Foreign net selling via SCRA drops by 36.7%

October 11, 2018 (MLN): Foreign investors remained net sellers at the capital markets during the week ended October 5, 2018, reveals official data on Specially Convertible Rupee Accounts (SCRA), released by the State Bank of Pakistan (SBP).

The net sale of securities during the week under assessment dropped by Rs.705 million over the prior week, slipping from a net selling figure of Rs.1.92 billion to Rs.1.2 billion, reported the data.

The overall sale of securities by the foreign investors during the week declined by almost half as it came down from Rs.12 billion to Rs.6.2 billion, demonstrating a fall of 49%.

Meanwhile, total purchase of securities by foreign investors decline by 51% as well after being recorded at Rs.5 billion against a purchase of Rs.10.2 billion during the previous week.

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 SBP’s latest statement on SCRA, the flow of remittances into the SCRA stands at Rs.2.2 billion while the remittance flowing out are recorded at Rs.3.6 billion. As compared to the week ended September 28, 2018, the inflowing remittances have dropped by Rs.1.1 billion while those leaving the SCRA have come down by Rs.1.5 billion.

Income from dividends credited into the SCRA account stands at Rs.510 million, compared to Rs.325 million a week earlier.

Closing position of SCRA accounts were reported at Rs.25.9 billion, up from the Rs.25.6 billion reported a week before.

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