Foreigners withdraw $250m from Pak stock market during 2009
Monday, 27 April 2009
KARACHI: A sizeable amount of $250 million outflow took place from the equity market during the current calendar year 2009, according to Daily Times.
Since the removal of floor, country' stock market witnessed rapid outflow of foreign portfolio investment because of negative sentiments caused by the imposition of floor mechanism. The amount of capital flight from the capital market was much larger in the beginning of the current year, however the recovery of the market in month of March and April helped to block the capital flight in the shape of inflows in these two months.
"The actual selling by the foreigners is above $500 million. However the buying by the foreigners during the recent months offset the effect," analysts pointed out.
Although, the stock market recovered during the last two months, it has been unable to attract foreign investment because of various issues confronting the country which are keeping the foreign fund managers at bay. The cautious approach of the foreign investors viz-a-viz the local stock market could be gauged from the figures of this week' portfolio investment when they bought $18.8 million in the capital market and sold $25.3 million, thus resulting in net selling of $6.5 million during the week.
Analysts said that major exodus of offshore investors took place in the early part of the current year when market was sailing on the trouble waters after the removal of floor. However the recent months recovery forced them to think otherwise for investment in the Pakistan's capital market. "Values are still very attractive despite the gains of over 2500 points since the start of current year and when seen in the context of regional markets, the values are still discounted," Khurram Schehzad at InvestCap Research noted.
Domestic equity market, he added, offers attractive P/E (Price to Earning ratio) as well as dividend yield when compared with the regional markets. He also called the corporate earnings positive and would pull up the market further, which could ultimately help to bring in the more foreign investment in the market. When asked how the market is receiving the current political and economic situation, Khurram said, "Swat agreement has been received positively by the market." However, the signals and statements emerging from American officials about Pakistan are vitiating the atmosphere that would not be helpful to improve the situation.
Another report adds: The Karachi stock market witnessed a bearish trading session during the week as prevailing security concerns across the country and selling by high net worth individuals prompted profit-taking, analysts said Saturday, according to Daily Times.
The Karachi Stock Exchange (KSE) 100-share index shed 174.08 points or 2.2 per cent to close at 7,620.87 points as compared to 7,794.95 points of the previous week.
Analysts said the market went through intense selling activities during the week as US raised concerns over Pakistan's effort on Taliban policy and investors took discount rate cut by 100bps lower than expectation, terming it as inadequate to reduce liquidity cost in the market. The turnover was recorded at 224.89 million shares as compared with 259.36 million shares of the previous week, showing decrease of 34.47 million shares or 13.29 per cent.
Security concerns arising from Swat valley along with selling pressure from high net worth individuals amid profit taking dampened market sentiments during the week, said Analyst at JS Research Atif Zafar. Moreover, CFS investment declined to Rs 522 million with an average annualised rate of 18.19 per cent.
Since the removal of floor, country' stock market witnessed rapid outflow of foreign portfolio investment because of negative sentiments caused by the imposition of floor mechanism. The amount of capital flight from the capital market was much larger in the beginning of the current year, however the recovery of the market in month of March and April helped to block the capital flight in the shape of inflows in these two months.
"The actual selling by the foreigners is above $500 million. However the buying by the foreigners during the recent months offset the effect," analysts pointed out.
Although, the stock market recovered during the last two months, it has been unable to attract foreign investment because of various issues confronting the country which are keeping the foreign fund managers at bay. The cautious approach of the foreign investors viz-a-viz the local stock market could be gauged from the figures of this week' portfolio investment when they bought $18.8 million in the capital market and sold $25.3 million, thus resulting in net selling of $6.5 million during the week.
Analysts said that major exodus of offshore investors took place in the early part of the current year when market was sailing on the trouble waters after the removal of floor. However the recent months recovery forced them to think otherwise for investment in the Pakistan's capital market. "Values are still very attractive despite the gains of over 2500 points since the start of current year and when seen in the context of regional markets, the values are still discounted," Khurram Schehzad at InvestCap Research noted.
Domestic equity market, he added, offers attractive P/E (Price to Earning ratio) as well as dividend yield when compared with the regional markets. He also called the corporate earnings positive and would pull up the market further, which could ultimately help to bring in the more foreign investment in the market. When asked how the market is receiving the current political and economic situation, Khurram said, "Swat agreement has been received positively by the market." However, the signals and statements emerging from American officials about Pakistan are vitiating the atmosphere that would not be helpful to improve the situation.
Another report adds: The Karachi stock market witnessed a bearish trading session during the week as prevailing security concerns across the country and selling by high net worth individuals prompted profit-taking, analysts said Saturday, according to Daily Times.
The Karachi Stock Exchange (KSE) 100-share index shed 174.08 points or 2.2 per cent to close at 7,620.87 points as compared to 7,794.95 points of the previous week.
Analysts said the market went through intense selling activities during the week as US raised concerns over Pakistan's effort on Taliban policy and investors took discount rate cut by 100bps lower than expectation, terming it as inadequate to reduce liquidity cost in the market. The turnover was recorded at 224.89 million shares as compared with 259.36 million shares of the previous week, showing decrease of 34.47 million shares or 13.29 per cent.
Security concerns arising from Swat valley along with selling pressure from high net worth individuals amid profit taking dampened market sentiments during the week, said Analyst at JS Research Atif Zafar. Moreover, CFS investment declined to Rs 522 million with an average annualised rate of 18.19 per cent.