November 29, 2006	Wednesday	Ziqa'ad 7, 1427

KARACHI, Nov 28: Foreign portfolio investment in the stock market witnessed negative trend during November 2006 as compared to record inflow of $215.3 million in October 2006.

Official data released here on Tuesday showed that the inflow of foreign portfolio investment during the first four months (July-October) of the current fiscal had been highly encouraging at $312.3 million, but the current month (up to Nov 27) saw a net outflow of $32.9 million reversing the trend.

Analysts believed that the forensic probe report into March 2005 stock market crash prepared by US experts and widely discussed in print and electronic media was the main reason that had sent red signals triggering outflow of foreign portfolio investment.

“This is a hyper sensitive market and investors used to remain extremely cautious. The much talked probe report and issuance of notices to 88 brokerage houses were enough to break the trend of portfolio inflows,” said an analyst.

Further details showed that the United Kingdom withdrew its investment heavily during November 2006. In fact it was more than the total outflows during the month. The outflows of UK investment were in the tune of $36.1 million. However, the United States kept pumping dollars and $10.4 million were poured in the shares market.The other significant disinvestments were from Singapore which withdrew $6.7 million and Hong Kong $2.4 million. The United Arab Emirates however injected $2.9 million in the share market during November 2006.

The main attraction for foreign investors was the booming banking and oil sector loaded with potential to grow. Analysts said these attractions were still there and the next few months could receive more portfolio investments.

They were of the view that Pakistan would achieve its economic growth target in the backdrop of falling world oil prices.