Foreign Net Selling via SCRA driven down by 15% during last week

October 5, 2018 (MLN): The official data on Specially Convertible Rupee Accounts (SCRA) released by the State Bank of Pakistan has revealed that foreign investors remained net sellers at capital markets for yet another week, i.e. the week ended on September 28, 2018.

Net selling during the week under evaluation came down by 15.2% on a week-on-week basis, from Rs.2.3 billion during the prior week ending on September 21, 2018 to Rs.1.9 billion.

In general, the total sale of securities during the week escalated by more than twice of the earlier sum, as it was recorded at around Rs.12 billion against a sale of 5.4 billion during the week before. Meanwhile, the total purchase of securities through the week stood at Rs.10.2 billion as compared to a purchase of Rs.3.2 billion the previous week, taking a leap of more than thrice the previous sum.

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 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.

As per the official data, the inflow of remittance in the SCRA account was recorded at Rs.3.3 billion during the week, while the outward remittances stood at Rs.5 billion. Compared to the prior week ending on September 21, 2018, remittance coming into the SCRA account by September 28, 2018 took a giant leap of Rs.2.7 billion while those leaving the SCRA accounts grew by Rs.2 billion.

Income from dividends credited into the SCRA account logged in at Rs.325 million, compared to Rs.7 million a week earlier.

Closing position of SCRA accounts were reported at Rs.25.6 billion, up from the Rs.25.2 billion reported a week before.

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