Net FDIs sink to $84 million in February
May 11, 2012 at 10:49
The country saw net inflow of foreign direct investments (FDI) sink by nearly a third annually in February to just a tenth of the previous month’s level, the central bank said in a statement on Thursday.
Specifically, net FDI inflows dropped 31% to just $84 million in February from $121 million the previous year, and were down nearly 90% from January’s $766 million.
Net equity capital inflow grew seven times annually to $77 million in February from $11 million, though this was still a tenth of the previous month’s $739 million.
The central bank noted that bulk of the $132-million gross equity capital inflow in February, or about $100 million, “represented final payment for the acquisition of shares by a foreign firm in a local beverage manufacturing company,” which it did not identify.
Reinvested earnings also showed a net inflow of $28 million in February that was three-fourths bigger than the previous year’s $16 million, but still 12.5% less than January’s $32 million.
“This developed as foreign investors opted to retain some of their profits in domestic firms, encouraged by positive macroeconomic developments and favorable corporate earning prospects,” the central bank said in its statement.
But flows categorized as “other capital” — primarily lending between foreign direct investors and their subsidiaries or affiliates in the country — saw a net outflow of $21 million in February that was bigger than the previous month’s $5-million net outflow and a reversal of the $94-million net inflow recorded the previous year.
This, the central bank said, was due “mainly to repayments of intercompany loans by local subsidiaries/affiliates to their parent companies aborad.”
The central bank data also showed net FDI inflows more than doubling to $850 million in the first two months of this year from $335 million in the same period last year, with equity capital net inflows surging 19 times annually to $816 million from just $42 million.
The central bank noted that equity capital infusion in the first two months came mainly from Australia, Japan, Kuwait and the United States, benefitting financial and insurance services, information technology and communication, manufacturing, mining and quarrying, as well as wholesale and retail trade.
The first two months also saw reinvested earnings posting a net inflow of $60 million that were a fifth more than the previous year’s $50 million, while “other capital” recorded a $26-million net outlfow from a $243-million net inflow.
FDIs last year registered net inflows of $1.262 billion that were 2.8% less the $1.298 billion recorded in 2010.
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By: KAM
Source: BusinessWorld, May 11, 2012
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