KARACHI - Portfolio investment in the Pakistani stock markets faced a severe blow as the outflow of this investment increased to US$486 million from July to September 10, 2008. While cumulative net flow was still in the negative territory and further soared to the tune of US$231 million. In the first 10 days of September-08, foreign investors had ejected US$42 million and cumulative inflow in the period under review stood at US$30 million. While during four days from 5 to 10 September the foreign investors pulled out another US$15mn from the equity markets. The foreign investors are gradually pulling out their stake from Pakistani stock markets from July 2007. In almost two months, from July to September 10, 2008, the stock market reflects a cumulative inflow of 255 million and outflow of 486 million dollars worth foreign investment. 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 $293 million, UK$77 million, Switzerland$47 million, Hong Kong $35 million and Australia $12.4 million during July-08 to September, 10 2008. Brokers and analysts attributed the massive outflow to prolong political uncertainty and deteriorating economic and law and order situation in the country. They held the same view that the prolong political uncertainty that gripped on the country over the last six months had undercut the confidence of local and foreign investors, resulted stock markets under went huge losses. 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. Analysts and brokers said that all eyes are now on the efforts of President Asif Ali Zardari to prop up the sinking economy of the country, brokers added and saying that we were in hope that President Asif would manage the inflows of substantial foreign funds to restore the confidence of local investors. Analysts said that recent decision of KSE board to further continue the floor mechanism has given bad signal to the foreign investors and magnify their troubles.