The foreign investment on crises-hit Pakistan’s stocks market has marked an enormous decline of 79 per cent or $125.851 million during the first five months of current financial year, FY2011-12. A number of negatives, led by the on-and-off diplomatic face-off between USA and Pakistan, made the investors from some 21 foreign destinations withdraw $284.506 million during July-November. Whereas, according to State Bank data, net cumulative inflow of foreign portfolio investment stood at $ 158.655 million during the review period.
The post-May 2 strain in Pak-US mutual ties reflected adversely on level of American investment in terrorism-hit Pakistan’s equity market from where the American investors, perhaps succumbing to Washington’s strain ties with Islamabad, withdrew $118.364 million. On the other hand, the inflows accounted for a meager $75.338 million. This shows a decrease of 57 per cent. United Kingdom comes second in terms of investment withdrawals that amounted to $ 74.012 million against $ 21.239 million inflows shrinking the cumulative investment flow to $ 52.773 million. Luxemburg and Switzerland are two other countries where the investors’ confidence has been shattered the most, resulting in big respective outflows of $32.389 million and $23.005 million from Pakistan. Inflows from these countries wads recorded at $11.393 million and $11.753 million during the said period. Other international destinations, from where the inflow of portfolio investment into Pakistan set in negative include Australia, Canada, Hong Kong, Ireland, Korea, Malaysia, Singapore and South Africa.
The amount of withdrawals from these countries accumulated, respectively, to $ 4.871 million, $0.158 million, $8.605 million, $5.169 million, $12000, $ 11000, $0.509 million and $24000. While $1.521 million came from the investors in Australia, $ 82000 from Canada, $4.244 million from Hong Kong, $ 0.845 million from Ireland, $ 27000 from Singapore. The inflows from Malaysia, South Africa and Korea remained zero. The countries and regions from where Pakistan equities attracted more investment include Mauritius, Japan, Bahamas, China, Germany, Kuwait, Netherlands and Sweden. The investors from these destinations invested $22.67 million, $2.213 million, $1.968 million, $0.910 million, $1.231milliion, $ 5000, $ 23,000 and $ 0.624 million.
Withdrawals by the investors from these countries stood at $7.1 million, $1.810 million, $0.123 million, $15,000 and $0.590 million and zero from Kuwait, Netherlands and Sweden. With overall foreign investment declining in Pakistan, the analysts believe that if the authorities failed to improve the deteriorating law and order situation plus the recession-hit global economy did not embark on the recovery path Islamabad would find itself in hot waters in terms of foreign financing in the not distant future.
