The repatriation of profits and dividends by foreign investors has registered a massive growth of 59 percent during the first half of current fiscal year FY12. The State Bank of Pakistan on Tuesday said that foreign investors repatriated $514 million on account of profit and dividend during first half of current fiscal year compared with $324 million in corresponding period of last fiscal year, depicting an increase of $190 million.
Analysts said that as per government's investor-friendly policy, they can transfer 100 percent of profit or dividend abroad. Therefore, the foreign investors are taking full advantage of government's policy by sending their earnings abroad.
"Recent raise in outflow of profit and dividend is an indication that the country's economy is gradually improving. On the other hand, political uncertainty on the back of 'Memogate' may be a reason of quick transfer of profit and dividend by foreign investors", they added.
According to SBP, repatriation of profit registered from both components of foreign investment. Major outflow of profit and dividend was witnessed from the foreign direct investment (FDI).
During the period under review, repatriation from FDI and foreign portfolio investment (FPI) mounted by 45 percent and 109 percent respectively.
Foreign investors sent abroad $371.2 million on account of return on FDI during the first half of FY12 year as compared to $255.5 million in the same period of last fiscal year, depicting an increase of $115.7 million.
With a raise of $74.3 million, $142.5 million was repatriated on account of return on portfolio investment during July-December of current fiscal year, relative to $68.2 million in corresponding period of last fiscal year.