Investment from Japan and the United States falls

The combined value of foreign investment in New Zealand from Japan and the United States was $9.4 billion lower at 31 March 2010 than a year earlier, Statistics New Zealand said today.

Along with lower investment from Singapore, this contributed to a 1.8 percent fall in foreign investment in New Zealand in the March 2010 year, down to $288.6 billion at 31 March 2010.

"Over the same time, the value of New Zealand's investment abroad remained relatively stable," balance of payments manager John Morris said. "This resulted in New Zealand's net liability position falling by $6.0 billion from 31 March 2009."

Australia remains New Zealand’s main investment partner. At 31 March 2010, the level of Australian investment in New Zealand reached $100.0 billion for the first time, accounting for 34.6 percent of total investment. Australia also accounts for 28.4 percent of New Zealand's investment abroad.
Australia is our leading source of direct investment and other investment, while the United States and United Kingdom are our main sources of portfolio investment, due to purchases of debt securities issued by New Zealand banks. Together, these three countries accounted for 68.4 percent of total foreign investment in New Zealand.
Most foreign investment in New Zealand is through debt instruments rather than equity. At 31 March 2010, New Zealand’s foreign currency denominated external debt was $116.4 billion. Of this debt, 93.3 percent was hedged to manage risk, mainly using financial derivative contracts.

New Zealand’s total investment abroad was $127.6 billion at 31 March 2010. Investment in New Zealand’s three main investment partners fell from 63.0 percent of total investment abroad at 31 March 2009 to 58.2 percent at 31 March 2010. The decrease was driven by lower values of investments in the United States and United Kingdom.

The finance and insurance industry continues to dominate New Zealand’s international assets and liabilities, despite its liabilities falling $11.5 billion in value in the latest March year. The public administration industry increased the value of its overseas liabilities by $4.4 billion over the same period, driven by foreign investors purchasing debt securities issued by the New Zealand Government.
The value of New Zealand's manufacturing industry assets abroad fell $5.9 billion in the latest year, while the public administration industry increased the value of its overseas assets by $4.5 billion.