KARACHI: With the approach of autumn, stocks at the Karachi Stock Exchange have already started to shed values.

In the month of October, KSE-100 index pulled back by 2 per cent, after rising for three months in a row.

Security concerns, combined with a slowdown in inflow of foreign portfolio investment, were major factors that put brakes on the runaway stock prices.

‘Offshore investors bought and sold shares worth $129m and $91m, respectively, which meant net buying of $38m during October,’ says Mohammad Sohail, CEO at Topline Securities.

This compares unfavorably with the foreign portfolio data of the preceding two months.

In August, foreign investors bought stocks valued at net $95 million. And during the month of September, the foreign funds’ interest in Pakistani equity was at its peak, with net inflows of $128 million—the highest figure for a single month this year.

But it is not just the local stocks; the Wall Street investors turned their backs on the entire emerging market during the month.

‘The inflows in all leading emerging and frontier markets slowed down in October,’ says the analyst.

He pointed to the Mumbai bazaar which was able to attract net foreign inflows of $2.3 million, down from $3 billion the month earlier.

Analysts keeping tab on the dollar inflows in portfolio investment calculate that Pakistan has witnessed net foreign buying of $6.8 million to date this year.

It still needs to cover a lot of lost ground as outflow in the confusing 2008 was no less than $442 million.

KSE was eased out of the Emerging market and clubbed with the Frontier markets by the international investment community following the distaste over the senseless 100-day ‘floor’ at the KSE, which allowed them the exit only through a heavily discounted ‘off-market’ trade.

But even globally, the stock markets took a breather after an incessant run for over six months since March this year. The MSCI World Index increased but marginally by 0.16% in October.

The MSCI Frontier Market Index, of which Pakistan is a part, eroded 2.8 per cent in October after seven consecutive months of gains. Similarly MSCI Asia ex Japan fell 1.66pc during the month under review.

The KSE has already marched forward by over 4,200 points, representing gain of 56 per cent in nine months of this calendar year. It is a steep climb from the depth of 4,815 points on Jan 26. But the index needs still to claw up by 42 per cent to reach its all time high level of 15676 points. Except for the security concerns, most market participants do not look fearful over the 850 points decline in the last few days of October.

‘Stock market as everyone knows is a barometer of country’s economy,’ says one optimist at the market.

‘If the macro-micro indicators are shining bright, there is no reason for the mercury in the barometer to stay cool,’ he says.