Stock market: Offshore holdings touch $2.75b
Offshore investors continue to play a key role in the now less-liquid Karachi bourse.
KARACHI:
In spite of the infamous closure of the Pakistan market for more than three months in 2008, offshore investors continue to play a key role in the now less-liquid Karachi bourse.
With local market players facing a severe liquidity crunch amid rising interest rate, the activities of foreign funds have gained utmost importance, with the investment figure reaching $2.75 billion.
OGDCL makes up one-third of foreign holdings
According to a report prepared by Topline Securities, every third available share in the domestic market is owned by a foreigner, of which every third stock is of the Oil and Gas Development Company (OGDCL) – the country’s largest oil and gas explorer.
In the last one year, foreigners’ holdings in OGDCL have jumped from an estimated 400 million shares to over 500 million shares. Thus, out of 630 million free float of shares, approximately 82 per cent are owned by investors living abroad. In 2010, when foreigners’ net buying stood at $525 million, net purchases in OGDCL alone were estimated to be more than $150 million.
Preference for companies selling consumer-related goods
Consumer activity also indicated a preference for companies selling consumer-related goods. Improving rural economy, coupled with the ability to pass on inflationary pressure, compelled offshore investors to accumulate shares in Engro, Unilever and Nestle Pakistan last year.
Foreigners, who had less than 20 million shares in Engro, now hold more than 40 million shares as its subsidiary, Engro Foods, continues to post exceptional growth in sales, while the parent company also expands its urea plant.
Similarly, over the last one year, foreigners’ holdings in Unilever and Nestle Pakistan have crossed $80 million and $20 million, respectively.
Published in The Express Tribune, March 11th, 2011.
In spite of the infamous closure of the Pakistan market for more than three months in 2008, offshore investors continue to play a key role in the now less-liquid Karachi bourse.
With local market players facing a severe liquidity crunch amid rising interest rate, the activities of foreign funds have gained utmost importance, with the investment figure reaching $2.75 billion.
OGDCL makes up one-third of foreign holdings
According to a report prepared by Topline Securities, every third available share in the domestic market is owned by a foreigner, of which every third stock is of the Oil and Gas Development Company (OGDCL) – the country’s largest oil and gas explorer.
In the last one year, foreigners’ holdings in OGDCL have jumped from an estimated 400 million shares to over 500 million shares. Thus, out of 630 million free float of shares, approximately 82 per cent are owned by investors living abroad. In 2010, when foreigners’ net buying stood at $525 million, net purchases in OGDCL alone were estimated to be more than $150 million.
Preference for companies selling consumer-related goods
Consumer activity also indicated a preference for companies selling consumer-related goods. Improving rural economy, coupled with the ability to pass on inflationary pressure, compelled offshore investors to accumulate shares in Engro, Unilever and Nestle Pakistan last year.
Foreigners, who had less than 20 million shares in Engro, now hold more than 40 million shares as its subsidiary, Engro Foods, continues to post exceptional growth in sales, while the parent company also expands its urea plant.
Similarly, over the last one year, foreigners’ holdings in Unilever and Nestle Pakistan have crossed $80 million and $20 million, respectively.
Published in The Express Tribune, March 11th, 2011.