KARACHI: The repatriation of profit and dividend by foreign investors surged by 65 percent during the first quarter of this fiscal year (FY21) due to improved corporate sector earnings.
According to State Bank of Pakistan (SBP), foreign investors repatriated some $577 million on account of profit and dividend on their investment in Pakistan during July-Sep of FY21 against outflow of $349.2 million in the corresponding period of last fiscal year, depicting an increase of $228 million.
Economists said that improved financial earnings of the corporate sector have scaled up repatriation of profit and dividend by the foreign investors. They said that the surge in the outflow of profit and dividend reflects that the country’s economy is gradually improving and the foreign investors are getting better margins on their investments in Pakistan. They said that improved profitability on foreign investment will also help to attract fresh foreign investment in different industries.
The detailed analysis showed that major outflow of profit and dividend was witnessed from the Foreign Direct Investment (FDI) and cumulatively some 97 percent of repatriated amount was sent as returns on FDI. With an increase of 70 percent, foreign investors repatriated $ 559 million on account of return on FDI during the first quarter of current fiscal year compared to $ 329 million in the corresponding period of last fiscal year. The repatriated amount of profit and dividend is even higher then FDI inflows arrived during the period under review. Pakistan fetched FDI amounted to $416 million as against repatriated amount of $559 million in July-Sep of FY21. Similarly, outflow of profit and dividend from portfolio investment slightly declined by 14 percent to $17.8 million in the first quarter of FY21 as against $ 20.3 million in the same period of last fiscal year.
The major repatriation was registered from the communication sector where from foreign investors repatriated $118 million in the first three months of this fiscal year. Food sector is ranked second with $84 million outflow. Financial Business is the third largest sector with $84 million repatriated. Month on Month basis, during September foreign investors sent abroad an amount of $169 million including $167 from FDI and $1.9 million as return on FPI.
Copyright Business Recorder, 2020