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Foreign investment drops sharply by 34.2 percent - LahoreEstate - 03-19-2009 09:28 AM
KARACHI: Net foreign investment in the country took a deep plunge of $981 million or 34.2 percent to $1.892 billion during the first eight months of the current financial year. The country had received foreign investment worth $2.873 billion in the last financial year.
The inflow of foreign investment into the country continues to decline in the current financial year mainly due to withdrawal of money by foreign portfolio managers. Foreign investors who had put their money in Pakistani stocks in the previous years when there was a boom in our markets pulled out large amounts this year owing to continuous decline in all three stock markets of the country.
According to SBP’s data, foreign investors withdrew $902.3 million they had earlier invested in Pakistan’s securities including government bonds.
This resulted into a net decline in foreign investment although foreign direct investment rose by $5 million or 0.2 percent to $2.794 billion in July-February period of 2008-09. The country had received $2.789 billion in the same months of the last year.
The stock markets have been bearish since April 2008 owing to a multitude of factors including a slump in economy, political uncertainty and deteriorating law and order situation.
The Karachi Stock Exchange 100-share index is now down by 150 percent from its April 18 level of 15,676 points.
Inflow of investment from developed countries was down by 46.4 percent to $1.070 billion during the first eight months of current fiscal year from $1.998 billion in the same period of last fiscal year. But investment flows from developing economies made for the loss. They surged by 43.8 percent to $1.036 billion from $720.7 million last year.
The United States of America continued to be the largest source of foreign investment for Pakistan. We received $382.6 million worth of investment from the US. The second biggest investment came from Mauritius that stood at $295 million. Substantial investment was received from South East Asian countries with $213.7 million from Malaysia, $201.1 million from Singapore, and $52.9 million from Hong Kong. Countries in European Union were also major sources of foreign investment with $124.7 million coming from the UK, $66.5 million coming from Netherlands and $40.6 million coming from Germany. We also received $53.3 million from Japan and $47.6 million from Australia.
http://dailytimes.com.pk/default.asp?page=2009\03\19\story_19-3-2009_pg5_1