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Foreign inflows surge in stock market - The Express Tribune

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A foreign company has begun investing the planned $120 million into its local subsidiary by acquiring its shares from the Pakistan Stock Exchange (PSX), helping the bourse to attract notable foreign investment in the first week of 2022.

“PSX is witnessing foreign investment these days mainly because TRGI (The Resource Group International) is pouring its earlier announced investment of $120 million into TRG Pakistan (TRGP),” Pak-Kuwait Investment Company Head of Research Samiullah Tariq told The Express Tribune.

“The global company initiated the process of injecting the allocated funds in late December,” he underlined.

During the first four sessions of 2022 (Monday-Thursday), the stock market attracted net foreign investment of $24.2 million. Foreigners, however, sold shares worth $30,321 on Friday, according to the National Clearing Company of Pakistan Limited (NCCPL).

During the previous calendar year (2021), foreigners pulled out a net $359 million from the PSX.

In December 2021 alone, the market saw net foreign inflow of $5.3 million. Otherwise, foreign investors remained net sellers during the 2021 and in the past couple of years.

The foreign company “is expected to complete the transaction within the ongoing month of January 2022,” Tariq highlighted.

However, it is pertinent to mention that the local subsidiary’s share price hit the lower limit of 7.5% on two consecutive days (Thursday and Friday), losing a cumulative Rs17.83 in two days to close at Rs105.76 on Friday.

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Foreigners made comparatively high investment of $11.9 million on Thursday and sold stocks worth a nominal value on Friday.

They injected $5.4 million and $5.7 million on Tuesday and Wednesday, respectively, at PSX.

According to a company’s statement sent to PSX on December 20, the board of directors considered the options offered to it by TRGI. Under the conditions, the company could either directly receive (by way of full or partial redemption) share of TRGI’s liquid assets ie cash and certain number of shares of Ibex Limited owned by the international group (liquid assets) or to continue with its investment in TRGI.

“Keeping in view the long-term strategy and objectives, the board of directors decided that the company should choose option two and continue to work towards further maximising value and capital return of its proceeds for the company and its shareholders,” TRGP Secretary Rahat Lateef said through a notice on December 20, 2021.

The company further requested the foreign firm to consider and implement an alternate means of providing direct or indirect value, benefit, and liquidity to the shareholders of TRGP.

In this regard, the foreign company now intends to provide TRGP’s share of liquid assets in a separate wholly-owned subsidiary of TRGI.

Published in The Express Tribune, January 8th, 2022.

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