KARACHI, March 3: The Securities and Exchange Commission of Pakistan (SECP) has decided to determine non-resident investors net flows in the local capital market on a daily basis and to pass on the knowledge to the public, the chairman of the apex regulatory body, Razi-ur-Rehman said on Monday.

He revealed that the aggregate foreign investment in the local stock market stood at $4.8 billion on Feb 29, which represented 25 per cent of the free float of scrips in which the foreigners invested; the figure, he said, did not include GDRs.

Presenting a table of inflow and outflow of each day in February, the SECP chief said the total ‘buy value’ stood at $523 million and ‘sell value’ at 399.9 million, leaving net inflow of $123 million.

He observed that of the 652 listed scrips, foreigners had stakes in 327 stocks. More interesting information disseminated by Mr. Razi was that foreign holding stood in excess of 49 per cent of the free float in about a dozen stocks.

Those with such profound foreigners’ interest included: Atlas Engineering Ltd; New Jubilee Life Insurance; Faysal Bank; Premium Textile; OGDC; First Capital Mutual Fund; UTP-Growth Fund; Habib Metropolitan Bank; Kot Addu Power Company; Atlas Fund of Funds and American Life Insurance Co.

The chairman SECP took exception to the accuracy of figures of foreign portfolio investment from other sources such as the Special Convertible Rupee Account (SCRA) maintained by the State Bank of Pakistan.

“Movements in SCRA do not represent the extent of buying/selling being carried out by foreign investors”, he said and explained that a sell/divestment transaction by non-resident was not recognised as an outflow from SCRA unless eventually it flows out of the SCRA and drains out of the economy.

“As we know that foreign investors can freely trade in the shares quoted on the stock exchanges in Pakistan and debt instruments such as, Treasury Bills, Federal Investment Bonds (FBIs), TFC etc., for which purpose those investors were required to open a SCRA with authorised dealer in Pakistan and the account needed to be fed by remittances from abroad,” he elaborated.

Accordingly, by monitoring the movements in SCRA, one could keep track of foreign investors’ activities in (both) local stock market and debt capital market. More of why SCRA does not represent the accurate measurement of inflow and outflow in the equity market, as explained by the SECP chief, is stated above.

The SECP and National Clearing Company of Pakistan Limited (NCCPL) would, he said, determine the amount of foreign investment in the market by utilising the Universal Identification Number (UIN) of each foreign investor.

“Starting March 5, the NCCPL website would be updated with daily numbers of inflow/outflow of foreign investment based on actual trading by foreigners in the equity market,” Mr Razi said.