Net Foreign Selling via SCRA account doubles last week: SBP

September 7, 2018 (MLN): During the week ending August 31st 2018, the foreign investors not only remained net sellers at the capital markets, but the net selling over the week increased by more than double, according to the data on Special Convertible Rupee Accounts (SCRA) released by the State Bank of Pakistan, on Friday.

Increased trading activity via the SCRA accounts comes as no surprise as volumes in the market were subdued in the prior week of comparison ending on August 24, 2018 due to holidays in the country on account of the Eid Festival.

The net sale of securities during the week under review, has been reported at Rs 1.2 billion, against the net selling of Rs 555 million during the week before, up by 117%.

Overall sale of securities by foreign investors increased by 160% or around 6 billion over the previous week, as it has been recorded at Rs 9.7 billion compared to Rs 3.7 billion recorded the week before. Meanwhile, the purchase of securities by foreign investors observed an increase of 168% as it has been reported at Rs 8.5 billion for the week ending August 31, as compared to Rs 3.2 billion purchased in the week before, up by Rs 5.3 billion.

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.

According to the latest statement issued by SBP, remittances coming into the SCRA account stood at Rs 2.8 billion, while those leaving the account were recorded at Rs 3.7 billion. Compared to the prior week ending on August 24, 2018, remittances coming into the SCRA accounts by August 31st 2018 increased by Rs 2.11 billion from the week before, while those leaving the SCRA accounts, similarly rose by Rs 2.17 billion.

Income from dividends credited into the SCRA account stood at Rs.510 million, compared to Rs 92 million a week earlier.

Closing position of SCRA accounts were reported at Rs 27.27 billion, up from the Rs 26.482 billion reported in the week before.

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