Foreign firms hold half of S'pore corporate assets
Foreign firms hold half of S'pore corporate assets
Agence France-Presse, Singapore
Foreign-controlled companies hold more than half the corporate assets in Singapore but only one-third of shareholder equity, the government said Tuesday in an analysis of business performance in 2000.
The foreign concerns are also more profitable and efficient, according to the statistics department report covering the composition, structure and performance of Singapore's corporate sector and ranking it alongside 1999 data.
The bulk of corporate finance, in assets and equity, was soaked up by the financial services and both areas showed strong growth in 2000 when the Singapore economy expanded by a sizzling 10 percent.
Shareholder equity jumped 13 percent to 534 billion Singapore dollars (US$305 billion) and company assets rose 10 percent to $2,332 billion.
"Financial services accounted for the largest amount of shareholder equity, amounting to $254 billion or 48 percent of total capital in the corporate sector," the report said.
Manufacturing, which contributes about a quarter of the export-reliant nation's gross domestic product, was the second largest at 18 percent.
Of the total shareholders' equity in 2000, about two-thirds was attributed to locally controlled companies and more than 50 percent of it was concentrated in financial services, followed by real estate and business services at 19 percent.
Among foreign-controlled companies, the financial services sector also accounted for the highest amount of shareholders' equity although its share was lower at 39 percent.
Three-quarters of shareholders' equity in manufacturing was attributed to foreign controlled companies, reflecting the dominance of foreign investors in the sector.
Like shareholders' equity, the financial services sector also accounted for the bulk of assets held by companies at 67 percent, "mainly due to the large and highly liquid assets of banks," the report said.
Although foreign-controlled companies held only one-third of shareholders equity they held 57 percent of the total corporate sector assets valued at $2,332 billion.
Nearly three-quarters of the assets held by foreign-controlled companies were in the financial sector where foreign banks had very large and highly liquid assets due to their operations.
In the manufacturing sector, 71 percent of the total assets were attributed to foreign-controlled companies, reflecting their dominance in the sector.
In a comparison of the rate of return on assets and equity, "local-controlled companies were less profitable than foreign- controlled ones, particularly in the manufacturing and commerce sectors," the report said.
It attributed the difference to foreign-controlled companies being "generally more efficient" and with access to more diversified markets.
However, the gap between local and foreign-controlled companies in manufacturing narrowed significantly in 2000 to 5.4 percentage points from 12 percentage points the previous year.
In financial services, construction, insurance services and real estate and business services, local-controlled companies enjoyed higher profitability than their foreign-controlled counterparts.