KARACHI: Foreign investors repatriated some $892 million abroad on account of profit and dividend during the first half of this fiscal year (FY21).
With some improvement in the economic activities, the repatriation of profit and dividend by foreign investors is gradually increasing. It rose by 7 percent in July-Dec of FY21.
The higher outflow of profit and dividend also reflects that Pakistan’s economy is performing well and can produce better margins for foreign investors, analysts said.
According to the State Bank of Pakistan (SBP), foreign investors repatriated some $ 892.3 million on account of profit and dividend during the first half of this fiscal year as compared to $ 836.3 million during the same period of last fiscal year (FY20), depicting an increase of $ 56 million.
The detail analysis revealed that major outflow of profit and dividend was witnessed from the Foreign Direct Investment (FDI) and cumulatively some 94 percent of repatriated amount was sent as returns on FDI. Repatriation on account of FDI posted 13 percent increase, while repatriation from Foreign Portfolio Investment (FPI) recorded 44 percent decline during the period under review.
Repatriation of profit and dividend on account of return on FDI was surged by $ 97 million to $ 840.1 million during the July-Dec of FY21 versus $ 743.2 million outflow in the corresponding period of last fiscal year.
The repatriation of profit and dividend on account of FDI is lower than overall FDI that arrived Pakistan during this fiscal year. The country has fetched FDI amounting to $ 952 million during July-Dec of FY21.
Similarly, foreign investors repatriated $ 52.2 million on account of returns on portfolio investment down from $93.1 million.
Most of repatriation has been made from food sector amounting to $ 177 million, financial business $ 133 million, communication $119 million, oil and gas $ 74million and Tobacco $ 78 million.
Month on Month basis, foreign investors repatriated $ 144 million including $132.6 million of FDI returns and $11.7 million of return on portfolio investment in December 2020.
It may be mentioned here that Pakistan has allowed 100 percent transfer of profit and dividend to the foreign investors to attract more foreign investment in the country. Therefore, the foreign investors are taking full advantage of government’s policy by sending their earnings abroad.
Copyright Business Recorder, 2021