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This New Emerging Market Can't Seem to Lure Foreign Funds

  • Foreigners have pulled $194m from Pakistan stocks this year
  • Elections in 2018 slowing reforms and economy deteriorating
A trader is reflected against the trading hall of the Karachi Stock Exchange in Karachi, Pakistan, on Wednesday 08 May, 2013. Pakistan is to hold parliamentary elections on May 11, according to opinion polls Nawaz Sharif of the Pakistan Muslim League-N (PMLN) leads Imran Khan of Pakistan Tehrik-e-Insaf (PTI) to replace Asif Ali Zadari and become Pakistan's 12th President.
Photographer: Asim Hafeez/Bloomberg
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As foreign funds pile into this year’s risk rally, one of the world’s newest emerging markets is missing out on the action.

Pakistan may be preparing to celebrate the imminent inclusion of its stocks in MSCI Inc.’s emerging-market index this month, yet overseas money is draining away. Foreign funds have sold a net $194 million this year, adding to outflows of $334 million in 2016. While Karachi’s benchmark KSE100 Index has risen 2 percent, the MSCI Emerging Markets Index has jumped 14 percent.