KARACHI, Nov 8: In four trading days of the current week on the Karachi Stock Exchange, foreign investors withdrew around $185 million from equity and $50 million from government bonds.

A senior fund manager, who provided these figures on condition of anonymity, said that the foreign selling flowed out like an avalanche sweeping away more than 5 per cent off the prices of some of the leading banks and insurance companies.

From Monday to Thursday, market capitalisation of insurance and banking sectors declined by 6.5 per cent and 5.2 per cent, respectively.

Figures of possible outflow during the four trading days of mayhem at the market, prompted by political events, varied from analyst to analyst, but most of them thought that it could hardly have been below $160 million.

Since the aggregate foreign portfolio investment stands at $850 million (excluding those in GDRs), the outflow was a substantial 20 per cent of the overseas equity investment, traders said.

“Both Moody’s and S&P have downgraded Pakistan’s credit rating outlook from stable to negative,” says a trader, which could not have lured fund managers to remain in the Pakistani equity market, in spite of its attractive valuations.

Overall, the KSE-100 index shed 491 points during the week. Volatility on Thursday, like the day earlier, was exceptionally high with the index oscillating 311 points between the low and high for the day.

In the absence of credible real-time news about the market from an independent source due to the blackout of private television channels, most healthy and wealthy investors behaved like blind men in a dark room. They had solely to rely on their stockbroker picking up the phone in order to know what the value of scrip at the time was. Until the prayers of the investors were answered and the broker was free to attend to the call, the share may have dived by several rupees leaving trail of losses in its wake.

The rumourmongers could not have had a better time. On Monday, the news of topple at the top, caused a bloodbath at the market with the index showing the heaviest ever single-day decline of 636 points. With the real-time source of news firmly gagged, the denial from Islamabad on Monday moved at the pace of the post office to reach the bourse only after the end of the trading time.

The same evening, the frontline regulator, the Securities and Exchange Commission of Pakistan vowed to ‘investigate’ and bring the rumourmongers to book. Yet, the fact that nothing more had been done until Thursday and given the dismal record of previous investigations, crime and punishment, small investors who lost money could scarcely do more than nurse their wounds.