The repatriation of profit and dividend by foreign investors is increasing gradually and some $450 million were sent abroad during the first five months of the current fiscal year. "Because of global meltdown, which hit the profitability of companies, the outflow of profit and dividend by foreign investors was on decline during last fiscal year 2010-11," bankers said.
However, the repatriation is again on surge because of current political uncertainty in the country and foreign investors are quickly transferring their profits abroad especially Dubai to avoid any loss, they added. They said raise in the outflow of profit and dividend also reflects that Pakistan's overall economy is improving and industrial activities are also being reinstated.
The State Bank of Pakistan has revealed that the repatriation of profit and dividend by foreign investors has registered a healthy growth of 56 percent during July-November of current fiscal year. Foreign investors have repatriated some $450 million on account of profit and dividend during first five months of fiscal year 2011-12 as against $288 million in the corresponding period of last fiscal year, depicting an increase of $162 million.
According to SBP, although repatriation of profit has been registered from both components of foreign investment, the major outflow of profit and dividend was witnessed from the Foreign Direct investment (FDI) and cumulatively some 71 percent of the repatriated amount was sent from FDI returns. FDI during first five months of current fiscal year stood at $419.4 million as compared $576.3 million in the corresponding period of last fiscal year.
During the period under review, repatriation from FDI and Foreign Portfolio Investment (FPI) surged by 42 percent and 109 percent, respectively. Foreign investors sent abroad $320 million on account of return on FDI during the first five months of the current fiscal year as compared to $226 million in the same period of last fiscal year, depicting an increase of $94 million. With a raise of $68 million, some $130 million were repatriated on account of return on portfolio investment during July-November of current fiscal year compared to $62 million in the corresponding period of last fiscal year. Some 8 sectors, out of some 36, showed an increase in the repatriation of profit and dividend. While, repatriation of 9 sectors witnessed downward trend.
The major repatriation was registered from the power sector wherefrom foreign investors repatriated $82 million during July-November of FY12. Transportation is second largest sector wherefrom foreign investors sent abroad an amount of $67.2 million during the period under review as against some $11.3 million in the same period of last fiscal year.