Offshorers stock $11.9mn shares

KSE during last week

Local individuals eject $15mn

Ghulam Raja Rajani

KARACHI: With the growing confidence of offshore investors and new allocation of fund from abroad, $11.9 million worth of net portfolio investment was seen in Pakistan equity market in the first week of New Year, as per the National Clearing Company of Pakistan Limited (NCCPL) data.

During the week, foreign investors remained on the buying side as they bought shares worth $22.69 million and sold share valuing $10.8 million.
Furthermore, biggest buying was seen from banks which bought shares worth $22.3 million. Similarly, other organisations and NBFC remained on the buying side with shares worth $2.60 million and $0.27 million.
On the other hand, biggest weekly selling was witnessed from local individuals, which offloaded $253.31 million of shares in the local bourse against the buying of $238.3 million, thus turning the net selling worth of $15.01 million.Moreover, companies and mutual fund also joined local individual’s trend as they net ejected $11.21 million and $10.85 million respectively.

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Foreign portfolio up at $2.9bn

KSE during CY10: foreigners hold 32pc of free float

Offshorers invest $522 million

Ahmed Siddique

KARACHI: Total Investment value of foreign portfolio significantly hiked by 53.2 per cent or $1.02 billion to $2.93 billion at the end of year 2010 against $1.92 billion witnessed on year-end 2009.

Rise in portfolio investment in CY10 driven by fresh investment of $522 million and value of equity appreciation of around $490 million. In terms of rupee, special convertible rupee account (SCRA) showed closing market value of shares and securities at Rs 252 billion against Rs161 billion observed on same period last year, thus reflecting 56.4 per cent jump in portfolio value during the period.
As per “The Financial Daily” analyst, foreign investors own $2.93 billion which is 32 per cent of the free float market capitalization on above date. The main reasons for surge in foreign holding value were significant hike in equity market as it surged by 28.1 per cent or 2,636 points to close at 12,022-level at the end of December 31, 2010 comparing with the index stood at 9,387 points at the end of the year 2009.

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Posted in: Ahmed Siddique,billion,buying,cent,end,Foreign,investment,investors,KSE,net,Offshorers,rupee

Offshorers pour $0.5bn into KSE

Foreigners hold shares worth $2.9 billion

KARACHI: One thing which was interesting at a time of crisis in Pakistan, led by ferocious floods, is the continuous foreign buying in local stock market. Though local investors remained bearish on the market due to liquidity crunch amid huge borrowing by the government, it was the foreign inflows that saved Pakistani market in the outgoing year.

Compared to the net buying of only $24 million in 2009, foreigners in 2010 bought shares worth $1.2 billion and sold $0.7 billion with net buying of $0.5 billion.
High government borrowing is crowding out private investment in Pakistan and local investors prefer to park their funds in risk free government papers or high yielding bank deposits.
In 2010YTD, local companies sold shares worth $168 million on net basis whereas local mutual funds sold $127 million worth of shares. As per the research analyst of Topline Securities, offshore funds now hold shares worth $2.9 billion as of December 17, 2010 which is 8 per cent of the market capitalisation and 31 per cent of free float. He said at the beginning of 2010, their share in overall market cap was 6 per cent and 23 per cent of market free float. Their peak holding was $5.1 billion (27 per cent of free float) in April 2008 and lowest was $1 billion (17 per cent of free float) in March 2009, he added. With no big IPOs in the near future, foreigners share in local bourses will continue to increase. With imposition of capital gain tax, individuals who mostly square their position within a day, their average share in December 2010 declined to 45 per cent compared to approx 57 per cent in January 2010. However, during this period foreign participation increased to 6 per cent as compared to only 3 per cent at the beginning of the year. Foreign participation in local market will remain robust next year due to ample liquidity in the global markets for high risk emerging and frontier countries. With Pakistan market trading at 50 per cent discount to regional market on PE multiples against historical average discount of 30 per cent will compel offshore investors to focus more on Pakistan than other regional markets for better returns amid new phase of quantitative easing (QE2).

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