FDI income between US, S'pore down in 2016

Singapore

DESPITE pumping more money into factories and offices, Singapore firms in the United States and US multinational corporations (MNCs) in Singapore saw their investment incomes fall in 2016.

Investment yields of Singapore firms in the US totalled US$282 million in 2016, down sharply from US$866 million in 2015, even as their investments jumped from US$21.65 billion to US$23.93 billion, according to the latest data released by the US Department of Commerce.

The drop was gentler for US MNCs in Singapore, with their investment returns slipping from US$25.05 billion in the previous year to US$23.15 billion. Meanwhile, US investments here climbed US$8.11 billion to US$258.86 billion last year - the single biggest US investment sunk in the Asia-Pacific region.

Not only did Singapore investments in the US do poorer in 2016, they were also among the worst foreign performers there. The rate of return on Singapore's investments (income divided by investments), which fell from 4.4 per cent in 2015, was a measly 1.2 per cent against an average 4.3 per cent for all foreign firms and 3.1 per cent for Asian companies.

Japanese MNCs, which have the biggest Asian investment presence in the US (US$421.10 billion), scored the highest rate of return at 3.9 per cent among Asians, though the investment return was lower than the 4.6 per cent hit in 2015.

Singapore investments in the US only performed better than those from China, Hong Kong and New Zealand. The latter two posted negative investment returns, while the rate of return for the Chinese was only 0.1 per cent.

Foreign investments in the US on the whole saw income jump from US$148.34 billion in 2015 to US$159.75 billion in 2016. The yields of Asian investments, however, tumbled from US$23.58 billion in the previous year to US$19.08 billion.

While US investment income in Singapore dropped last year, it was still the highest in the region. The 8.9 per cent rate of return that US MNCs fetched here continued to compare favourably with the average for US investments worldwide and in the region, which respectively were 7.7 and 8.3 per cent.

Still, it should be noted that the rate of return for US investments in Singapore has declined for four straight years - from a double-digit 14.7 per cent in 2012, 14.6 per cent in 2013 and 13.7 per cent in 2014.

The rate of return on US investments in China, on the other hand, has been inching up. At 12.8 per cent, up from 12.5 per cent in 2015, it was the highest in the Asia-Pacific region in 2016.

US investments in Japan also produced an impressive yield of 9.7 per cent last year, up from 9.3 per cent in 2015. The rate of return was 6.9 per cent in South Korea and 7.2 per cent in Taiwan.

US investments in Australia were among the worst performers in 2016, with a 4.8 per cent rate of return.

Globally, US investment income rose from US$406.69 billion in 2015 to US$409.97 billion last year. In the Asia-Pacific region, the income increased from US$68.84 billion to US$69.91 billion.