By Salman Siddiqui
KARACHI: The foreign capital flight continues although the Morgan Stanley Capital International Barra (MSCI Barra) announced last month to consider reinstatement of Pakistan on its Emerging Index and the domestic political stability was also gaining momentum.
The MSCI Barra is a world-leading provider of equity, fixed-income and hedge fund indices. International investors highly consider its advisory for making investment and divestment in about 23 developed and 27 emerging markets across the world.
The foreigners’ actions at the local bourses show that their speed of exit was increasing with the rise in activities in the local capital markets. Last week, when the Karachi bourse made a record buying-rally and registered a four years highest gain of over 10 per cent in a week, the foreigners made a massive outflow of $31.3 million. “This net selling was the highest since seven weeks and equivalent to cumulative net selling of past five weeks,” observed Atif Zafar at JS Research.
Therefore, they bought shares worth $11.1 million and sold $42.4 million last week (March 16-20). In March alone the overseas investors withdrew about $37 million. Announcing the end of 110-days interim rule of floor-price at KSE in mid of December 2008, the Exchange MD Adnan Afridi had given a rough estimate that foreigners might withdraw a sum of about $400-500 million in the post floor-price rule.
Near to the Afridi’s estimate, the foreigners have divested about $596 million since the day first of 2008 to date. Is this outflow amount an indication that the boundary-wall has come from where the foreign investors are supposed to make a u-turn to stage come back here? While political stability was also coming back to country.
All of the deposed judges have been announced reinstated last week and two-year long lawyers’ movement came to an end. The remaining unresolved part on political front was the restoration of political government in the province of Punjab amid the end of governor rule.
This issue is expected to resolve very soon as well, as one of three major political parties in the province i.e. PML-Q has already announced to sit on opposition benches in the province while remaining two i.e. PML-N and PPP are supposed to have reached some point of understanding on the formation of government there, it is observed.
The question is, has the time come for foreigners to stage come back, with improving political stability and economic fundamentals, and MSCI Barra has also announced to considering the reinstatement of Pakistan in its Emerging Index in the near future.
The answer is not as so simple, as one cannot ignore the terrible events, which are taking place on economic front at world. The mortgage sub-prime issue hit recession at world is yet to reach its saturation point, it is hoped. (The News Report)
KARACHI: The foreign capital flight continues although the Morgan Stanley Capital International Barra (MSCI Barra) announced last month to consider reinstatement of Pakistan on its Emerging Index and the domestic political stability was also gaining momentum.
The MSCI Barra is a world-leading provider of equity, fixed-income and hedge fund indices. International investors highly consider its advisory for making investment and divestment in about 23 developed and 27 emerging markets across the world.
The foreigners’ actions at the local bourses show that their speed of exit was increasing with the rise in activities in the local capital markets. Last week, when the Karachi bourse made a record buying-rally and registered a four years highest gain of over 10 per cent in a week, the foreigners made a massive outflow of $31.3 million. “This net selling was the highest since seven weeks and equivalent to cumulative net selling of past five weeks,” observed Atif Zafar at JS Research.
Therefore, they bought shares worth $11.1 million and sold $42.4 million last week (March 16-20). In March alone the overseas investors withdrew about $37 million. Announcing the end of 110-days interim rule of floor-price at KSE in mid of December 2008, the Exchange MD Adnan Afridi had given a rough estimate that foreigners might withdraw a sum of about $400-500 million in the post floor-price rule.
Near to the Afridi’s estimate, the foreigners have divested about $596 million since the day first of 2008 to date. Is this outflow amount an indication that the boundary-wall has come from where the foreign investors are supposed to make a u-turn to stage come back here? While political stability was also coming back to country.
All of the deposed judges have been announced reinstated last week and two-year long lawyers’ movement came to an end. The remaining unresolved part on political front was the restoration of political government in the province of Punjab amid the end of governor rule.
This issue is expected to resolve very soon as well, as one of three major political parties in the province i.e. PML-Q has already announced to sit on opposition benches in the province while remaining two i.e. PML-N and PPP are supposed to have reached some point of understanding on the formation of government there, it is observed.
The question is, has the time come for foreigners to stage come back, with improving political stability and economic fundamentals, and MSCI Barra has also announced to considering the reinstatement of Pakistan in its Emerging Index in the near future.
The answer is not as so simple, as one cannot ignore the terrible events, which are taking place on economic front at world. The mortgage sub-prime issue hit recession at world is yet to reach its saturation point, it is hoped. (The News Report)
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