October 2023, the repatriation of profit and dividends by foreign investors in Pakistan experienced an extraordinary growth, reaching $272.5 million. This marks an exponential increase of over 1964% compared to the meager $13.2 million repatriated in October of the previous year, according to the latest data released by the State Bank of Pakistan (SBP).
Arif Habib Limited (AHL) noted that during October 23, the repatriation of profits and dividends in Pakistan reached a 39-month high, surging by 20.7 times to $273 million. Tahir Abbas, Head of Research at AHL, highlighted that this amount is the highest since July 2020 when the repatriation of profit by foreign investors was recorded at $355 million.
According to the SBP, repatriation of profit and dividends from Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI) in October 2023 stood at $261.4 million and $11.2 million, showing a year-on-year increase of 3,049% and 128%, respectively.
During the month, the manufacturing sector witnessed the highest outflow of profit and dividends, amounting to $112.3 million. The transportation and storage sector repatriated $48.4 million, while $40.1 million came from the wholesale and retail sector/repair of motor vehicles and motorcycles.
Analysts attribute this surge to the relaxation of capital controls previously implemented to curb the outflow of foreign exchange from the country. Tahir Abbas expressed optimism, stating that the rising trend in repatriation is expected to continue, serving as a positive indicator that will improve investor confidence.
On a monthly basis, repatriation increased by over 66% compared to $163.7 million in September. In the first four months of the fiscal year 2023-24, this figure saw a significant rise of 581% year-on-year, reaching $485 million, compared to $71.3 million in the same period last fiscal year.
During the four-month period, the manufacturing sector saw the highest outflow of profit and dividends, totaling $154.3 million. The wholesale and retail sector repatriated $106 million, while $76.9 million was repatriated from the transportation sector.
