Foreign investment plunges 46pc

[Champion_Usmani]

KARACHI: Foreign direct investment (FDI) fell by 46 per cent in the first four months of the current fiscal year especially in October when inflows fell by 53pc, said a report of the State Bank of Pakistan (SBP) on Wednesday.

Despite China-Pakistan Economic Corridor related investments, the FDI inflows during July-October 2018-19 were limited to just $600.7 million against $1,119.9m last year.

Inflows from China totalled at $335m, which was 56pc of the total FDI during the period under review. However, the Chinese investments also plunged more than half when compared with $694.3m inflows in the corresponding period last year.

The recent four-day visit of Prime Minister Imran Khan to China was crucial to the bilateral relations between the two countries. Finance Minister Asad Umar after returning from the trip declared the problem of current account deficit had been resolved; on the other hand, the government is negotiating with the International Monetary Fund (IMF) for a bailout package.

In addition to that, inflows from other countries have also been declining mainly due to the increasing Chinese influence in Pakistani economy. Significant inflows were recorded at $64.5m from UK, $45m from USA, $43.9m from Korea and $36.3m from Switzerland during the period under review.

Month-on-month, inflows in October were visibly poor dropping to just $161m compared $345.6m in the same month last year; a fall of 53.4pc.

The SBP data revealed a 15pc jump in remittances from overseas Pakistanis and the trade deficit has also reduced; however, despite these improvements, increasing oil prices in the international market could jeopardise the government’s effort to fix the ailing economy.

In an effort to avoid an outright economic crisis, the government recently announced that Saudi Arabia would provide $3 billion for deferred oil payments and deposit $3bn in the account of SBP. However, central bank’s reserves have not seen any rise ever since the announcement was made during the last week of October.

The delay in the Saudi funds has affected the exchange rate stability as foreign exchange reserves are declining each day mainly on account of debt servicing payments.

The outflow of portfolio investment was 269m compared to outflow of 57m in the same period of last year. The large outflow led to overall decline in the foreign private investment during the four months of this fiscal by 68pc to $1,062m.

Published in Dawn, November 15th, 2018

https://www.dawn.com/news/1445654

@Maarkhoor @CIS-TRANS @Canuck786 @BATMAN @Major Sam @Tameem @Jinn Baba @SmartGeek @Proudpakistaniguy @volatile @Kabira

 

[Champion_Usmani]

FDI continues to fall in Pakistan

KARACHI:

Foreign investors have continued to stay away from Pakistan as they are reluctant to make long-term investments in the face of ambiguity about new economic policy of the Pakistan Tehreek-e-Insaf (PTI) government.

Foreign Direct Investment (FDI) dropped 55% to $161.2 million in October 2018, compared with $354.6 million in the same month of last year, the State Bank of Pakistan (SBP) reported on Wednesday.

“Uncertainty has probably remained an element behind slowdown in foreign (direct) investment in Pakistan,” Pakistan Business Council Chief Executive Officer Ehsan Malik told The Express Tribune.

The current trend of investment these days is mostly for necessary expenditure. Global investors have not made any new long-term investment in any sector of the economy since long.

Pakistan needs to improve competitiveness to attract FDI

A source anticipated the FDI may remain low in the short-to-medium run since Finance Minister Asad Umar told a foreign investors’ advocacy body last week that the government was interested in attracting FDI in export projects and/or import substitution projects in Pakistan, instead of continuing to attract the investment in consumer goods sector.

The minister also urged the body for technology transfer into Pakistan along with FDIs.

The shift in the policy towards attracting FDI in new sectors would help the government narrow down the current account deficit and lower burden on the country’s foreign currency reserves, he added. Cumulatively in the first four months (July-October) of the current fiscal year, 2019, the foreign direct investment decreased 46% to $600.7 million compared with $1.1 billion made in the same period last year, according to the central bank data.

Country-wise FDI



China has continued to remain the single largest investor on the FDI front under its ongoing China-Pakistan Economic Corridor (CPEC) projects in Pakistan. It alone invested $53.7 million in October that comes to about 33% of the total FDI worth $161.2 million in the month.

This month South Korea has also emerged as a notable investor, as it invested $43.7 million in the month.

The United Arab Emirates (UAE) was the third largest investor with net FDI of $22.8 million, while the United States and the United Kingdom on fourth and fifth positions with net investments of $19.8 million and $13.3 million, respectively.

On the other hand, Norway divested net $14.8 million, while Malta divested $11.7 million in the month.

Senate chairman invites foreign investment

Sector-wise FDIs

The beverages sector witnessed single largest inflow of FDI (net) worth $47.7 million, followed by pharmaceuticals and OTC products $32.3 million. The power sector attracted $30.1 million, while financial business received $11.8 million in the month.

