US investors getting more active in Asia

Singapore, February 27:

US investors are becoming more active in Asian capital markets, particularly South Korea, Hong Kong and Taiwan, a published report said today. According to a joint study by the US treasury department and federal reserve Bank of New York, US total holdings of foreign long term securities jumped from $870.1 billion in March 1994 to $3.6 trillion in December 2004. US holdings of Taiwanese equities and long-term debts soared by 70 times in the 10-year long period from $531 million to $34.9 billion, the most spectacular rise. The portfolio of South Korean long-term securities expanded by 11 times to $73.5 billion.

“Slightly over half of all US investments were in European securities and about one-six was in Asian securities,” according to the study, “US investment in Asia was very highly concentrated in equities.”

Investors have been hesitant to place heavy bets on China and India, where the capital markets, despite astonishing bursts of economic growth, are still in the early stages of development, the study stated.

It showed US holdings of Chinese equities and longterm debts had a market value of $12.7 billion as of December 2004, up from $2.1 billion a decade earlier. US holdings of Indian long-term securities shot up 17 times to $23.5 billion.

Holdings of Thailand’s long-term securities went from $4.7 billion to $7 billion 10 years later, and Malaysian holdings edged up from $9.5 billion to $10.6 billion. Japanese long-term securities, at $366.2 billion, topped the study in Asia.