By the end of 1999, the city-state's total overseas investments reached S$191 billion, equivalent to almost US$110 billion at current exchange rates, according to a newly issued government report.

This represents a 7.4 percent annual growth in aggregate overseas investment, from S$178 billion in 1998.

The survey added that direct overseas investment, which concentrated on financial services and manufacturing, climbed to S$84.2 billion, up 11 percent from $75.6 billion in 1998.

Portfolio investment fell slightly to S$35.96 billion, from $36.15 billion in 1998.

China received the most direct investments, getting 15 percent of the total, followed by Hong Kong at 10 percent, displacing Malaysia as the second largest host country.

The report said 63 percent of Singapore investment in China was in manufacturing, adding that "investors were probably attracted by her relatively abundant, cheap and skilled labour as well as large domestic market."

Real estate, the second most favoured segment in the mainland, suffered a slight drop "probably due to the less than sanguine outlook in the property sector resulting from over-supply."

The report attributed the growth in overseas investment to Singapore companies expanding their equity shares in overseas affliates.

"The swift turnaround of the economic activity in the region and the continued healthy growth in the developed countries have led to the improved profitability of the overseas affiliates," it said.

Interest was concentrated in developed countries like Belgium and the United States and more stable Asian economies like Taiwan, South Korea and Thailand "where the economic outlook was generally more optimistic vis-a-vis other Asian economies like Indonesia and the Philippines."

But the survey noted that the number of overseas affiliates set up had declined marginally as "investors were still wary in setting up new overseas ventures, especially in the regional economies despite their swift recovery from the 1997/98 financial crisis."

It added that companies remained cautious and continued to consolidate their investments on the region.

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