the National Clearing Company of Pakistan Limited (NCCPL) data the outflow of foreign portfolio investment continued as the offshore investors withdrew $644.974 million from January 1, 2008 till date. The previous month recorded an outflow of $12.216 million of this mode of investment.
The situation slightly improved during the previous week ended May 22 with a fresh inflow of $1.634 million however; once again the offshore investors remained net sellers of $4.107 million this week ended May 29.
The week started on a negative note as an outflow of $1,921,105 was witnessed on Monday. This trend continued as offshore investors withdrew another $3,343,741 on Tuesday. On Wednesday, the situation improved with a fresh inflow of $1,184,458; however, the foreign investors remained net sellers of $2,273,724 on Thursday. On Friday, the offshore investors once again remained net buyers of $2,246,902.
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