Foreign divestment in T-bills reaches $256m in Oct

Pakistan’s capital market witnessed a major outflow of hot money during the month of October 2020 as foreign investors divested $268.9 million in the government’s short-term papers  (T-bills) against the inflows of $12.53 million, resulted in net divestment of $256.34 million, reveals the statistics gathered by the State Bank of Pakistan (SBP).

Contrary to the T-bills, the long-term instruments (PIBs) did not record any outflow during the month, with the inflows stood at $12.69 million, according to a report compiled Mettis Global.

This suggests that the combined inflow of foreign funds invested in T-bills and PIBs amounted to $25.2 million in October 2020 with outflows recorded at $ 268.9 million, thus, the net outflow in government securities during the month clocked in at $243.66 million. Whereas, in the previous month, government-backed securities witnessed net inflows of $3.12 million.

On the equity front, Pakistan Stock Exchange has also observed outflow of $88.37 million against the inflow of $41.5 million during the month. This has brought the overall net divestment (T-bills, PIBs and Equity) to settle at $290.54 million for the month under review.

During the month, the outflows in government securities (T-bills) were largely driven by the overseas investors from the United Kingdom and Bahrain with the former accounting for $260.68 million while outflows from the latter clocked in at $5 million.

Cumulatively during 4MFY21, total hot money inflows in the T-bills amounted to $126.75 million.

However, outflows during the period have reached $435.7 million, bringing net divestment in the short-term instruments to $308.95 million.

With regards to PIBs, the total foreign inflows during Jul-Oct 2020, has been at $22.86 million, with zero outflows recorded.

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Monitoring Desk
Monitoring Desk
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