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What Industries In Singapore Are Foreign Investors Investing In?

Singapore has been attracting growing amounts of foreign direct investment (FDI) over the years.

According to data from the Department of Statistics Singapore, in 2009, the total stock of FDI here amounted to S$574.7 billion. By 2014, that sum had grown by 78% to S$1.025 billion.

I thought it could be interesting for investors in Singapore’s stock market to have an idea of how the stock of FDI had changed for each industry in Singapore in that five year block. It could signal which industries foreign investors were more interested in.

Here’s a list of each industry along with changes in their total stock of FDI from 2009 to 2014:

Stock of FDI in Singapore (2)
Source: Department of Statistics Singapore

As you can see, all nine industries have seen their stock of FDI increase from 2009 to 2014. I want to focus on three industries in particular: Manufacturing, Information & Communications, and Financial & Insurance Services.

Manufacturing is the industry with the slowest growth. But, it still has the second largest stock of FDI. Foreign investors are still attracted to Singapore’s manufacturing scene.

There are at least 200 companies in Singapore’s stock market that belong to manufacturing. One of the larger companies in that group would be Venture Corporation Ltd (SGX: V03). It has a market capitalisation of S$2.6 billion right now. The company provides electronics manufacturing services and has knowledge in wide areas, such as printing & imaging, networking & communications, medical devices and life science equipment, and more.

Venture Corp’s dividend has remained steady in its last five fiscal years, fluctuating between S$0.55 and S$0.50 per share. Its profit picture is a little messier though, with a big decline in 2014 brought about by a hefty S$64 million impairment charge.

Venture Corp dividend and profit table
Source: S&P Global Market Intelligence

Moving on to Information & Communications – otherwise known as technology – it started 2009 as one of the tiniest industries in Singapore. But its stock of FDI has grown the fastest.

An example of a technology company in Singapore’s stock market would be DeClout Limited (SGX: 5UZ). The company has interests in cloud computing services, data centres, telecommunications services, and e-commerce, amongst others.

Top-line growth at DeClout has been brisk – its revenue had nearly quadrupled from S$73 million in 2013 to S$280 million in 2015. The bottom-line grew at a similar pace as well, from S$1.06 million to S$4.98 million. But, DeClout has had a history of clocking losses in certain quarters over that period.

Lastly, there is Financial & Insurance Services. The industry was already the largest industry by FDI stock back in 2009, yet it was still the second fastest growing industry.

This is perhaps not too surprising considering how Singapore is an important financial hub in Asia. Singapore’s largest bank by assets, DBS Group Holdings Ltd (SGX: D05), is also the largest in Southeast Asia. The bank was solidly profitable even during the financial crisis period. Its book value per share has grown by over 7% per year from S$11.99 in 2011 to S$15.82 in 2015.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Ong Kai Kiat owns shares in DBS Group Holdings.