Heavy selling was witnessed at the Pakistan Stock Exchange (PSX) by foreign portfolio investors which sold $35 million worth of shares in January 2024.

“This is the highest net selling by foreigners at PSX after 12 months,” said Topline Securities, a brokerage house, in a note on Wednesday.

The brokerage house added that recent above-average selling of $35 million in January has raised some concern amongst investors especially when the market was waiting for a pre-election rally.

“As per our channel checks, leading global ETF has been the biggest seller in the market,” said the brokerage house.

Topline said that on January 19, Global X ETFs, the New York-based provider of exchange-traded funds, announced the scheduled liquidation of the 19 ETFs including Pakistan ETF, based on an ongoing review process of its product lineup to ensure it meets the evolving needs of its clients.

“At the end of December 2023, this ETF had an investment of $33.23 million in Pakistan. And now based on January 30, 2024 data this ETF holding in Pakistan has come down to $2.3mn.

“Based on these numbers, the selling by this fund is almost over. Thus, this reduction in the size of this ETF has been a major portion of foreign corporate selling seen at PSX in last few weeks,” it said.

Lately, renewed interest was seen by foreign portfolio investors at the local bourse after Pakistan successfully managed to ink a last-minute $3-billion Stand-By Agreement (SBA) with the International Monetary Fund (IMF) last year in June.

“In the 6 months (July to December 2023) foreign corporates bought shares worth $239 million and sold $164 million at PSX, resulting in net buying of $75 million,” said Topline.

“This was the highest inflow after eight years.

“IMF loan, stable PKR and strict measures taken by the caretaker government played a major role in this inflow at PSX,” added Topline.