Q1 FDI net inflows reach $1.7B

June 21, 2020

Net inflows of foreign direct investment reached 507 million in March, 18.5 percent lower than the $622 million net inflows registered in the same period last year.

 The progression of the 2019 coronavirus disease crisis into a full-scale pandemic and its adverse impact on the global economy dampened investor sentiment and investment activity during the month.

The decline in total FDI net inflows was largely due to the 33.5 percent reduction in net investments in debt instruments to $278 million from $419 million in the same month last year.

Similarly, reinvestment of earnings fell by 37.9 percent to $57 million from $91 million.

Meanwhile, net equity capital placements increased by 53.1 percent to $172 million in March from $112 million posted in the same month last year.

Equity capital placements originated mostly from Japan and Taiwan. These were invested mainly in the 1) administrative and support service, 2) manufacturing, and 3) financial and insurance industries.

For the first quarter, FDI net inflows contracted by 14.2 percent to $1.7 billion from the $1.9 billion net inflows in the comparable period last year.

This developed on account of the 41 percent decline in net investments in debt instruments to $828 million from $1.4 billion.

Reinvestment of earnings also dipped by 24.1 percent to S$187 million from $247 million in the previous year.

The FDI downturn was mitigated partly by the 120.7-percent growth in net equity capital placements to $653 million from $296 million. In particular, gross placements expanded by 22.8 percent to $714 million (from $582 million) and withdrawals decreased by 78.6 percent to $61 million (from $286 million).

The source countries of the bulk of the equity capital placements during the period were the Netherlands, Japan, and Singapore. Said placements were channeled mainly to the 1) manufacturing, 2) administrative and support service, and 3) real estate industries.