Foreign investment in the country has fallen 15 percent in six months (July-December) of 2010-11 fiscal year referred to national and international economic slowdown and security hampered the flow of money to supply chains that drive the economy .
According to data released by the State Bank of Pakistan on Friday, foreign investment totaled 1.05 billion dollars in July-December 2010 compared to 1.24 billion kronor for the same period the previous year, showed a decrease of 15.4 percent. Of total investment was $ 828,500,000 in the form of FDI, while $ 221.5 million was in the form of portfolio investment on the stock markets of the country.
Assistant Vice President for Research BMA Capital, Abdul Shakur, said the slowing national economy, political instability, law and order situation has discouraged foreign investors from putting their money into the country. He said that the international economic recession over the past two years and the turmoil in global markets following the debt problems of large scale have also stopped the flow of money to Pakistan.
The maximum amount of $ 269 million was invested in oil and gas in six months, an increase of 5.5 percent of 255 million dollars invested during the same period last year. It was followed by the telecommunications sector received $ 111 million in investments during the period, while finance companies saw investment of around $ 106 million.
Shakur said the investment in the telecommunications sector is for the funds injected into China Mobile, but the total investment in the sector has fallen 39 percent from July to December 2009.
In the financial business sector, increased investment reflects the merger of Summit Bank Atlas World Bank. In addition to this investment Bugis injected $ 74 million in Bank BNI, but was made in January that may include data on foreign investment.
banking analyst at JS Global Capital, Bilwani Mustafa said the sale of BP's assets in Pakistan has given a boost to investment in oil and gas.
With regard to reducing the flow of investment in telecoms, he said that from 2005 to 2007 telcos invested heavily in the country as a mobile phone licenses were issued by the government. In the initial phase of five mobile phone companies use their network and telecommunications towers installed, pumping a huge amount of money.
But for the last eighteen months, investment in the sector has slowed, he said, adding that the 3G (third generation) is an area that can attract new funds, but it seems difficult that any significant action in this area will be taken by the government anytime soon. "If the 3G licenses were auctioned, it will surely bring massive investment," said Bilwani.
U.S. investors injected over 345 million U.S. dollars in the country for six months followed by the European Union has made an investment of 139 million. Another major investor is the UAE has invested $ 146 million.
Bilwani said the United States and the UAE have invested in the country because they are the main economic and trading partners of Pakistan. In addition, the government of UAE invests in companies operating in the country as Warid and Wateen.
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