http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.20Change: -0.08
R/$ = 10.57Change: -0.05
Au 1304.46 $/ozChange: 1.94
Pt 1488.50 $/ozChange: 0.00
 
 
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 Suppliers Directory Research Jobs Announcements 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
 
 
 
 
 
 
 
 
Other Economy News
Numsa general secretary Irvin Jim
South African engineering union Numsa has agreed to end a four-week strike after accepting a wage increase offer from employers, union leader Irvin Jim said on Monday. Numsa, South Africa's largest union, has accepted a 10% annual pay rise fixed for three years for...
Rob Davies
South Africa will use the upcoming US-Africa Leaders' Summit, which will also encompass the 2014 edition of the Africa Growth and Opportunity Act (Agoa) Forum, to appeal for a 15-year extension of the nonreciprocal trade arrangement, as well as South Africa’s...
The head of economics and trade at the Delegation of the European Union (EU) in Pretoria has acknowledged South Africa’s trade negotiators won important concessions in the long-running Economic Partnership Agreement (EPA) trade talks. But he says it was South...
Article contains comments
More
 
 
Latest News
Numsa general secretary Irvin Jim
South African engineering union Numsa has agreed to end a four-week strike after accepting a wage increase offer from employers, union leader Irvin Jim said on Monday. Numsa, South Africa's largest union, has accepted a 10% annual pay rise fixed for three years for...
Trade union Solidarity on Monday accepted the Steel and Engineering Industries Federation of South Africa’s (Seifsa’s) revised wage offer. The three-year wage agreement, settled within the Metal and Engineering Industries Bargaining Council (MEIBC), comprised...
Rob Davies
South Africa will use the upcoming US-Africa Leaders' Summit, which will also encompass the 2014 edition of the Africa Growth and Opportunity Act (Agoa) Forum, to appeal for a 15-year extension of the nonreciprocal trade arrangement, as well as South Africa’s...
More
 
 
Recent Research Reports
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
Real Economy Insight: Steel 2014 (PDF Report)
This four-page brief covers key developments in the steel industry over the past 12 months. It provides an overview of the global and South African steel and stainless steel markets, South Africa’s major steel producers and events that have shaped these markets.
 
 
 
 
 
This Week's Magazine
Multinational semiconductor chipmaker corporation Intel announced its national campaign to further acquire partners to drive its She Will Connect programme, an initiative that aims to expand digital literacy skills to young women in developing countries, further into...
South Africa's MeerKAT radio telescope array programme should get back on schedule within a few months. This assurance has been given by SKA South Africa (SKA SA) associate director: science and technology Prof Justin Jonas. Early last month, Science and Technology...
The Passenger Rail Agency of South Africa’s (PRASA’s) Metrorail service will remain a subsidised service following its current multibillion-rand rolling stock, station, depot and signalling upgrade programme. PRASA group CEO Lucky Montana has allayed fears that...
GARYN RAPSON Contaminated Land Provisions in the National Environmental Management: Waste Act No 59 of 2008 will open the door for court battles to determine who will be held liable for the remediation
The uncertainties around the remediation of affected areas as addressed in the Contaminated Land Provisions in the National Environmental Management: Waste Act No 59 of 2008 will possibly spark litigation and disputes between landowners and businesses, contractors...
South Africa is currently the largest component of the African Development Bank’s (AfDB’s) active portfolio in Southern Africa, comprising 62.5% of the bank’s $7.9-billion exposure to the 12-country region – the second largest beneficiary is Mauritius, which...
 
 
 
 
 
 
 
 
 
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