Hot Money: Au revoir

July 20, 2020 (MLN): Risk-averse foreign investors have once again started selling their holdings in government denominated debt securities particularly T-bills, as net $26.667 million of outflow has been recorded so far this month.

Most of these outflows were observed in the last two sessions, in which foreign investors collectively took out $36.125 million from government short term debt instrument (T-bills), in addition, these inflows had been withdrawn by UK investors.  

Meanwhile, it is pertinent to note that there was a T-bill Maturity last week, after which risk-averse investors seemed reluctant to reinvest on account of higher risk and lower return.

With regards to equity, Pakistan Stock Exchange has also observed foreign selling during the month as international investors have extracted $64.2 million so far against the injection of $15 million, bringing the net outflow to stand at $49.2 million.  

Moreover, it is worth mentioning that foreign investors also bought $5 million worth of Pakistan Investment Bonds (PIBs) during the month. This suggests that overseas investors have pulled out around $78.4 million worth of their holdings in domestic securities against the inflow of $27.29 million from July 1, 2020 to date.

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