The repatriation of profit and dividend by foreign investors posted a hefty growth of 26 percent during the first seven months of current fiscal year (FY18). Economists said improved financial results of the corporate sector and multinational companies have scaled up the repatriation of profit and dividend by foreign investors. "The massive increase in the repatriation of profit and dividend reflects that Pakistan's economy can produce better margins on foreign investments," they added.
They said with improved domestic demand, profitability of the industrial sector has improved significantly during the last two years, which resulted in higher outflow of profit and dividend. The State Bank of Pakistan (SBP) Monday revealed that repatriation of profit and dividend by foreign investors continues to surge, posting a hefty growth of 26 percent during the first seven months of this fiscal year (FY18).
Foreign investors cumulatively repatriated some $1.343 billion on account of profit and dividend during July-January of FY18 against $1.068 billion in the same period of last fiscal year (FY17), depicting an increase of $275.5 million. Major outflow of profit and dividend was witnessed on account of FDI, which contributed 87 percent share to overall repatriated amount in July-January of FY18. During the period under review, with 3 percent decline, Pakistan fetched FDI amounting to $1.488 billion in July-January of FY18.
During the period under review, repatriation on account of FDI rose by 38 percent or $321 million. Foreign investors sent abroad some $1.173 billion on account of return on FDI during the first seven months of the current fiscal year compared to $852.2 million in the corresponding period of last fiscal year.
However, as the Pakistan's equity market is not performing well, the repatriation of profit and dividend on account of foreign portfolio investment (FPI) witnessed a declining trend. It fell by 26 percent. Repatriation of profit and dividend on FPI stood at $170.2 million in July-January of FY18 down from $215 million in the same period of last fiscal year.
Month-on-month basis, during January 2017, foreign inventors repatriated some $141.2 million including $117.6 million as return of FDI and $23.6 million on account of FPI. The repatriation of profit on account of FDI in January is even less than FDI amounting to $106 million arrived in the same month.
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