KARACHI - Pakistans stock market recorded a net inflow of $272.1 million portfolio investment during the first half (July-December) of current fiscal year compared with $188.3 million in July-December FY09. In terms of growth, portfolio investment increased by 244.5 per cent, which is attributed to higher investment in local equity market by the foreign investors coupled with countrys positive economic outlook and improvement in the status of the local bourse from negative to stable by the international rating agencies during the period under review. Nonetheless, the inflow of foreign investment and foreign direct investment into the country remained under pressure and continued to decline during July-December FY10. The SBP reported on Friday that Pakistan received $1.284 billion worth foreign investment in six months of ongoing fiscal year from $2.162 billion during the equivalent months of FY10, showing 40.6 per cent decline in growth while FDI investment squashed to $1.012 billion from $2.350 billion in Jul-Dec FY10. The total foreign private investment with privatisation stood at $1.322 billion or 39.5 per cent as against $2.186 billion in the same period last year. The contraction in the growth of FDI is owed to global economic slowdown; fall in reinvested earnings, deteriorating law and order situation and prolonged energy crisis. According to the latest break up of foreign investment, the growth in FDI in the most of the economic sectors depicted negative trend except power, construction, food and transport sectors however, telecom, financial and oil and gas exploration sectors witnessed sharp fall in the flow of FDI received by the country during the analytical period. Pakistan had received a total of 91.2 million dollars worth foreign direct investment in power sector during Jul-Dec FY10 from the inflow of 22.4 million dollars in the corresponding months of the last year. The FDI in construction sector increased to $57.7 million in Jul-Dec FY10 as against of $19.4 million reported in same months of preceding year. It may be mentioned here that a series of positive developments also triggered investors to invest into countrys stock market despite its weak law and order and uncertain security condition. Such developments included re-entry of Pakistan index in MSCI frontier index, IMF augmentation of SBA and SDR allocation, and Standard & Poors upgraded Pakistan sovereign rating from CCC+ to B- while Moodys reviewed Pakistan economic outlook and rating from negative to stable. Moreover, like other emerging countries, spread on yield between Pakistan euro bond and US Treasury bond has narrowed, close to the trend but above the rate at date of issue (exceptionally low pre-crises rates).