The country’s total foreign investment swelled by 52.5% to $1.824 billion, mainly supported by the Dutch company Friesland Campina Pakistan BV which paid $459.5 million for an acquisition deal with Engro Foods in December 2016.
Foreign public portfolio investment (debt securities) improved by 119.5% during July-Dec 2016, according to data released by the State Bank of Pakistan (SBP) here on Monday.
For the first time in the current fiscal year, direct investment (DI) shows sign of improvement by 10.4 per cent to $1.080 billion over July-Dec 2016. Out of this investment, Friesland Campina invested $459.5 million and Chinese companies invested $204 million into the China Pakistan Economic Corridor (CPEC).
In the month of December, the country received $594.7 million in direct investment, and recorded inflows of $657.3 million and outflows of $62.8 million.
The country received direct investment from China, UAE, USA, Turkey, and Italy in oil and gas explorations, power, communication, and other businesses.
$129 million were received from Turkey, $77.2 million from UAE and $38.4 million from USA, the SBP data revealed.
An analyst of a brokerage house said, “Outflows of $254.5 million were recorded in portfolio investment equity securities despite touching the highest level of 49,700 points last week.”
In July-Dec 2015-16, foreign private investment of the country stood at $826.3 million compared to $741.6 million received in the same period last year.
The country’s total direct foreign investment increased by 52.5 percent to $1.824 billion in last six months of the current fiscal year only because of Netherland’s company investment in Engro Foods, the analyst claimed. “The country has received another big investment of $129 million from Turkey,” the analyst added.
The foreign public investment also increased by 191.5% to $998.1 million in July-Dec this year compared to only $454.7 million received in same period in 2015-16.
The country has recorded inflows of direct investment of $1.319 billion in July-Dec 2016, with the outflows amounting to $239.9 million for the same period.
The analyst believed that a Chinese-led consortium will pay approximately $85 million against 40 percent stake of the Pakistan Stock Exchange (PSX) in January or February. He further said that the overall situation of the FDI will improve in the coming months.
After touching a high point of $24.6 billion, forex reserves declined to $23.29 billion this week.
“There is a positive trend in portfolio inflows because of MSCI up gradation of Pakistan’s stocks in emerging markets,” another analyst claimed.
The United States (US) withdrew $41.1 million while Norway was second and pulled back $36 million, while Germany withdrew an amount of $29.7 million from Pakistan.
Dutch company Friesland Campina Pakistan BV (FC Pakistan) has completed its acquisition of a majority stake in Engro Foods at an estimated price of $446.81 million in December 2016. The Netherlands-based dairy company has acquired 51% stake at Rs 120 ($1.14) per share in Engro Foods. It acquired 47.1% (or 361.29 million shares) from Engro Corporation, the parent company of Engro Foods, and another 3.9% (or 29.66 million shares) from the general public.
