Direct Investment Income up substantially by 40.6%

14 Mar '08

3 min read

Within total factor income inflow, Direct Investment Income (DII) increased substantially by 40.6% over a year earlier, mainly due to increased earnings of some prominent local enterprises from investment abroad. Portfolio Investment Income (PII) increased by 18.1%, mainly attributable to the increase in dividend income received from holdings of non-resident shares during the period.

Other Investment Income (OII) surged by 42.8% over a year earlier, mainly on account of increased interest income from offshore loans and deposits of the local banking sector, which in turn was the combined result of increases in interest rates and external assets of the local banking sector.

Within total factor income outflow, DII rose considerably by 30.8% over a year earlier, largely attributable to increased earnings of some prominent multinational enterprises from investment in Hong Kong during the period.

PII decreased marginally by 0.7%, mainly due to the decrease in dividend income received from holdings of a number of resident publicly listed companies by non-resident investors. OII increased significantly by 37.2%, largely caused by increased liabilities of the local banking sector and higher interest rates.

Analysed by country/territory, the mainland of China continued to be the largest source of Hong Kong's external factor income inflow in the fourth quarter of 2007, accounting for 28.3%.

This was followed by the British VirginIslands, with a share of 26.0%, reflecting continued investment income inflow from this tax haven economy where Hong Kong companies had set up a considerable number of holding companies. Other major source countries/territories were the United States of America and the United Kingdom, at 8.6% and 7.0% respectively.

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