[ Investment > FDI Report ]

oreign direct investment (FDI) on a notified basis was off a precipitous 41.1 percent during the second quarter of 2003 to $1.55 billion compared with $2.63 billion during the same period of last year.
  Although foreign investment has now declined through the last three quarters, the rate of decline showed signs of easing during the April/June period, compared to the first quarter of 2003 (off 48.4 percent) and the fourth quarter of 2002 (off 63.7 percent). Moreover, investment in manufacturing almost doubled from $444 million in second quarter 2002 to $849 million in the same period this year as Japanese companies staked out greater ownership in the semiconductor and LCD industries. For the first six months of 2003, FDI was off by 44.4 percent to $2.66 billion compared to January/June of 2002.
  Commenting on the slide in FDI, the Ministry of Commerce, Industry and Energy said ¡°Despite the end of the Iraq Wa r, continuing uncertainty in the world economy and the investment environment have resulted in the multinational corporations putting their capital decisions on hold.¡±
  Second quarter investment highlights included the acquisition by French company Nexans of Kukdong Electric Wire Co., the formation of a joint venture between Atofina, also of France and Samsung General Chemicals, and the 15-percent equity purchase by HSBC of STX Shipbuilding.
  By region, investment from the United States plummeted; that from Japan was steady while European capital flows rose in both quantitative and proportionate terms. American FDI was off 85 percent to $226 million, Japan investment eased just slightly by 1.4 percent to $ 211 million and EU investors increased their spending by 27.7 percent on the quarter to $627 million.
  By sector, the upsurge in manufacturing investment mentioned above claimed 54.7 percent of the total compared to the $703 million, or 45.3 percent that was made in services.
  By scale, the trend was to smaller amounts of FDI. Investments over $100 million comprised 37.9 percent of the total ($588 million) down from 72.1 percent, those between $100 million and $10 million, 36.1 percent ($561 million, up from 17.0 percent), those from $5 million to $10 million, 11.3 percent ($175 million, up from 4.5 percent), and those under $5 million, 14.7 percent ($229 million, up from 6.4 percent). Classified by type, FDI was split almost evenly in the second quarter between ¡°greenfield¡± investment ($764 million, 49.2 percent) and merger and/or acquisition ($789 million, 50.8 percent).