KARACHI, Aug 1: Flight of portfolio investment continued during the very first month of the new fiscal year 2008-09, reflecting the lack of confidence of investors in the market.The flight of portfolio investment during July was about $150 million, a massive outflow described by the brokers.

The disinvestment in the stock market was one of the major reasons for the country’s inability to meet the current account deficit.

Despite the uncertain political situation and poor performance of the economy, the inflow of foreign exchange as foreign direct investment (FDI) crossed the last year’s total, though with a very thin margin.

During 2007-08, the FDI reached $5.152 billion, higher by $13 million compared to last year’s FDI.

However, the portfolio investment, which was $3.288 billion last year, could hardly touch a figure of $40 million. This performance damaged the country’s ability to improve its external account position.

“It is not a good start as the inflow of portfolio investment has been helping the country to meet its dollar demand,” said an analyst.

He said the attraction for foreign investment was on decline as the stock market’s performance was 18-month low on Friday, which would further shake up the investors’ confidence.

Foreign interest may emerge if the domestic investors show confidence and improve their