Foreign investors repatriated $1.5 billion on account of profit and dividend during July-April of this fiscal year (FY17). Economists said improved financial results of the corporate sector have scaled up repatriation of profit and dividend by foreign investors. "The massive increase in the repatriation of profit and dividend reflects that the country''s economy is gradually improving and foreign investors are getting better margins on their investments in Pakistan," they added.
The higher outflow of profit and dividend also reflects that Pakistan is still an investment-friendly market, that can produce better margins for foreign investors, economists said. According to the State Bank of Pakistan (SBP), the repatriation of profit and dividend by foreign investors maintained an upward trend and posted a growth of 5 percent during the first 10 months of the current fiscal year. Foreign investors repatriated some $1.521 billion on account of profit/dividend during July-April of FY17 against $1.456 billion during the same period of last fiscal year (FY16), depicting an increase of $65.2 million.
Major outflow of profit and dividend has been witnessed from Foreign Direct Investment (FDI) and cumulatively, some 80 percent of the repatriated amount has been sent as returns on FDI. The detailed analysis revealed that repatriation on account of FDI has posted some increase, while repatriation from Foreign Portfolio Investment (FPI) witnessed a declining trend.
During the period under review, repatriation from FDI rose by 8 percent. Foreign investors sent $1.233 billion on account of return on FDI during 10 months of the current fiscal year compared to $1.140 billion in the corresponding period of last fiscal year, showing an increase of $93 million.
The repatriation of profit and dividend on account of FDI is lower than overall FDI that was attracted by Pakistan during this fiscal year. The country fetched FDI amounting to $1.733 billion during July-April of FY17. With 10 percent decline, foreign investors repatriated $288.7 million on account of returns on portfolio investment during July-April of FY17 compared to $316.7 million in the corresponding period of last fiscal year. Most of the repatriation has been made from financial business, ie, $274 million, food sector $194.7 million, chemical $107.6 million, oil and gas $102 million and power sector $160 million.
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