KARACHI - Portfolio investment in the Pakistani stock markets took a sever blow with foreign investors pulling out $471.5 million in only two months from July to September 5 while cumulative net flow was still on negative territory and further soared to the tune of $227 million, triggering fears in share markets. In August, foreign investors ejected $27.5 million and cumulative inflow in the period under review stood at $19 million. On September 5, the State Bank of Pakistan reported that the net flow of the portfolio investment has landed into negative by $227 million from July to date, which reflects further erosion of foreign investment as it stood negative by $112 million on June, 06 2008. During the period under review, the share markets witnessed cumulative inflow of $244m. The stock market watchers attributed the massive outflow to prolong political uncertainty and deteriorating economic and law and order situation in the country. They are of the opinion if the political conditions remain volatile the investment would continue to wobble and may witness further down grading in the investment. In Pakistan, like any other country of the region, political movements and uncertainty play a vital crucial role and negative role in effecting investment atmosphere in the country. Before judicial crisis erupted on March 9, 2007, the stock markets were robust and showing good results but as the crisis deepened it affected the portfolio investment which may continue to slide further if the government failed to take corrective measure in order to stabilize the political condition in the country, analysts said. A major outflow of portfolio investment had been recorded from the USA, UK, Switzerland, Hong Kong and Australia. According to the State Bank of Pakistan (SBP) data, the USA investors withdrew $284 million, UK $75 million, Switzerland $47 million, Hong Kong $34 million and Australia $12 million during July-08 to September, 5 2008. Capital market analysts said that the gradual but consistent outflow of portfolio investments made negative impact in the stock markets of the country. They said that the local investors happily invest at stock market when they see the portfolio investment pouring in the country. "For us the outflow of foreign investment from stock market is very upsetting," a stock broker said. Analysts said that recent price freeze measures taken by the KSE board to save the members from default have sent bad signal to abroad and as soon as KSE board revokes its recent decisions the current bad situation of portfolio investment will go bad from worst because they are desperately waiting for un-freeze of stock prices to quit the equity markets. Citing the heavy amount of out flow of portfolio investment by different countries from share markets of the country over the last couple of months and continued recession at market coupled with economic crisis, several brokers said and hoped that as Asif Ali Zardari has won the presidential election on Saturday, which offered the investors a glimmer ray of hope that the economy of the country would be stabilized in coming days by injecting substantial funds. Brokers said that Zardari has potentials to arrange the necessary funds to jack up the sinking economy of the country. Brokers were of the view that Zardari had been accused with several unfounded charges in past and now being elected as a president of the country, is the best opportunity for the Zardari to do its utmost to dispel the all negative impressions against him and wash out the allegations as well. "We hold hope that Zardari will manage the much needed foreign inflow to immediately avert the downwards trends in the stock market," brokers said.