Repatriation of profit, dividend may cross $1 billion mark

Repatriation of profit and dividend by foreign investors may cross $1 billion mark by the end of this fiscal year, supported by improved economic activities. Sources in banking industry told Business Recorder Friday that repatriation of profit and dividend continues to post a rising trend and capitalising on the government's liberal policy.
The foreign investors have repatriated some $985.4 million on account of profit and dividend during first 10 months of current fiscal year compared to $847.7 million in the corresponding period of last fiscal year, depicting an increase of 16 percent or $138 million. Evaluating the current momentum of repatriation, bankers are expecting that repatriation of profit and dividend will cross $1 billion by end-June 2014.
In order to attract maximum foreign investment in the country, the government allowed foreign investors to send back 100 percent of profit, dividend or earnings on their investment in Pakistan. Foreign investors are taking full advantage of this policy by regularly transferring their earnings abroad, economist said. "Improved economic activities have increased profitability of different sectors and ultimately resulted in a higher repatriation," they added.
Detailed analysis revealed that repatriation of profit and dividend from Foreign Portfolio Investment (FPI) registered a decline of 8 percent, while some 22 percent increase was registered on account of FDI. In addition, the major outflows of profit and dividend have also been witnessed from FDI and cumulatively over 83 percent of repatriated amount has been sent as returns on FDI.
Foreign investors transferred $822.4 million on account of returns on FDI during the first 10 months of the current fiscal year compared to $671.6 million in the corresponding period of last fiscal year. The repatriated amount on account of FDI is some $71.4 million higher than the FDI during this fiscal year as FDI inflows stood at $751 million during the same period. In addition, repatriation on FPI posted a decline of $13 million as it stood at $163.1 million during July-April FY14 against $163.1 million in the corresponding period of FY13. The major repatriation has been made from the financial sector, wherefrom foreign investors repatriated $270 million during the period under review. Power sector is second largest sector wherefrom foreign investors transferred $137 million on account of profit and dividend.