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US MNCs up investments in Singapore

[SINGAPORE] Despite tough economic conditions, multinational corporations (MNCs) from the United States have upped their investments in Singapore, giving the city-state the honour of hosting the single largest US investment in the Asia-Pacific region.

Cumulative direct investments here jumped from US$118.57 billion in 2011 to US$138.60 billion in book value last year, according to the US Department of Commerce's latest figures.

The increase was in tandem with still-strong investment returns locally for US MNCs; their profits in Singapore climbed from US$21.07 billion (without current cost adjustment) to US$21.17 billion, at a time when global economic uncertainties were clipping American investments elsewhere in the world.

In contrast, Singapore companies' investments in the US were less impressive - but still notable. Their investments crept up from US$24.21 billion in 2011 to US$26.24 billion in 2012, behind those of Japan (US$308.25 billion) and Australia (US$42.69 billion), among the Asia-Pacific countries.

And Singapore's investments in the US stayed profitable, yielding returns of US$1.16 billion in 2011 and US$0.74 billion in 2012.

Globally, US direct investments increased from US$4,084.66 billion in 2011 to US$4,453.31 billion last year - with Europe (US$2,477.04 billion) accounting for over half of the investments. The single largest US investment was in the Netherlands (US$645.09 billion).

Latin America and other countries in the Western Hemisphere (US$869.27 billion), such as Barbados and the Dominican Republic, have the second biggest chunk of the US investments by region. The Asia-Pacific region (US$651.31 billion) accounted for the third biggest share.

Until two years ago, the US MNCs' biggest investment in the Asia-Pacific region was in Australia (US$137.26 billion), followed by Japan (US$126.03 billion) and then, Singapore. US investment in Australia fell to US$132.83 billion in 2012, bringing it below Japan with US$133.97 billion.

A big chunk (US$79.18 billion) of the US investments here, however, were in holding companies, compared with US$39.16 billion for Australia. The bulk of US investments (US$78.66 billion) in Japan were sunk in the finance and insurance industries, excluding banks.

US direct investments in China rose from US$54.07 billion in 2009 to US$58.99 billion in 2010. But they then fell to US$55.30 billion in 2011 and US$51.36 billion last year.

US MNCs' global income slipped from US$456.52 billion in 2011 to US$448.88 billion in 2011. It dropped from US$79.37 billion to US$76.93 billion in the Asia-Pacific region, including Japan, China and Hong Kong.

Global foreign direct investments in the US also increased last year, up from US$2,502.63 billion in 2011 to US$2,650.83 billion. Asia-Pacific companies raised their investments from US$409.51 billion to US$427.68 billion.

Returns for these global investments also rose - from US$161.78 billion to US$170.91 billion, with those from the Asia-Pacific rising from US$23.75 billion to $25.88 billion.