Foreign direct investment (FDI) during the month of October hit a 10-month high of $317.4 million, accounting for nearly 43.3 per cent of total inflows during the current fiscal year, data released by the State Bank of Pakistan (SBP) showed on Monday.
In comparison, FDI during October 2019 was recorded as $126.5m.
During the last month, China invested $228.7m in the country while the power sector absorbed around $239m in October alone.
Meanwhile, FDI during the four-month period from July to October jumped nine per cent to $733m compared to $672.0m in the year-ago period, data showed.
On the other hand, total foreign investment – net of foreign portfolio and public investments – into the country declined more than 64pc or $698.2m to $425m compared to $1.12 billion in the same period last fiscal year. The sharp decline in total foreign investment was mainly due to outflows from equity and debt securities to the tune of $161.2m and $598m, respectively, during the four months under review.
China emerged as the top investor in the country during the four-month period, pouring in $332.1m, followed by Malta with $74m and Netherlands with $51.5m. In comparison, China invested $64.3m during the same period last year, followed by Malta with $74.1m and Netherlands with $23.1m.
Sector-wise, the power sector attracted the most investment at $352.3m. Meanwhile, financial businesses attracted $118.5m and oil and gas exploration amassed $83.1m.
During the current financial year and the last two quarters of FY20, foreign investors have dumped their holdings in stocks as well as government-backed securities due to Covid-19, lower interest rates and an appreciation of the rupee against dollar.
"Foreigners have been net sellers since the onset of the Covid-19 pandemic as there is a global risk-off strategy for most emerging markets-based funds; so the selling was not specific to Pakistan,” said Saad Ali, head of research at InterMarket Securities.
"Recently, however, the selling has accelerated due to upbeat stock prices amid good September results which provided better opportunities to exit," he said.
Correction: An earlier version of this story incorrectly stated that FDI had reached a nine-month high. In fact, it is a 10-month high. The error is regretted.