KARACHI, Feb 21: Pakistan received net portfolio investment of $12.8 million in January despite the fact that the stock market remained bullish all the time naturally providing profit taking opportunities to sellers.

According to the latest statistics compiled by the ministry of finance the largest chunk of this investment ($5.9m) came from Singapore followed by the Switzerland ($3.3m) and the US ($2.1m): Canada and United Arab Emirates also made net portfolio investment of $1.6 million and $1.4 million respectively.

In January 2001 the stock market had seen a net outflow of $20.5 million.

“The market received net foreign portfolio investment even at a time when many were selling for profit-taking shows a rising confidence of foreign investors,” said the Chairman of Karachi Stock Exchange Salim Chamdia. “That the foreign investment has started picking up is evident also from the fact that the UK based Shell Petroleum Co. bought additional shares in Shell Pakistan earlier this month.”

Shell Petroleum Co. of UK purchased $22.3 million additional shares of Shell Pakistan last week. Chairman of Shell Pakistan Farooq Rahmatullah told Dawn that this had increased the share holding of the British giant from 59 to 76 per cent. He said the money was credited into the bank account of Shell Pakistan late last week. Shell Pakistan officials said additional buying of more than 5.7 million shares by Shell Petroleum would help the company do more business.

Top stock brokers say the $22.3 million worth of share buying by Shell Petroleum of UK is likely to boost net foreign portfolio investment in February.

The figures for net portfolio investment may rise further in February also because the stock prices have risen much lesser this month than in January thereby luring more new buyers into the market.

Whereas portfolio investment increased last month it remained negative in first seven months of this fiscal year as a whole. The latest statistics show that portfolio investment in July 2001-January 2002 stood at minus 44.2 million. But that still indicates a recovery trend because in July 2001-January 2001 net portfolio investment was minus 88 million.

Officials say Pakistan also attracted $20.1 million worth of net foreign direct investment in January this year down slightly from $28.3 million received in January 2001.

They say that the country attracted $225 million net foreign direct investment in the first seven months of this fiscal year i.e. between July 2001-January 2002. This is 32 per cent higher than $170 net foreign direct investment received in July 2000- January 2001.

The latest statistics show that the US led the rally of direct foreign investment with $132 million in seven months to January this year followed by the UK ($19.2m) and UAE ($14.6m).

Economic managers hope that the country may end up receiving at least half a billion dollars net direct foreign investment in the entire current fiscal year. They pin their hopes on the recent renewal of insurance through Overseas Private Investment Corporation cover for Americans making investment in Pakistan in particular and improvement in Pakistan’s economic ties with the US and other advanced nations in general.

Top stock brokers say much of the direct and portfolio foreign investment is likely to flow in oil and gas sectors as companies in this sectors including the mightiest Pakistan State Oil are going to be privatized.