Hot money gets Cold Feet as Foreign Investors do about-face in March

April 20, 2020 (MLN): Disinvestment in fixed income securities let the rout as foreign investors pulled USD 1.628 billion out of the country in the month of March 2020.

Government Treasury Bills and Bonds which had seen a steady stream of investment courtesy of a stable currency and high interest rates were hardest hit as the Coronavirus sent shockwaves through financial markets and panicked investors withdrew from risky assets.

According to data published by the State Bank of Pakistan, disinvestment in Debt Securities was to the tune of USD 1.830 billion while investments in equity securities declined by USD 77 million.

Notwithstanding the debacle endured in March, total investment in the country in the FY20 stood at USD 2.375 billion compared to just USD 494.9 million for the corresponding period of FY19.

Foreign Direct Investment stood at USD 278.7 million in March with an inflow of USD 319.80 million and an out flow of USD 41.10 million.

In July – March FY20, Foreign direct investment has increased to USD 2.148 billion compared to USD 905.10 million from nine months of FY19.

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