IFSC dominates investment activity

The International Financial Services Centre (IFSC) has dominated foreign investment activity for the past four years, according to new data.

At the end of 2001, IFSC companies accounted for 78 per cent of all foreign assets held in the Republic.

At that time, the overall stock stood at €829.7 billion, a 128 per cent increase on the €363.7 billion in total foreign assets held in the Republic four years previously.

The figures, taken from a new series issued by the Central Statistics Office (CSO), reflect a variety of investments in equity and debt securities issued by non-residents, as well as deposits placed in foreign banks and loans. The series has been extracted from balance of payments data.

The IFSC has been the main player in this area since 1998, when it held 65 per cent of total foreign assets in the Republic.

Last year's figures show that foreign assets are most commonly-held as portfolio investments, with 60 per cent of total foreign investments falling into this category.

The next most popular foreign assets included loans, deposits, trade credits and derivatives.

On the other side of the investment picture, the data show that the IFSC is also the Republic's largest source of liabilities, or obligations, due to foreign residents.

In 1998, IFSC companies had foreign liabilities of €229 billion, almost 70 per cent of the total.

By the end of last year, IFSC obligations to non-residents had risen to €602 billion, or 72 per cent of overall foreign liabilities.

As with foreign assets, the most common international liabilities are portfolio investments.

Most striking within the liability numbers is the extent of growth recorded in direct investment in the Republic since 1998.

This type of obligation, which reflects investments made to acquire a long-term interest in an enterprise, has tripled from €53 billion in 1998 to €157 billion in 2001.

When liabilities are viewed beside assets, the Republic's net investment position is seen to shift from €30.3 billion in 1998 to minus €12 billion at the end of 2001.