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Foreign net selling from SCRA accounts hits five month low

Foreign investors remain net sellers in the capital markets for the week ending August 24, 2018, but with a marked reduction in net selling over the week ending August 17, 2018, according to data on Special Convertible Rupee Accounts (SCRA) released by the State Bank on Thursday.

Even though foreign investors continue to be net sellers in the week ending on August 24, the net selling witnessed a decline from last week as the net sale of securities has been reported at Rs 555 million against a net selling of Rs 2.165 billion during the week before, a decrease of about 74% from the net selling in the prior week.

According to the State Bank of Pakistan, this has been the lowest net selling for a given week since March 16, 2018. Part of the reason in the decline of trading in securities during the concerned week has to do with across the nation holidays on account of the Eid Festival.

Overall sale of securities by foreign investors decreased by 36% or close to Rs 2 billion over the previous week after being recorded at Rs 3.711 billion compared to Rs 5.802 billion a week before, while the purchase of securities by foreign investors also decreased by 13.2%, or Rs 481 million after being recorded at Rs 3.156 billion compared to Rs 3.637 billion in the week before.

Special Convertible Rupee Accounts cater to the needs of non-resident investors, who wish to trade freely in the shares quoted on the Stock Exchange of Pakistan.

Operation of SCRA accounts is up to an extent of remittances received from abroad or by transfer from a Foreign Currency Account maintained by non-resident investors in Pakistan.

The balance available therein can be used for the purchase of any shares quoted on the country’s secondary markets i.e. Pakistan Stock Exchange. The disinvestment proceeds against the sale of previously purchased shares through SCRA can be credited in this account, in addition to dividend income against the shares held by non-resident investors.

The funds available in such accounts can be transferred outside Pakistan or credited to a foreign currency account of non-resident investor maintained in Pakistan at any time without prior approvals of the State Bank of Pakistan.

According to the latest statement issued by SBP, remittances coming into the SCRA account stood at Rs 712 million, while those leaving the account were recorded at Rs 1.572 billion. Compared to the prior week ending on August 17, 2018, remittances coming into the SCRA accounts by August 24 fell by Rs 146 million from the week before while those leaving the SCRA accounts, similarly fell by Rs 2.1 billion.

Income from dividends credited into the SCRA account stood at Rs 92 billion, compared to Rs 118 million a week earlier.

The closing position of SCRA accounts was reported at Rs 26.482 billion, down from the Rs 26.734 billion at the beginning of that week.

Copyright Mettis Link News

Posted on: 2018-08-31T15:25:00+05:00

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