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Foreign portfolio out flow gains momentum

ISLAMABAD: Outflow of foreign portfolio investment gaind slight momentum in January 2000 as UKand US-based investors alone withdrew $14.4 million during the month.

The negative portfolio investment came coupled with net outflow of $11.2 million worth of foreign direct investment in financial business in Pakistan.

State Bank of Pakistan's latest figures of foreign private investment released on Saturday show UK-based investors to be the most jittery among foreign portfolio investors as they withdrew a total of $184.6 million, on balance, between July 1997 and January 2000.

Total outflow of portfolio investment in Pakistan during the seven months to end of January 2000 was recorded at $34.6 million, up from $29.4 million at the end of December 1999.

Foreign direct investment figures also took a blow during January 2000. Net foreign direct investment during the month was down to $12 million, less than a quarter of $55.3 million during December, 1999.

Net outflow of $11.2 million under the head of 'financial business' came out as the major culprit in the drastic fall over the month of foreign direct investment.

Total foreign direct investment in Pakistan during the seven months to January 2000 was recorded at $318 million, sugggesting the possible arresting of the last three years' trend of falling foreign direct investment. Pakistan saw a total foreign direct investment of $472.3 million during fiscal 1998-99, down from $601.3 million in 1997-98 and $682.1 million in 1996-97.

The gradual fall in foreign direct investment came right on the heels of foreign direct investment peaking to historic high of $1101.7 billion in 1995-96. Bulk of this figure reflected investment in the independent power projects.ÑFortuna