Record foreign investment, as never seen before in Pakistan’s history.
Bourses receive record foreign investment
Pakistani bourses have received record inflows of foreign investment as the total amount reached all time high in any financial year. Market analysts said that the petrodollars were being recycled to invest in the emerging markets like Pakistan and pinned hopes for more inflows. The foreign investment directly invested in the shares market totaled $519 million since July 2006 to date which never happened before in the country’s history. However, portfolio figure which includes GDRs (Global Depository Receipts) was much higher. They said that the oil price boom created huge liquidity in the global market and the surplus incomes of the Middle Eastern countries were invested in the United States and Britain or kept in saving products of the two countries. These petrodollars have also found investment opportunities in Pakistan and other countries.
Only during the first 13 days of February, the foreign exchange inflows in the shares market reached $137.7 million reflecting the trend and confidence of the foreign investors. Analysts said if the inflows continued to flow with the same pace the figure would cross $200 million during February, which would be another record. The details of these investment showed that most of the funds had been coming from the United States and the UK. The USA invested $77.2 million during the 13 days of the current month while the UK poured $67.6 million during the same period. The other country, which invested, was Hong Kong and the amount was more than $7.4 million. The highest outflows were of Switzerland, which reached over $9.8 million during the same period of 13 days. Some analysts said the investment of foreign funds directly into the shares market had boosted the sentiment and a number of unattractive shares found better place to get higher price. “Asian bourses are the prime recipient of the petrodollars as the emerging markets used to have enough potential to reap maximum from the investment,” said Saqib Umar, an analyst. He said during the first seven months (July-Jan) the shares market received $382 million while the inflows during 13 days of February account for 27 per cent of the total $519 million. “The average per day inflow is $10.5 million, which is very high and could reach $250 million if the inflows continue with the same speed,” he said.
During the first six months the portfolio investment, which included $150 million GDR of MCB Bank, reached $620 million. However, GDR of Oil and Gas Development Company (OFGCL) has not been included in the portfolio investment. Experts and analysts said the investment in the shares market was highly encouraging, especially when the country was heading towards general elections, which might bring some political instability in the wake of change of government.