November 24, 2020 (MLN): Foreign investors’ confidence on Pakistan’s economy is gradually restoring as multinational companies operating in Pakistan repatriated $678.6 million in profit and dividends on investments in the country during four months of FY21 which was 24% higher than the profits repatriated in the corresponding period of last year.
However, in the month of October alone, repatriation of profits and dividends on investment by the foreign firms decreased 40% MoM and 49% YoY to $23.8 101.9 million, SBP data showed
The data further revealed that during Jul-Oct FY21, foreign companies repatriated $648.2 million worth of profit against the foreign direct investments (FDI) in various businesses compared to $499.3 million in the same period last year. Moreover, profits on equity investments stood at $30.5 million compared to $48.9 million a year earlier, marking a decline of 38% YoY.
The data shows that the major sectors that repatriated relatively higher profits include Food, Communication sector, Financial Business, Transport, Oil & Gas Exploration sector and Chemical, among which Food Sector repatriated highest profits of $161.4 million during 4MFY21 to overseas, against $44 million in the corresponding period of last fiscal year, showing a growth of 267% YoY.
The data further revealed that profits outflow from the communication sector increased 19.28x YoY to $118.7 million; against an outflow of $6.2 million in Jul-Oct FY20.
Profit outflows from the Financial Businesses dropped to $91 million from $112 million. Transport sector repatriated $69.3 million in the first four months of FY21, compared with $77.4 million in the same period of FY20.
The Oil & Gas Exploration sector repatriated $55.8 million, which was 43% lower as they had sent $97.8 million during Jul-Oct FY20.
The Chemical sector repatriated 12% lower profits and dividend income during the period under review which amounted to $56.7 million, while in the corresponding period last year, the sector repatriated $64.4million.
A country-wise break up of data on repatriation of profit/dividend released by SBP, revealed that firms and individual investors belonging to the United Kingdom dispatched the single largest profit of $275.4 million during 4MFY21 compared to $128.5 million in the same period prior year.
United States witnessed the second highest profits repatriation as the country repatriated $109.2 million abroad during the period under review, compared with $107.9 million in the corresponding period previous year.
Third in line is Malta which repatriated $91.7 million from Pakistan during the period, while in the corresponding period last year, the country did not remit any profits or dividend income from Pakistan.
Next followed by Switzerland with profit repatriation of $34.7 million which was 27% lower when compared with last year figures.
Companies from Hong Kong repatriated $28.9 million in 4MFY21 compared to $79 million in Jul-Oct FY20.
Furthermore, Chinese firms repatriated $28.7 million abroad during the period under study, compared with $44.8 million in 4MFY20, depicting a fall of 36% YoY.
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