Foreign investors pump $31.6m into Pakistan stock market in December via SCRA

January 08, 2024 (MLN): The Pakistan Stock Market continued to witness increased confidence from foreign investors, registering a significant net inflow of $31.6 million in December through the Special Convertible Rupee Account (SCRA), as per official data from the central bank.

SCRA allows foreign persons, institutions, and non-resident Pakistanis to invest into various instruments such as equities, government bonds, and TFCs.

Under this scheme, the funds are converted into Pakistani rupees and credited to the depositor's "Special Convertible Rupee" account.

In December, SCRA recorded inflows of $65m, while a total sum of $33.36m was withdrawn, resulting in a net inflow of $31.72m.

Breaking down the data, the majority of capital, $31.61m, was invested in equities, while $103,400 was invested in 'other' categories. Notably, there were no investments in T-Bills or PIBs via SCRA in December.

Country-wise, the United States was the largest contributor with a net inflow of $33.97m.

This was followed by the Cayman Islands, Sweden, and Canada, injecting $4.85m, $1.87m, and $1.44m, respectively.

On the flip side, the United Kingdom, the United Arab Emirates, Mauritius, and Switzerland were the net sellers, recording net outflows of $3.09m, $2.44m, $2.15m, and $1.2m, respectively.

The benchmark KSE-100 index rallied around 55% in 2023 amid hopes of improved economic conditions following the expected inflows from IMF and friendly countries, relatively stable currency, and bets on interest rate cuts in 2024.

The Pakistani Rupee (PKR) has remained stable over the past few months. In the current financial year, the PKR has appreciated against the US Dollar by 4.59 rupees or 1.63%.

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