The communication sector, which had continued to attract significant investment for quite a long time, witnessed a net outflow of $22.2 million in the month.

PSX investment

With foreign investors continuing to exit Pakistan’s capital market, the Pakistan Stock Exchange (PSX) in October also sold stocks worth $84.2 million compared to purchasing shares worth $21 million in the same month last year.

Such investors from the US and Luxembourg sold shares in net of $31.5 million and $24 million, respectively. The increase in divestment may be attributed to foreigners’ exit from many emerging markets and in anticipation of downgrading of two Pakistani stocks from MSCI mid-cap indices.

Published in The Express Tribune, November 15th, 2018.

https://tribune.com.pk/story/1847306/2-foreign-direct-investment-continues-fall-pakistan/

https://twitter.com/i/web/status/1062998608373600261

 

[Canuck786]

Man I am in favor of letting PTI complete their whole term to strengthen democracy in Pakistan but if Imran Khan stays the same we can ill afford 5 years of PTI government.

 

[zip]

Count total cpec related FDI from Chinese companies, they will execute inflated 35 billion work by investing not more than 15 billion investment ..Who won't inflate their investment if there is guaranteed return on investment without 3rd party auditing?

 

[Champion_Usmani]

https://twitter.com/i/web/status/1061955600412786689

 

[Norwegian]

Man I am in favor of letting PTI complete their whole term to strengthen democracy in Pakistan but if Imran Khan stays the same we can ill afford 5 years of PTI government.

You don't have a choice. People voted for Tabdeeli and they have got to endure it. Pakistan must learn to stay on its own feet instead of living decades after decades on foreign loans / investments.

 

[Champion_Usmani]

https://twitter.com/i/web/status/1063411980726358016

 

[Canuck786]

You don't have a choice. People voted for Tabdeeli and they have got to endure it. Pakistan must learn to stay on its own feet instead of living decades after decades on foreign loans / investments.

Tabdeeli.. Sure..

Everyone including the PTI supporters are feeling it. (They just won't admit it)

 

[Norwegian]

Tabdeeli.. Sure..
Everyone including the PTI supporters are feeling it. (They just won't admit it)

Sure. It must get real bad before it gets better. Past governments never dared to do hard-needed surgery of the corrupt system. This one is doing it, and every corrupt is crying and screaming.

https://twitter.com/i/web/status/1063411980726358016

You guys are leeching poor peoples blood since 1985. Whats your concern if PTI did the same temporarily for only 3 months?

 

[Laozi]

That is what happens when all eggs are put in Chinese Basket

Other countries have in fact increased their share in FDI including Uncle Sam

 

[RoadRunner401]

Pakistan economic problems aren't created by PTI, they were the gift of the previous corrupt to the core governments, according to the source you are using @Champion_Usmani (foreign exchange reserves are declining each day, mainly on account of debt servicing payments) Its pretty Rich the same who created these conditions are now blaming others for it, explain to us all how money borrowed by PML-N and pee pee pee on GOP account and then simply stealing it instead of investing in the economy is PTI fault?

Its pretty Pathetic, starting these kinds of negative posts and defaming the Country on international forum for personal gains shows us all, it's the not the country PML-N care for its the power and corruption and they don't care how they get to power and steal as long as they get there.

 

[aziqbal]

Omg those numbers are embarrassing!

No one wants to invest in Pakistan

We seriously need to up our image

Montenegro in the Balkans initiated a huge marketing campaign on worlds news channels like CNN 30 second clips

They turned around their FDI now everyone wants to invest

Pakistan need to market its image so people look at us and invest

 

[Menace2Society]

Omg those numbers are embarrassing!

No one wants to invest in Pakistan

We seriously need to up our image

Montenegro in the Balkans initiated a huge marketing campaign on worlds news channels like CNN 30 second clips

They turned around their FDI now everyone wants to invest

Pakistan need to market its image so people look at us and invest

You can't do that unless you stop angry mullahs protesting at everything beaming across the world. It doesn't help when opposition parties encourage this to bring down the government at every opportunity.

 

[AViet]

Vietnamese is relatively hostile to both China and the US (even now the anti-US songs (from Vietnam war) still taught and sung by children during children singer competition), but they still come to Vietnam to invest.

I sincerely believe the problem is with the working attitude and disciplines.

 

[RoadRunner401]

Omg those numbers are embarrassing!

No one wants to invest in Pakistan

We seriously need to up our image

Montenegro in the Balkans initiated a huge marketing campaign on worlds news channels like CNN 30 second clips

They turned around their FDI now everyone wants to invest

Pakistan need to market its image so people look at us and invest

Would you jump to invest here?