KARACHI, Dec 26: Foreign investment crossed the significant mark of $2billion in just four months of the current financial year, recording a 100 per cent increase against the inflows during the corresponding period of last year.

The latest data, issued by the State Bank, showed that investment from the developed economies was on the higher side, while the inflow from the Middle East was extremely low despite continuous announcements of huge investments by the companies based in the region.

Total foreign investment reached $2.099 billion during July-November 2006-07. Of this, $1.456 billion came from the US and Western European countries.

The most attractive area of investment remained telecommunications which attracted $410 million during the months under review as against $1.937 billion in the full year of 2005-06.

However, oil and gas exploration received good investment as it reached $221 million as against $312.7 million during the whole year of 2005-06. Others top attractions were financial business with a total amount of $393.7 million, trade $84 million, power $76 million, chemicals $62 million and textile $28.5 million.

Out of this, total portfolio investments during the four months were to the tune of $623.8 million as against $270.9 million in the corresponding period of last year while foreign direct investment was $1.476 billion as against $752 million during the same period of last year.

The trend of foreign direct inflow showed that if it continues, the total may reach $4.5 billion to $5 billion by the end of the financial year. This huge inflow would help the country meet the widening trade deficit which could touch even higher than $12 billion for the whole year.

The long-term friend China was yet to show willingness for investing in Pakistan as inflow from China was a negligible $1.9 million during the first four months as against $1 million during the same period last year. China invested $1.7 million last year.

The inflow from Middle East, except UAE, showed a poor level of investments. UAE invested $226 million during the four months as against $1.487 billion during the full year of 2005-06.

However, investments from Saudi Arabia were just $10 million while other Middle Eastern countries showed low interest. The trend is against the announcements being made the companies and ministries from the region.

A number of state-owned companies announced long-term multi-billion dollar investment which is yet to reflect from the investment data.

Analyst said the foreign direct investments were still coming in the traditional sectors which remained the focus during the last five years, like oil and gas exploration and telecommunications. They said most attractive was the real estate sector which has matured to yield very high returns to investors.

However, construction data was also not impressive as only $46 million landed in this field as against $16.6 million in the corresponding period and $89.5 million during the whole year of 2005-06.