MNCs repatriate $576.8mln in Q1

KARACHI: Profit and dividends repatriated by multinational companies (MNCs) surged 65.1 percent to $576.8 million in the first quarter of this fiscal year, mainly because of better corporate profitability, relaxed conditions, and recovering investor confidence, central bank data showed on Wednesday.

The MNCs had sent $349.2 million to their headquarters overseas in the July-September period of the last fiscal year.

In September, foreign firms repatriated $169.2 million worth of profits and dividends.

State Bank of Pakistan (SBP) numbers further revealed that foreign firms repatriated profit of $559 million against the foreign direct investments in various businesses in July-September FY2021. That compared with $328.9 million in the corresponding period last year.

They sent home profit worth $17.8 million earned on investments in Pakistan Stock Exchange. These earnings stood at $20.3 million a year earlier.

Food sector repatriated $152.2 million in the period under review, compared with $27.6 million in the corresponding period last year.

Profit outflows from the communications sector increased to $118.7 million from $6.2 million.

Financial businesses repatriated $90.1 million in the first quarter of FY2021, compared with $66.2 million in the same period of FY2020.

The SBP’s figures showed that $239.1 million was repatriated to the United Kingdom in three months, followed by Malta (91.7 million) and the United States (88.9 million).

Analysts said the profit outflows were on an upward trajectory for a few months now as the corporate earnings were increasing after Pakistan’s economy started showing signs of recovery, while the business confidence was also restoring.

“Foreign investors see Pakistan’s near-term economic outlook promising, but uncertainty remains due to growing coronavirus infections in the country,” an analyst said.

“The relaxations in the requirements for the profit repatriation by the SBP offered an incentive to the foreign companies to repatriate more money overseas,” he added.