Malaysia Summary Of The International Investment Position 2007
A. Introduction
As of December 31, 2007, the net liabilities position of Malaysia’s international investment stood at RM18.2 billion; a marginal improvement of RM4.8 billion, from the position of RM23.0 billion registered last year.
This was mainly driven by the performance of external assets of RM742.7 billion (2006: RM555.4 billion) which increased at faster pace than that of external liabilities, RM760.9 billion (2006: RM578.5 billion).
B. External Assets
The year of 2007 saw that reserve assets which accounted for RM335.7 billion continuously remained as the largest component of external assets 45.2%; a moderate increase of RM45.3 billion or 15.6% from the previous year. This was followed by direct investment abroad (DIA), which continuously remained as the second largest portion of the total assets amounting to RM192.4 billion (25.9%); an increase of RM65.0 billion or 51.0% from the previous year. In terms of sector, the financial intermediation sector constituted as the main contributor to DIA (32.5%). This was followed by the mining & quarrying and agriculture sectors, which accounted for 29.9% and 9.5%, respectively. Meanwhile, equity capital & reinvested earnings was the biggest share of the DIA amounting to RM113.4 billion or 58.8%.
Other Investment, which amounted to RM162.1 billion or 21.8% of the total external assets, was the third largest contributor; a rise of RM55.8 billion or 52.5% from the year-end 2006. Currency & deposits of the banking sector, which increased markedly from the year earlier, pronounced the upward trend of other investment.
As at end of 2007, the shares of portfolio investment and financial derivatives were marginal, only accumulating to RM50.7 billion (6.8%) and RM1.8 billion (0.2%), respectively.
C. External Liabilities
As of December 31, 2007, total foreign liabilities rose substantially by RM182.5 billion or 31.5% to RM760.9 billion, from the position of RM578.5 billion registered last year.
The local stock exchange performed favourably, as indicated in the upward trend of the composite index throughout the year. The performance shown was in tandem with the increase in equity securities holdings by non resident investors. Overall, this had boosted the stock of portfolio investment to RM340.8 billion in 2007 (2006: RM232.6 billion); a largest portion (44.8%) of the total external liabilities.
Foreign direct investment in Malaysia (FDI) accounted for RM253.8 billion or 33.3%, formed the second biggest share of the total external liabilities. The rise of RM63.7 billion or 33.5% from the previous year was mainly reflected in the increase in equity capital & reinvested earnings stocks to RM242.8 billion (2006: RM181.5 billion). The manufacturing sector continuously remained as top FDI recipient amounting to 49.1%. This was followed by financial intermediation sector, 17.2%, and mining & quarrying sector, 9.3%.
As of December 31, 2007, other investment was the least contributor to the total external liabilities. It accounted for RM164.6 billion; rose marginally or 6.7% from end of 2006.
D. Net External Position
As at end of 2007, the net position indicated that:
• Malaysia’s FDI stock continued to remain larger than that of DIA by RM61.4 billion, albeit lower by RM1.3 billion from that of 2006;
• the net liability position for portfolio investment of RM290.1 billion, expanded by RM87.0 billion (42.9%); and
• the net liability position for other investment of RM2.4 billion, nevertheless declined by RM45.5 billion from that of 2006. The significant increase in the currency & deposits assets led to the lower position.
Download : International Investment Position Tables For Malaysia, 2007
