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5352.0 - International Investment Position, Australia: Supplementary Country Statistics, 2004  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 05/08/2005   
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NOTES


ABOUT THE PUBLICATION

International Investment Position, Australia: Supplementary Country Statistics (cat. no. 5352.0) presents statistics on Australia’s international investment position by selected countries, which supplements the quarterly publication, Balance of Payments and International Investment Position, Australia (cat. no. 5302.0). For foreign investment in Australia (liabilities), it includes details of country of investor, investment stocks (level of investment), flows (transactions) and associated income. For Australian investment abroad (assets), similar detail is provided in respect of country of investment. The non-transaction changes which occur due to exchange rate effects, other price effects and other changes in the levels of these assets and liabilities that are not due to transactions are not shown in this publication but do contribute to the level of investment.


The statistics are presented as time series for the years 2001, 2002, 2003 and 2004 inclusive and are consistent with those to be published in the June quarter 2005 issue of Balance of Payments and International Investment Position, Australia (cat. no. 5302.0).



ROUNDING

Discrepancies may occur between totals in this publication and the same aggregates from other sources, and between sums of component items and totals due to rounding.



INQUIRIES

For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070 or Sandra Waters on Canberra (02) 6252 7129.



CHANGES IN THIS ISSUE


CHANGES IN THIS ISSUE

There have been revisions to the international investment position (IIP) data. The 2003 issue of this publication presented data as it was presented in the March quarter 2004 issue of the quarterly Balance of Payments and International Investment Position, Australia (cat. no. 5302.0). This issue presents data as it will be presented in the June quarter 2005 issue, and incorporates revisions to data from September quarter 2000 and later that will appear in that publication. The revisions are the result of improved reporting and the identification and correction of errors.


This issue includes the addition of two countries to the list of countries separately identified.

  • East Timor, previously included in Asia n.e.s.; and
  • Bahamas, previously included in Central America and Caribbean.

Brazil is no longer separately identifiable and has been included in the data for America n.e.s.


Central America and Caribbean has been relabelled Central America and Caribbean n.e.s., to reflect the exclusion of countries separately identified.


The countries included in the European Union (EU) changed in 2004. For the purposes of this publication, the change is treated as if it happened at the end of the June quarter 2004. Transactions for the EU for 2004 are the sum of transactions for EU15 for the March quarter 2004 and June quarter 2004, and transactions for EU25 for September quarter 2004 and December quarter 2004. Income is treated in a similar manner. The position at the end of 2003 is the position for EU15, while the position at the end of 2004 is the position for EU25.


Unlike previous issues, compensation of employees is not included in income debits (table 3) and income credits (table 6); this issue only presents data on investment income. Compensation of employees is included in income debits and income credits in Balance of Payments, Australia: Supplementary Country Statistics (cat. no. 5338.0) but is not separately identified.


As identified in the International Monetary Fund's Balance of Payments Manual (BPM5, 1993), market valuation is the principle used for valuation of equity. Providers in the Survey of International Investment, the main source of information for this publication, are asked to value equity liabilities and equity assets on this basis. Some providers are unable to provide a market value and report net asset value. Where this creates a significant distortion, the ABS makes adjustments to approximate market valuation. The adjustment process has been extended to more providers in this publication. These adjustments have been applied across the full time series presented in this publication.


Annual time series of data for the calendar years 2001 to 2004 are also available in AusStats as Data Cubes (spreadsheet format) on the ABS web site <http://www.abs.gov.au>.

SUMMARY COMMENTARY

ANALYSIS OF RESULTS


INTERNATIONAL INVESTMENT POSITION

Australia’s net international investment position at 31 December 2004 was $505.1 billion, an increase of $54.9 billion on the previous year.


Level of foreign investment in Australia

The level of foreign investment in Australia increased by $165.1 billion in 2004 to reach $1154.8 billion at 31 December 2004. Portfolio investment accounted for $620.1 billion (54%), direct investment for $342.6 billion (30%), other investment liabilities for $143.6 billion (12%) and financial derivatives for $48.4 billion (4%). Of the portfolio investment liabilities, debt securities accounted for $432.0 billion (70%) and equity securities for $188.2 billion (30%).


The leading investor countries at 31 December 2004 were:

  • United States of America ($368.4 billion or 32%)
  • United Kingdom ($281.6 billion or 24%)
  • Japan ($43.8 billion or 4%)
  • Netherlands ($26.0 billion or 2%)
  • Hong Kong (SAR of China) ($23.4 billion or 2%)
  • New Zealand ($22.4 billion or 2%)
  • Switzerland ($20.5 billion or 2%)
  • Belgium and Luxembourg ($20.4 billion or 2%).

