Foreign investment in Pakistan recorded a drop of 21.9 percent inflows inthe first two months of the fiscal year 2020-21. This is due to thedivestment from stock exchange markets by foreign investors in the month ofAugust, State Bank of Pakistan (SBP) said.
The overall inflows of investment also witnessed a pessimistic trend in thecountry, as the investment from major economies has slowed down since theCOVID-19 outbreak. According to the SBP, the foreign investment inflowsstood at $210 million in July and August as compared to investments of $269million reported in the similar period of last year.
However, foreign direct investment (FDI) in the real estate sector surgedby 39.9 percent, reaching $226 million during the period. Financialbusinesses were the largest recipient of FDI at a net $85.4 million in thefirst two months (July-August) of the current fiscal year. Communication,electronic machinery, and oil and gas exploration sectors were alsoprominent for FDI and attracted $37.1 million, $36.5 million, and $34.3million respectively.
On the other hand, the foreign portfolio investment saw an outflow of $76.3million during the same period, as the foreign investors of the equitymarket opted to divest from stocks. The debt securities recorded inflows of$59.8 million in the government-backed paper.
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Norway, the Netherlands, and Malta were the top three investors in Pakistanwith net FDI of $45 million, $41 million, and $37 million respectivelyduring July and August.
Analysts believe that investment inflows may improve in the next few weeksand months as businesses are going towards new normal across the world thatincludes investment activities that would be picked up.
