Foreign Net Selling via SCRA drops by 16.6 percent

October 25, 2018 (MLN): According to the official data on Specially Convertible Rupee Accounts (SCRA) released by the State Bank of Pakistan (SBP), foreign investors remained net sellers at the capital markets during the week ended October 19, 2018. 

The net sale of securities during the week under review decreased by Rs.500 million over the prior week, dropping from a net selling figure of Rs.3 billion to Rs.2.5 billion, as per the data.

The total sale of securities by the foreign investors during the said week dropped from Rs.11.3 billion to Rs.8.2 billion, demonstrating a decline of 27.5%.

On the other hand, total purchase of securities by foreign investors decreased by 31.5% as it dove from Rs.8.3 billion in the preceding week to Rs.5.7 billion during the week under review.

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.

The flow of remittances into the SCRA stands at Rs.1.4 billion whereas the remittances flowing out are estimated at Rs.4.6 billion. As compared to the week ended October 12^th, 2018, the inflowing remittances have dropped by Rs.604 million while those leaving the SCRA have dropped by Rs.601 million.

Income from dividends credited into the SCRA account amount to Rs.720 million, compared to Rs.586 million a week earlier.

Closing position of SCRA accounts is reported at Rs.26.19 billion, slightly down from the Rs.25.2 billion reported a week before.

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