Pakistan's July-Feb foreign investment rises 27 pct

KARACHI, March 15 (Reuters) - Net foreign investment in Pakistan rose 27 percent to $1.23 billion in the first eight months of the 2010/11 fiscal year, because of a sharp rise in foreign portfolio investment, the central bank said on Tuesday.

Foreign investment was $969.5 million in the same period last year.

Foreign direct investment fell 21.8 percent in the July-February period to $989.6 million, from $1.26 billion in the same period last year, the State Bank of Pakistan said.

A shaky security situation, a Taliban insurgency in the country's northwest and chronic power shortages have put off long-term investors, analysts say.

However, with emerging markets on the radar of fund managers, Pakistan has seen a flow of foreign investment in the country's main stock exchange.

Foreign portfolio investment rose 182 percent to $242.1 million in the first eight months of 2010/11, compared with an outflow of $295.3 million in the same period last year.

An International Monetary Fund (IMF) emergency loan package agreed to in November 2008 helped Pakistan avert a balance of payments crisis and shore up reserves.

It received the fifth tranche of $1.13 billion of the $11 billion loan in May 2010. Pakistan and IMF authorities are scheduled to meet before June 30 to discuss the release of the sixth tranche. (Reporting by Sahar Ahmed; Editing by Chris Allbritton)