http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.08Change: 0.07
R/$ = 12.01Change: 0.15
Au 1201.91 $/ozChange: 25.71
Pt 1146.50 $/ozChange: 24.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Jul 05, 2012

$500bn cash ‘overhang’ may fuel FDI surge once confidence returns

Back
Africa|PROJECT|TNC|Africa|Egypt|Libya|South Africa|USD|Infrastructure
Africa|PROJECT||Africa|||Infrastructure
africa-company|project|tnc|africa|egypt|libya|south-africa|usd|infrastructure
© Reuse this



Foreign direct investment (FDI) flows are likely to remain flat in 2012. But the latest World Investment Report (WIR 2012) also estimates that “upwards of $500-billion in investable funds” are being held back by multinationals and that this cash ‘overhang’ could fuel a surge in FDI once global economic conditions improve.

The United Nations Conference on Trade and Development (Unctad) report, published on Tuesday, estimates total transnational corporation (TNC) cash holdings have climbed to a record $5-trillion, based on projections from data for the world’s top 100 TNCs.

Such hoarding has also been witnessed in South Africa, where corporate deposits have reportedly swelled to more than R530-billion.

“Renewed instability in international financial markets will continue to encourage cash holding and other uses of cash, such as paying dividends or reducing debt,” the authors argue.

Therefore, the WIR 2012 forecasts that FDI will “level off at $1.6-trillion in 2012”, having recovered 16% to $1.5-trillion in 2011, slightly better than the precrisis average of about $1.4-trillion. Nevertheless, the 2011 figure remains 23% below the 2007 FDI flows peak of $1.97-trillion.

However, barring any macroeconomic shocks, Unctad expects flows to rise to $1.8-trillion in 2013 and $1.9-trillion in 2014.

Besides the $500-billion in TNC capital, which equates to a third of current global flows, the outlook for FDI could receive an additional boost from sovereign wealth funds (SWFs), which currently have assets under management estimated to be around $5-trillion.

To date, SWFs have made a relatively modest $125-billion cumulative contribution to FDI flows. But the report believes these funds are well placed to invest in productive activities and infrastructure, owing to their long-term and strategically oriented investment outlook.

During 2011, developing countries accounted for 45% of all inflows, which rose to a record $648-billion. But flows to Africa declined for the third consecutive year, mainly as a result of a pullback in Egypt and Libya.

That said, inflows to sub-Saharan African surged 25%, from R29.5-billion in 2010 to $36.9-billion, approaching the peak of $37.3-billion achieved in 2008.

The value of greenfield project investments, which have been declining since 2009, held steady at $904-billion, while cross-border merger and acquisitions surged 53% to $526-billion.
 

Edited by: Creamer Media Reporter
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Economy News
Information and communications technology (ICT) distributor DCC is making Windows- and Android-operating systems tablets available through retailers and education equipment suppliers to provide school children with affordable, high-performance education tools. The...
The South African Chamber of Commerce and Industry’s (Sacci’s) Business Confidence Index (BCI) decreased by 3.7 index points month-on-month to 89.1 in March.
As is well known, at the end of last month, retired General Muhammadu Buhari defeated incumbent President Goodluck Jonathan in Nigeria’s Presidential elections. A northerner and a Muslim, Buhari won a majority of the votes in predominantly Christian States in the...
More
 
 
Latest News
South African mining and energy adviser Ted Blom has raised a litany of concerns about the state of power utility Eskom and has warned of runaway costs and shortfalls in coal and water, as well as rail capacity. Blom was surprised by the recent buoyancy shown by...
JSE-listed Astrapak will sell specialised packaging systems manufacturer Knilam to Mapflex SA for R17.7-million. The proceeds would be used to reduce Astrapak’s current level of gearing.
The last of the 26 mooring units comprising the Port of Ngqura’s automated mooring system (AMS) have arrived at the port and are expected to improve port efficiency and safety, further driving the Transnet National Ports Authority’s (TNPA’s) objective of establishing...
More
 
 
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
 
 
 
 
 
This Week's Magazine
Sappi Southern Africa CEO Alex Thiel
Forest products group Sappi has confirmed the selection of its 25 MW biomass-to-power project, to be erected at its Ngodwana mill, in Mpumalanga, as a preferred bidder under the South African government’s Renewable Energy Independent Power Producer Procurement...
Information and communications technology (ICT) distributor DCC is making Windows- and Android-operating systems tablets available through retailers and education equipment suppliers to provide school children with affordable, high-performance education tools. The...
Another cement manufacturer is set to enter the Ugandan market, raising hopes that prices will come down and spur growth in the construction industry. National Cement, a Kenyan manufacturer, has unveiled plans to invest $195-million in a new manufacturing plant in...
With growth rates exceeding that in the developed world – at an average of between 4% and 5% between 2002 and 2014 – African countries provide investors with ample reason to tap into booming consumer demand says Manufacturing Circle executive director Coenraad...
The South African Chamber of Commerce and Industry’s (Sacci’s) Business Confidence Index (BCI) decreased by 3.7 index points month-on-month to 89.1 in March.
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96