China, Hongkong and Netherlands emerge as top three investors during 1HFY21

January 19, 2020 (MLN): China emerged as the largest direct foreign investor in Pakistan during December 2020, with a net direct investment of $53.7 million, followed by Hongkong and United States who invested $30.9 million and $27.7 million net respectively, according to SBP data issued.

However, the country witnessed a negative FDI of $16 million net in the previous month as China and Norway withdrew $78.4 million and $55.8 million from the country respectively.

Cumulatively, during July-December FY21 the country attracted $952.6 million of net FDI, with China, Hongkong, and Netherlands appeared as the top three investors in Pakistan with net FDI of $358.9 million, $86.3 million, and $72.3 million respectively.

The FDI from China was 9% lower in July- December FY21, compared to the net inflows of $395.8 million in the same period of FY20. While the inflows from Hongkong were almost the same when compared to the inflows during Jul-Dec FY20. The inflows from the Netherlands jumped by 61% YoY compared to the net FDI of $45 million recorded during 6MFY20.

On the other hand, investors from Norway showed the largest disinvestment of $44 million during 6MFY21, however, during the corresponding period last year, the country invested $288.5 million as FDI.

Other important investors were the United States (US), United Kingdom (UK), and Malta with a net FDI of $64.8 million, $63 million, and $55.9 million respectively. The Inflows from the US and UK surged by 47% and 8% YoY respectively when compared to Jul-Dec FY20 while the inflows from Malta recorded a decline of 50% YoY in 1HFY21.

Moreover, Foreign Portfolio Investment (FPI), which represents an investment in the equity market has shown a negative picture, as net FPI outflows during the period under review stood at $438 million compared to the inflows of $471 million recorded in the same period last year. The UK emerged as the biggest withdrawal of portfolio investment during the period, as it withdrew $183.6 million during 6MFY21, followed by the US with $126.3 million.

Meanwhile, UAE appeared as the largest contributor in portfolio investment with $101.7 million.

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