Anglo-Saxon countries most popular targets for Dutch investment
At end-2011 the United States and the United Kingdom were the main targets for direct investment and portfolio investment from the Netherlands. These countries accounted for more than a quarter of Dutch exposures, according to new statistics released by De Nederlandsche Bank on its website today.
The leading position of the United States notably reflects extensive Dutch equity holdings in US enterprises (see chart). At EUR 163 billion, the position in US equities is approximately triple that in UK equities, which are the second most popular investment target. The United Kingdom is the main target country for foreign direct investment from Dutch enterprises, followed by the United States, Luxembourg, Germany and Switzerland. Direct investment exposures to Ireland and Bermuda are also relatively sizeable. In some cases, these exposures are partly influenced by tax incentives. At end-2011 Dutch investors held foreign debt securities totalling EUR 627 billion, with two-thirds of the value of this investment stemming from euro area countries. Of those securities issued in euro area countries, more than 60 per cent was issued in Germany and France.
The newly published statistical tables present data for the past three years. Since 2009, especially Germany’s popularity among Dutch direct investors and securities investors has strongly increased (see chart below). Investment in German Bunds, which are deemed relatively safe, grew particularly sharply, from EUR 85 billion in 2009 to EUR 140 billion at end-2011. Exposures to France in 2011 were down on 2010, when they had increased. Dutch portfolio investment in the so-termed GIIPS euro area countries declined by almost 30 per cent since 2009, while direct investment in these countries intensified by 18 per cent. The amount of total exposures to these countries was hence virtually unchanged. Direct investment growth in Spain, Ireland and Portugal was particularly brisk. However, these increases stemmed entirely from the expansion of investment by Dutch special financial institutions; other financial and non-financial enterprises actually withdrew direct investment from these countries.1 Besides direct investment, notably securities investment was pulled out of Italy and Greece. Between end-2009 and end-2011, the value of Dutch securities investment in Italy declined from EUR 67 billion to EUR 39 billion and in Greece from EUR 15 billion to EUR 2 billion.
The new tables with many geographical details on direct investment and portfolio investment – components of the financial account of the Dutch balance of payments – are available on DNB’s statistics website. Besides the outward direct investment exposures of Dutch enterprises, inward direct investment is also broken down by a large number of source countries. Breakdowns of Dutch investment in foreign securities are published by country, instrument and sector of the domestic holder. These statistical data are of great interest internationally. The International Monetary Fund (IMF) stimulates all member countries to make such information available and also collects these figures in a database that can be accessed through the IMF’s website.2 The website presents information on (part of) each participating country’s exposures to a large number of countries; conversely, it also shows which countries have the largest exposures to a particular country.
Note 1. To aid international comparability, the exposures of special financial institutions are incorporated in the Dutch data. These are enterprises that, because of the favourable tax and business climate, have based themselves in the Netherlands for the purpose of routing financial flows for enterprises with a foreign parent company.
Note 2. See the IMFs CDIS and CPIS databases. The IMF will publish data over the year 2011 in the fourth quarter of 2012.
For more information please contact Flore Kraaijeveld (tel. +31 20 524 3091 and +31 6310 8660), Kees Verhagen (+31 20 524 2272 and +31 06-2112 3922) or Remko Vellenga (+31 20 524 2712 and +31 6 5249 6574).