KSE-100 index jumps 3 per cent in July

The infusion of foreign funds into Pakistan's equity market has boosted the benchmark Karachi Stock Exchange-100 index by 3 per cent in July, helping the foreign portfolio investment touch USD 6 billion.
Overseas investors have bought shares worth a net USD 648 million this year.
"The interest in the local shares has been increasing in the seven months this year and in July alone foreign buying totalled USD 68 million," Haseeb Ahsan of Capital Investments said.
He said net foreign buying had provided investors with a cumulative gain of 21 per cent in first 7 months of 2014.
He noted that in dollar terms, the Pakistan's equity market had provided gain of 27 per cent as a result of currency appreciation.

The returns, so far, have placed Pakistan among the top 10 performing stock market for the third consecutive year.

Vahaj Ahmed at Topline Securities said foreigners were long-term investors but put more cash into equities in July.
"But local institutional and individual investors remained mostly on the sidelines perhaps because of the political uncertainty generated due to the possible conflict between the government and some political parties determined to hold rallies on August 14," he said.
According to details, During 2014YTD (Jan-July), foreign investors bought equities worth USD 1.7 bn and sold USD 1.1 bn, resulting in a net inflow of USD 648 mn (including USD 311 mn participation in United Bank Limited (UBL)'s secondary offering).

The amount has been adjusted against the official data of National Clearing Company of Pakistan that does not include UBL offering since it was not invested through the stock exchange.
"This amount compares favourably with USD 398 mn net buying in 2013 and USD 126 mn net buying in 2012," Ahmed said.
In a recent report, the investment analyst mentions that following the secondary offering of United Bank (UBL) in June 2013 in which major portion was bought by offshore investors, foreign portfolio investment in Pakistan reached USD 6 bn, according to official data, which surpasses the previous highest foreign investment of USD 5.1 bn seen in the bull-run in April 2008.

Foreigners now hold 34 per cent free-float or 8 per cent of total market capitalisation against 27 per cent free-float and 7 per cent total market cap in April 2008.
Another study suggests that foreign investors' (sponsors plus portfolio investors) hold around 29 per cent of equity in the Top 25 listed companies.
The government, with 35 per cent stake in the equity market, remains the largest shareholder, while 23 per cent shareholding vests with local institutions and 13 per cent with retail/high net-worth investors.