In addition, the level of borrowing raised on international capital markets (e.g. Eurobonds) was $137.9 billion or 12%.


The following graph illustrates the percentage share, by leading countries, of the total level of foreign investment in Australia at 31 December 2004.

FOREIGN INVESTMENT IN AUSTRALIA, LEVELS, 31 December 2004
Graph: FOREIGN INVESTMENT IN AUSTRALIA, LEVELS, 31 December 2004



Level of Australian investment abroad

The level of Australian investment abroad reached $649.7 billion at 31 December 2004, an increase of $110.2 billion on the previous year. Direct investment abroad accounted for $254.0 billion (39%), portfolio investment for $214.4 billion (33%), other investment for $85.0 billion (13%), financial derivatives for $48.8 billion (8%) and reserve assets for $47.4 billion (7%). Equity has been the main form of Australian investment abroad during the past decade. At $403.6 billion, equity represented 62% of the total level of investment at 31 December 2004.


The leading destination countries as at 31 December 2004 were:

  • United States of America ($292.1 billion or 45%)
  • United Kingdom ($111.8 billion or 17%)
  • New Zealand ($39.4 billion or 6%)
  • Japan ($24.2 billion or 4%)
  • Netherlands ($20.4 billion or 3%).

The following graph illustrates the percentage share, by leading countries, of the total level of Australian investment abroad at 31 December 2004.

AUSTRALIAN INVESTMENT ABROAD, LEVELS, 31 December 2004
Graph: AUSTRALIAN INVESTMENT ABROAD, LEVELS, 31 December 2004




FINANCIAL ACCOUNT TRANSACTIONS

The balance on financial account for the year ended 31 December 2004 recorded a net inflow (surplus) of $53.0 billion. This result is up $8.2 billion on the net inflow of $44.8 billion recorded for the previous year.


Foreign investment in Australia - Transactions

Foreign investment in Australia recorded a net inflow of $94.8 billion for the year ended 31 December 2004, an increase of $7.0 billion on the net inflow of $87.7 billion for the previous year.


The leading investor countries were:

  • United States of America ($54.4 billion or 57%)
  • Netherlands ($3.7 billion or 4%)
  • Canada ($3.6 billion or 4%)
  • Bermuda ($2.2 billion or 2%).

In addition, issues of borrowing raised on international capital markets (e.g. Eurobonds) were $19.8 billion or 21%.


The following graph illustrates the percentage share, by leading countries, of total financial transactions for foreign investment in Australian during the year ended 31 December 2004.

FOREIGN INVESTMENT IN AUSTRALIA, TRANSACTIONS, 2004
Graph: FOREIGN INVESTMENT IN AUSTRALIA, TRANSACTIONS, 2004



Australian investment abroad - Transactions

Australian investment abroad recorded a net outflow of $41.7 billion for the year ended 31 December 2004, an decrease of $1.1 billion on the net outflow of $42.9 billion for the previous year.


The leading destination countries were:

  • United States of America ($35.9 billion or 86%)
  • Netherlands ($2.7 billion or 6%)
  • Germany ($2.5 billion or 6%)
  • Japan ($1.4 billion or 3%)
  • New Zealand ($1.3 billion or 3%).

Countries from which large amounts of Australian investment was withdrawn in 2004 were:
  • Switzerland ($2.0 billion or -5%)
  • France ($1.3 billion or -3%).

The following graph illustrates the percentage share, by leading countries, of total financial transactions for Australian investment abroad during the year ended 31 December 2004.

AUSTRALIAN INVESTMENT ABROAD, TRANSACTIONS, 2004
Graph: AUSTRALIAN INVESTMENT ABROAD, TRANSACTIONS, 2004




INCOME

Income debits totalled $45.3 billion for the year ended 31 December 2004. This result is up $8.1 billion on the income debits in the previous year. The main countries to which income accrued for the year ended 31 December 2004:
  • United States of America ($11.5 billion or 25%)
  • United Kingdom ($8.2 billion or 18%)
  • Japan ($3.0 billion or 7%)
  • Switzerland ($1.7 billion or 4%)
  • Netherlands ($1.3 billion or 3%).

Income credits totalled $18.0 billion for the year ended 31 December 2004. This result is up $3.3 billion on the income credits in the previous year. The main countries from which income accrued for the year ended 31 December 2004 were:
  • United States of America ($7.2 billion or 40%)
  • New Zealand ($3.4 billion or 19%)
  • United Kingdom ($2.6 billion or 14%).

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