KARACHI, April 17: The country is losing charm for foreign investors as both direct and portfolio investment fell sharply during the nine months of the current fiscal year.

The State Bank reported on Tuesday that foreign private investment fell by 64.7 per cent during July-March 2012. In terms of dollar, the investment fell by $946 million during this period.

The country has been in problem, especially in the eyes of foreign investors who gradually left the country or minimised their investment owing to law and order situation.

Many analysts believe that ties with US matter more than anything else, particularly in the case of foreign investment.

Observers believe that relations with the US in the previous decade helped achieve economic growth, and normalisation of relations would encourage investors.

The country hopes to receive about $1.2 billion as coalition support fund from US this year but it depends on normalisation of relations between the two countries.

According to SBP, foreign direct investment (FDI) fell by 48.2 per cent to $599 million compared to $1157 million received during the same period of last year.

The FDI is limited to a few sectors like power generation, exploration of oil and gas and telecommunications.

The portfolio investment is more disappointing since there is an outflow of $388 million compared to an inflow of $305 million during the nine months.