Singapore is likely on track to record a strong year of foreign
investments pumped into the country, despite the economic downturn.
Latest available figures show
that for the first six months of the year, fixed asset investment commitments
on items such as factories and machinery amounted to about S$10.6 billion
(US$8.66 billion).
This is well above the level of
investment commitments Singapore attracted in the first half of last year, which
stood at S$6.31 billion. Last year, investment commitments totalled S$13.73
billion.
If Singapore keeps up its strong
first-half performance in the latter half of the year, it could be in for
another good year, said analysts.
The Economic Development Board
(EDB) said in January that the investment figure could hit up to S$15 billion
this year.
But if its recent high-profile
announcements are anything to go by, there is reason to believe that this
figure will be met or even surpassed.
In August, Germany's Evonik
Industries broke ground for the construction of a 500 million euros (US$635
million) animal feed nutrients plant and is going ahead to build another 250
million euros plant.
Asked if this year could be a
bumper year for investments, EDB would only say it will release the total
figures for this year at its review next year.
Singapore International Chamber
of Commerce chief executive Philip Overmeyer said he has heard that companies
are still very keen to invest despite the uncertainties in the global economy.
"Part of the reason, as
always, is that Singapore still represents a stable investment," he said.
CIMB economist Song Seng Wun said
the numbers look "pretty decent" given that investment commitments
tend to drop with periods of slow growth.
Global growth is likely to hit
just 3.3 per cent this year, lower than last year's 3.9 per cent rate.
Worry over the economic recovery
in the United States and fears of a meltdown in Europe have also created a
climate of uncertainty that has affected investments around the world.
Barclays Capital economist Leong
Wai Ho pointed out that competition for investments has been intense.
"Look at Iskandar and how
aggressive they have been. Even Korea is looking for investments. So the S$10.6
billion figure is really not a bad number," he said.
The Iskandar Regional Development
Authority (IRDA) said that as at September, the Iskandar region had attracted
cumulative investments of 15 billion ringgit (US$4.89 billion) this year.
Singapore Business Federation
chief operating officer Victor Tay said that the foreign manpower tightening
could put a dampener on potential investments here.
"Singapore is still an
attractive place, but we do know that big multinational firms are rethinking
whether to relocate here due to the tight manpower restrictions," he said.
"So I'm not entirely sure
how well we will do in the second half of the year and going forward to next
year, as manpower requirements are key to any investment into a country."
US$1 = S$1.22
Aaron Low
Business & Investment Opportunities
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