According to State Bank of Pakistan (SBP), foreign investor outflows rose to $138.2 million on account of profit and dividend in July of FY2019-20 compared to $136.7 million in the corresponding period of FY2018-19, showing a slight increase of 1.1% or $1.5 million.
The analysis shows that the repatriation of profit and dividend is much higher than the FDI that arrived in the country during the first month of this fiscal year (July)
Pakistan received FDI of $73.4 million in July 2019 compared to $179 million in July 2018.
According to market analysts, the repatriation of profit and dividend by foreign investors always scaled up when earnings of the corporate sector and multinational companies improved.
According to the State Bank, major outflow of profit and dividend were seen on account of FDI which had a 92 percent share in the overall repatriated amount. SBP’s data showed that payments on foreign direct investment (FDI) increased to $126.8 million in July from $124.2 million in the same month last year.
The payments on portfolio investment amounted to $11.4 million, compared with $12.6 million last year.
However, as Pakistan’s equity market is not performing well, repatriation of profit and dividend on foreign portfolio investment (FPI) witnessed a declining trend.
Sector-wise Break up
This July, major repatriation was made from the oil and gas, transport and financial sectors. Foreign investors repatriated $29.8 million from oil and gas, $28.1 million from transport and $27 million from the financial sector.
Country-Wise Break Up
A country-wise break up on repatriation of profit/dividend reveals that Hong Kong firms repatriated the highest amount, $42.9 million, compared with $0.7 million last year. Repatriated profits of the Swiss firms rose to $11.2 million from $0.9 million in the period under view.