KARACHI - The portfolio investment in the equity markets has been wiped out as the

foreign investors have gradually pulled out their stakes from Pakistani stock
markets amid growing political uncertainty that gripped the country over the last six
months and deteriorating law and order situation of the country.
The data issued by State Bank of Pakistan on Thursday revealed that the net flow of
the portfolio investment remains negative by US$180 million from July to August 20,
2008, which reflects elimination of foreign investment from the stock markets.
The data of portfolio investment reflects net outflow of US$374mn and inflow of
US$193mn during the above-mentioned period.
According to the data, net flow of portfolio investment during the twenty days of
current month turned negative by US$30mn and outflow of US$114mn.While net
inflow recorded at US$83mn.
A major outflow of portfolio investment had been recorded from the USA, United
Kingdom, Switzerland, Singapore and Hong Kong.
According to the State Bank of Pakistan (SBP) data, the USA investors withdrew
$217mn, UK$64mn, Switzerland $38mn, Hong Kong $27mn and Singapore $11mn
during July to Augusts 20, 2008.
Commenting on the continued outflow in the equity markets, brokers and analysts
said that stock markets of the country have been witnessing highly volatile and
bearish trading sessions over the last four months on the back of prolong political
uncertainty and economic crisis, which have not only shattered the confidence of
local investors but forced the foreign investors to make a swift exit from the
Pakistani equity markets.
Brokers said after the resignation of President Musharraf on Monday, they started to
hope that the dust on political front would be settled down but disputes over the
reinstatement of deposed judges came as an another crushing blow for the stock
market, as the market had taken a strong pull back following the resignation of
President by gaining more than 600 points in two days, lost it in next three days as
soon as the issue took its toll and voices of rifts echoed in the coalition partners.
“Total volumes of the stock market are still showing gloomy picture, which
shows the interest of investor and foreign investors are always attracted by the high
volumes,” analysts said.