Business

FDI shrinks by 59% to $461m in first six months of FY 2023

Published

2 years ago

Farwa

Financial sector fetches $176 million in FDI from global investors.
Investment in power sector falls to $237 million from $345 million.
Pakistan among least desired moneymaking markets for investors due to ‘deteriorating’ economy.

KARACHI: Pakistan’s foreign direct investment (FDI) shrank by 59% to $461 million in the first six months of the current fiscal year, the State Bank of Pakistan (SBP) data showed on Wednesday.

The country witnessed a net foreign outflow of $17 million during December.

The financial sector fetched $176 million in FDI from global investors in July-December of the ongoing fiscal, which was lower when compared with $230 million in the corresponding months of the last fiscal year, the data showed.

The investment in the gas and exploration sector dropped to $89.2 million in July-December from $138.9 million a year earlier.

The investment in the power sector fell to $237 million from $345 million.

The shrinking of the FDI is not a positive development for the country. The International Monetary Fund (IMF) programme’s delay, continuous political unrest, and Pakistan’s deteriorating external finances have all reduced international investors’ confidence.

Due to rapidly dropping foreign exchange reserves, a weakening rupee, and worsening macroeconomic indicators, Pakistan’s economy is currently in a severe crisis.

The economy is severely cash-strapped following a disagreement with the IMF over tax goals that is preventing loan payments from being made.

The situation worsened as a result of floods that inundated a third of the nation and cut its growth in half.

Analysts said dollar outflows and the deteriorating state of the economy have made the country one of the least desired moneymaking markets for foreign investors, with the repatriation of profits on foreign investments falling by 83.41% year-on-year in July-November of the current fiscal year 2022-23.

The central bank data showed paid profits from foreign investments in the country fell to $128.7 million in the first five months of FY23, down from $776 million reported in the corresponding fiscal year.

The economy is in virtual recession as the World Bank has projected growth of 2%, is about the same as population growth, for the current fiscal year, citing “precarious economic situation, low foreign exchange reserves and large fiscal and current account deficits” among the primary reasons.

There are also security concerns for investors as the country battles a Taliban insurgency in its northwest. There have been outflows from the stock market because of political uncertainty and economic and security worries.

Business

China Contributes 43 New Foreign Firms to the 6% Growth in SECP Registrations

Published

11 hours ago

Farwa

The Securities and Exchange Commission of Pakistan has registered 2,617 new firms this year, a 6% increase from 2023, with assistance from the Special Investment Facilitation Council. This increases the overall number of businesses that are registered to 231,111.

Non-profits, trade associations, and public unlisted firms make up 4% of these, while private limited corporations make up 55% and single-member companies 41%. It is noteworthy that 99.8% of the registrations were done online, demonstrating SECP’s attempts to digitise.

Real estate has 237 new businesses, services has 306, and trade has 377 new businesses. These are the main sectors exhibiting growth. While the healthcare and textile industries each had 49 new businesses, the education sector saw 101.

China contributed the most, adding 43 new companies, out of the 61 new companies that were registered as a result of foreign investment.

These recently registered businesses are anticipated to decrease imports, increase domestic production, and contribute to closing the trade deficit.

Business

PSX reaches an all-time high as the KSE-100 Index surpasses 86,000 points.

Published

12 hours ago

Farwa

The Pakistan Stock Exchange (PSX) has achieved a significant milestone, as the benchmark KSE-100 Index has attained an unprecedented peak.

On Tuesday at midday, the index ascended by 788 points, attaining a record high of 86,846 points. Following the ratification of the constitutional amendments, the stock market has increased by 1500 points over a span of two days.

Earlier today, the KSE-100 Index increased by 683 points, attaining a value of 86,741 points, before concluding at this new apex.

The bullish trend was apparent from the commencement of the trading session, with the index rising an additional 555 points to reach 86,612 points throughout the day. The reinstatement of the 86,500-point threshold signifies robust market performance.

Business

In three months, Pakistan’s IT exports increased by 33.54 percent.

Published

12 hours ago

Farwa

During the first three months of FY 2024-25 (July to September), Pakistan’s IT export remittances hit US$ 876 million, a notable 33.54 percent rise from US$ 656 million during the same period previous year (FY 2023-24).

In a statement, Minister of State for IT and Telecommunication Shaza Fatima Khawaja stated that the amount of money sent home by the export of ICT services was US$ 292 million in September 2024, a 41.7% increase from US$ 206 million in the same month the previous year.

She stated that efforts to make it easier for businesses to conduct business in the nation are the reason why IT exports are rising and that actions are being taken to increase them.

In response to the Prime Minister’s directions, Shaza Fatima stated that the Ministry of IT and Telecommunication, the Pakistan Software Export Board, and the IT industry are dedicated to boosting IT exports with the full assistance of the Special Investment Facilitation Council (SIFC).

A trade surplus of US$ 764 million was recorded by the IT & ITeS sector in the first three months of FY 2024–25, accounting for 87.21 percent of all ICT export remittances.

Over the same period last year, this surplus represents a 36.67 percent gain over US$ 559 million. The services industry as a whole, however, experienced a trade deficit of US$ 699 million during this period.

The largest of all service sectors, ICT export remittances from July to September 2024, were US$ 656 million, followed by “other business services” at US$ 374 million.