KARACHI: Foreign investors repatriated some $1.5 billion as profit and dividend on their investments in Pakistan during the last fiscal year (FY22).
Despite some improvement and six percent economic growth, the repatriation of profit and dividend by foreign investors witnessed a slight increase during the last fiscal year. The State Bank of Pakistan (SBP) on Thursday reported that repatriation of profit and dividend rose by 1.7 percent or $22 million to $1.651 billion during July-June of FY22 as compared to $1.622 billion during the same period of FY21.
Month-on-Month basis, foreign investors repatriated $51 million in June. This amount included $47.8 million as return on FDI and $ 2.8 million as profit on FPI.
The detailed analysis revealed that major outflow of profit and dividend was recorded from the Foreign Direct Investment (FDI) and cumulatively some 90 percent of repatriated amount was sent as returns on FDI.
During the period under review, repatriation on account of FDI recorded a $ 5 million surge. Repatriation of profit and dividend on account of return on FDI was $1.495 billion during FY22 versus $1.49 billion outflow in FY21.
In addition, repatriation from Foreign Portfolio Investment (FPI) recorded an increase of 15.8 percent. Foreign investors repatriated $ 156 million as returns on portfolio investment in July-June of FY22 up from $132 million in July-June of FY21, showing an increase of $24 million.
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Sector-wise analysts revealed that during the period under review the highest outflow of profit and dividends, amounting to $271 million, was sent from financial business, $206.5 million from communication, $200 million from power sector, $153 million from food and $146 million from oil and gas sector.
Analysts said that the repatriation of profit and dividend depends on the profitability of the corporate sector. Foreign investors send more amount, if the companies earn more. The present trend reflects that the corporate sector’s earnings are also flat during the last fiscal year, of which the repatriation has not posted a healthy increase.
It may be mentioned here that Pakistan has allowed 100 percent transfer of profit and dividend to foreign investors to attract foreign investment in the country.
Copyright Business Recorder, 2022
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