Lm200 million increase in equity capital by foreigners

Foreign direct investment (FDI) in Malta in the first nine months of 2006 totalled Lm487.7 million (Lm315.4 million more than the same period in 2005), the National Statistics Office said in a release last Friday week.

Mainly due to new acquisitions by foreign investors, equity capital increased by Lm200.3 million over the same period a year before. Reinvested earnings were also Lm38.1 million more than the amount registered a year earlier. Also, other capital flows amounted to Lm143.9 million, Lm76.9 million more than the same period in 2005.

The total FDI in 2005 was Lm218.8 million compared to the Lm143.3 million registered during the previous year.

Equity capital investment flows increased by Lm130.5 million (Lm21.7 million more than in 2004). However, due to larger dividends payments, re-invested earnings were Lm11.4 million shorter than in 2004.

A decrease in claims, accompanied by a higher increase in liabilities, resulted in an increase in the total of other capital flows during 2005.

Between January and September of 2006, provisional FDI inflows, broken down by geographical regions, amounted to Lm94 million from EU and Lm393.6 million from non-EU countries.

In 2005, total FDI inflows from the EU member states totalled Lm22.9 million as against Lm105.3 million during 2004. At the same time, FDI inflows from non-EU countries amounted to Lm195.9 million when compared to Lm38 million during 2004. When these provisional figures for FDI flows in Malta are classified by economic activity, the financial sector was the main recipient in the first nine months of 2006 with Lm299.3 million. The financial sector was also the main recipient in 2005 - Lm149.8 million as opposed Lm70.7 million during 2004.

The provisional FDI stock position in Malta at the end of 2005, stood at Lm1,448 million, an increase of Lm185 million over the end of the previous year, with Lm1,139 million attributable to EU member states (the same as at the end of 2004). Direct investment in Malta by non-EU countries totalled Lm308 million in 2005, a rise of Lm178.8 million over the previous year.

Provisional Direct Investment (DI) flows abroad by Maltese resident entities fell by Lm2.1 million in the first nine months of 2006. In 2005, total DI outflows declined by Lm8 million (compared to a decrease of Lm0.6 million in 2004). This shift was mainly conditioned by the other capital component due to a net increase in claims of Lm9.6 million (compared to a decrease of Lm6.6 in 2004) as well as by an increase in liabilities of Lm27.2 million.

The hotels, restaurants and real estate sector was the principal direct investor abroad in both 2004 and 2005, amounting to Lm11.1 million and Lm24.2 million respectively. Indeed, this was mainly due to inter-company loan transactions.

The provisional stock position of direct investment abroad at the end of 2005 totalled Lm333.6 million, consisting of Lm138.9 million investment in the EU and Lm194.7 million in the rest of world. This implied in a decline of Lm3.4 million over 2004.