Drop comes despite attractive share prices compared to regional markets
Foreign investment in the Pakistan Stock Exchange (PSX), one of the best performing Asian markets, halved to Rs454 billion in the past four years despite share prices becoming more attractive compared to those in other emerging markets.
The latest pullout of foreign investment may be attributed to the third wave of the Covid-19 pandemic in Pakistan as overseas investors became net sellers in the past 13 consecutive weeks, which ended on Friday, April 16. Earlier, they continued to exit the market following hefty depreciation of the rupee against the US dollar, low foreign currency reserves and a high inflation reading, all of which put foreign investment at a high risk, said BMA Capital Executive Director Saad Hashmi.
Speaking to The Express Tribune on Friday, he remained optimistic that foreign investors would make a comeback to the local bourse as their primary concerns were addressed with the foreign currency reserves hitting a four-year high at $16 billion. In addition, the rupee recovered to Rs153 against the US dollar and economic activities picked up in recent times, he said.
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