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Foreign investors inject $284m into Pakistan’s economy
By Kazim Alam
Published: November 19, 2013
KARACHI:
Pakistan saw an improvement in inflow of foreign direct investment (FDI) in the first four months of fiscal year 2013-14 as international investors injected $283.7 million into different sectors, up 12.5% compared to $252.1 million recorded in the corresponding period in the previous year.
According to data released by the State Bank of Pakistan on Monday, FDI, however, dropped 58.5% year-on-year to $52.8 million in October. In the previous fiscal year, Pakistan had received FDI worth over $1.4 billion.
Speaking to The Express Tribune, Global Securities research analyst Umair Naseer said the improvement in FDI is encouraging, although the quantum of increase is still very low.
“The oil and gas sector has a lot of potential to attract FDI in the future, as there is room for further exploration and production. The new petroleum policy offers a lot more incentives to exploration and production companies,” he noted.
The oil and gas sector attracted the highest amount of FDI in the July-October period. It attracted a net foreign investment of $146 million, which is slightly higher than the investment of $135.2 million it received in the corresponding four-month period in the previous year.
Improved FDI in chemicals ($58.4 million), financial business ($52.4 million), tobacco ($45.2 million) and food ($31.8 million) sectors led to the overall growth in foreign investment in the country.
In contrast, a major dip in FDI was registered in the telecommunications sector, where a net outflow of $101.7 million was recorded in the period under review.
“I expect food, tobacco and other consumer goods sectors to keep attracting higher (FDI) inflows in view of the growing middle class and increasing consumerism in our economy,” Naseer observed.
As for the foreign portfolio investment (FPI), Pakistan attracted only $72.3 million during July-October as opposed to $126 million in the corresponding period of last year. This reflects a year-on-year decline of 42.6% in FPI.
Therefore, net inflow of foreign investment, which includes portfolio and public investments, was $424.9 million during July-October 2013. This is 13.3% higher than the inflow recorded in the corresponding period last year.
Countries that brought significant amounts of FDI into Pakistan include the United States ($100.1 million), Switzerland ($93.9 million), Hong Kong ($59 million), Italy ($41.2 million), United Kingdom ($38.6 million) and Oman ($35.2 million).
Naseer said the sale of various enterprises marked for privatisation to foreign buyers is likely to boost the FDI this year. “Stability in economic policies and the resolution of macroeconomic issues will be highly important in attracting FDI in coming months,” he noted.
Published in The Express Tribune, November 19th, 2013.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
By Kazim Alam
Published: November 19, 2013
KARACHI:
Pakistan saw an improvement in inflow of foreign direct investment (FDI) in the first four months of fiscal year 2013-14 as international investors injected $283.7 million into different sectors, up 12.5% compared to $252.1 million recorded in the corresponding period in the previous year.
According to data released by the State Bank of Pakistan on Monday, FDI, however, dropped 58.5% year-on-year to $52.8 million in October. In the previous fiscal year, Pakistan had received FDI worth over $1.4 billion.
Speaking to The Express Tribune, Global Securities research analyst Umair Naseer said the improvement in FDI is encouraging, although the quantum of increase is still very low.
“The oil and gas sector has a lot of potential to attract FDI in the future, as there is room for further exploration and production. The new petroleum policy offers a lot more incentives to exploration and production companies,” he noted.
The oil and gas sector attracted the highest amount of FDI in the July-October period. It attracted a net foreign investment of $146 million, which is slightly higher than the investment of $135.2 million it received in the corresponding four-month period in the previous year.
Improved FDI in chemicals ($58.4 million), financial business ($52.4 million), tobacco ($45.2 million) and food ($31.8 million) sectors led to the overall growth in foreign investment in the country.
In contrast, a major dip in FDI was registered in the telecommunications sector, where a net outflow of $101.7 million was recorded in the period under review.
“I expect food, tobacco and other consumer goods sectors to keep attracting higher (FDI) inflows in view of the growing middle class and increasing consumerism in our economy,” Naseer observed.
As for the foreign portfolio investment (FPI), Pakistan attracted only $72.3 million during July-October as opposed to $126 million in the corresponding period of last year. This reflects a year-on-year decline of 42.6% in FPI.
Therefore, net inflow of foreign investment, which includes portfolio and public investments, was $424.9 million during July-October 2013. This is 13.3% higher than the inflow recorded in the corresponding period last year.
Countries that brought significant amounts of FDI into Pakistan include the United States ($100.1 million), Switzerland ($93.9 million), Hong Kong ($59 million), Italy ($41.2 million), United Kingdom ($38.6 million) and Oman ($35.2 million).
Naseer said the sale of various enterprises marked for privatisation to foreign buyers is likely to boost the FDI this year. “Stability in economic policies and the resolution of macroeconomic issues will be highly important in attracting FDI in coming months,” he noted.
Published in The Express Tribune, November 19th, 2013.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
