Outflow from equity, PIBs, T-bills remained three times higher than inflow during October

equity PIBs

The foreign investment outflow in treasury bills, equity, and Pakistan Investment Bonds (PIBs) throughout October was nearly three times higher than the inflow replicating the declining attentiveness of stakeholders on most attractive occasions. 

According to the estimation carried out the collective inflow in the month was $58.5 million while the outflow moved to $178.58 million while the cumulative net outflow during October was $120 million. However, still, October showed the poorest month for the asset in T-bills, equities, and PIBs during the four months of the present fiscal FY22. 

Read more: Pakistan Investment Bonds fail to attract any foreign inflows during July

October’s highest outflow was reported from equity when withdrew of $134.5 million was done against an inflow of $34.2 million by the investors. The treasury bills’ outflow was less than the inflow. The inflow in T-bills during the month was $16.6 million against an outflow of $13.8 million. 

Moreover, the outflows from all three investment options were greater than the inflows in the first four months of FY22 July-Oct. The overall outflow during the four months was $565.9 million besides a net inflow of $304.4 million in the same time period. 

Accelerated outflows from equity, T-bills, PIBs in October

During the four months, the major outflow of $369 million was recorded from the equity compared to a net inflow of $142 million. The outflow harshly injured the equity market in the course of this period. 

Afore Covid-19 in March 2020, the PIBs and T-bills were hot cakes for the overseas stakeholders but they started to leave the country as the pandemic began spreading all over the sphere. 

However, the local investors even show the biggest investment in PIBs representing the lure of higher returns on it. Banks are the main savers in the two papers as they catch cool to earn risk-free income. 

While some bankers consider that the higher outflow and low inflow in the government credentials were because of reservations on the exterior fronts of the economy. According to them, in spite of healthier foreign exchange reserves, Pakistan had been passing through destabilization of the exchange rate system. Bankers believe that the damaged exchange rate does not give assurance to foreign investors and they shun risking their currency. 

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