11MFY14: Buoyed by 3G, 4G licences, FDI rises 2.5%
Major increase witnessed in telecommunication sector, shows SBP data.
The negative growth rate in FDI until April was due to the one-off inflow of $231.3 million in April 2013 following the buyback of Unilever Pakistan stocks by the company’s global sponsors. PHOTO: FILE
KARACHI:
Pakistan received foreign direct investment (FDI) of $1.36 billion in the first 11 months of 2013-14, which is 2.5% higher than the FDI received during the comparable period of the preceding fiscal year.
According to data released by the State Bank of Pakistan (SBP) on Tuesday, a significant spike in FDI was witnessed in May when the country received a staggering sum of $610.9 million mainly because of the proceeds of the telecom spectrum auction.
A major increase in the foreign investment was registered in the telecommunications sector, where net FDI remained $406.4 million during the period under review. FDI in the telecommunications sector in May alone amounted to $539.3 million, thanks to the one-off auction of 3G/4G licences.
Earlier, FDI stood at $750.9 million in July-April, which was almost 13% less than the amount that the country received in the corresponding 10-month period of the preceding fiscal year.
The negative growth rate in FDI until April was due to the one-off inflow of $231.3 million in April 2013 following the buyback of Unilever Pakistan stocks by the company’s global sponsors.
Speaking to The Express Tribune, Lakson Investments Chief Investment Officer Khurram Schehzad said the PML-N government has been in office for only one year and that it will take some time to resolve longstanding issues like law and order.
Pakistan received FDI worth over $1.4 billion in 2012-13. FDI in the first half of the current fiscal year was $416.1 million, 26.8% down from the amount the country received in the corresponding six months of the preceding fiscal year.
The oil and gas sector attracted the highest amount of FDI in the July-May period. It attracted a net foreign investment of $426.6 million. However, it was 14.7% lower than the investment of $500.3 million that the sector received in the corresponding 11-month period of the preceding fiscal year.
Other sectors of the economy that received major FDI during the last 11 months include financial businesses ($142.7 million), chemicals ($85.2 million), tobacco and cigarettes ($35.6 million), food ($87.5 million), power ($33.5 million), personal services ($31.6 million), automobiles ($27.3 million) and beverages ($23.2 million).
Sectors of the economy that witnessed a considerable net outflow of FDI in July-May were petroleum refining ($16 million), electrical machinery ($10.8 million) and trade ($8.2 million).
As for foreign portfolio investment (FPI), which includes foreign public investment, Pakistan attracted $2.3 billion during the July-May period, about 22 times higher than $102.3 million in the comparable 11 months of the last fiscal year.
According to Schehzad, the increase in foreign investments in recent years has been substantial, although it is mainly in the form of portfolio investment.
“FDI is directly linked to the security situation. With the improvement in law and order conditions, Pakistan is likely to receive major inflows in the form of FDI,” he added.
Countries that brought significant amounts of FDI into Pakistan during the period under review include China ($527 million), Switzerland ($206.3 million), United States ($196 million), Hong Kong ($213.7 million), United Kingdom ($103 million), Italy ($64.8 million), France ($66.1 million), Austria ($61.1 million) and Oman ($35.5 million).
Countries that took major investments out of Pakistan in the last 11 months are Norway ($27.3 million), Finland ($25.7 million), Qatar ($53.6 million), Saudi Arabia ($43 million) and Singapore ($42.4 million).
Published in The Express Tribune, June 18th, 2014.
Pakistan received foreign direct investment (FDI) of $1.36 billion in the first 11 months of 2013-14, which is 2.5% higher than the FDI received during the comparable period of the preceding fiscal year.
According to data released by the State Bank of Pakistan (SBP) on Tuesday, a significant spike in FDI was witnessed in May when the country received a staggering sum of $610.9 million mainly because of the proceeds of the telecom spectrum auction.
A major increase in the foreign investment was registered in the telecommunications sector, where net FDI remained $406.4 million during the period under review. FDI in the telecommunications sector in May alone amounted to $539.3 million, thanks to the one-off auction of 3G/4G licences.
Earlier, FDI stood at $750.9 million in July-April, which was almost 13% less than the amount that the country received in the corresponding 10-month period of the preceding fiscal year.
The negative growth rate in FDI until April was due to the one-off inflow of $231.3 million in April 2013 following the buyback of Unilever Pakistan stocks by the company’s global sponsors.
Speaking to The Express Tribune, Lakson Investments Chief Investment Officer Khurram Schehzad said the PML-N government has been in office for only one year and that it will take some time to resolve longstanding issues like law and order.
Pakistan received FDI worth over $1.4 billion in 2012-13. FDI in the first half of the current fiscal year was $416.1 million, 26.8% down from the amount the country received in the corresponding six months of the preceding fiscal year.
The oil and gas sector attracted the highest amount of FDI in the July-May period. It attracted a net foreign investment of $426.6 million. However, it was 14.7% lower than the investment of $500.3 million that the sector received in the corresponding 11-month period of the preceding fiscal year.
Other sectors of the economy that received major FDI during the last 11 months include financial businesses ($142.7 million), chemicals ($85.2 million), tobacco and cigarettes ($35.6 million), food ($87.5 million), power ($33.5 million), personal services ($31.6 million), automobiles ($27.3 million) and beverages ($23.2 million).
Sectors of the economy that witnessed a considerable net outflow of FDI in July-May were petroleum refining ($16 million), electrical machinery ($10.8 million) and trade ($8.2 million).
As for foreign portfolio investment (FPI), which includes foreign public investment, Pakistan attracted $2.3 billion during the July-May period, about 22 times higher than $102.3 million in the comparable 11 months of the last fiscal year.
According to Schehzad, the increase in foreign investments in recent years has been substantial, although it is mainly in the form of portfolio investment.
“FDI is directly linked to the security situation. With the improvement in law and order conditions, Pakistan is likely to receive major inflows in the form of FDI,” he added.
Countries that brought significant amounts of FDI into Pakistan during the period under review include China ($527 million), Switzerland ($206.3 million), United States ($196 million), Hong Kong ($213.7 million), United Kingdom ($103 million), Italy ($64.8 million), France ($66.1 million), Austria ($61.1 million) and Oman ($35.5 million).
Countries that took major investments out of Pakistan in the last 11 months are Norway ($27.3 million), Finland ($25.7 million), Qatar ($53.6 million), Saudi Arabia ($43 million) and Singapore ($42.4 million).
Published in The Express Tribune, June 18th, 2014.