As of December 2008, the level of Malaysia's net international investment position improved further to achieve a net creditor country position. The value of Malaysian owned assets abroad exceeded the value of foreign owned assets inMalaysia by RM133.9 billion against-RM18.5 billion as at end of 2007. This position was attributed to the strengthening of external assets to RM769.4 billion(2007: RM742.9 billion) and significant decline in external liabilities to RM635.5 billion (2007: RM761.4 billion).
As of December 2008, total external assets increased by RM26.5 billion or 3.6% to RM769.4 billion, from that of RM742.9 billion in 2007. Such an increase was attributable to the improvement of direct investment abroad (DIA) which manage to offset the decrease in reserve assets and other investment.
As of December 2008, the total financial liabilities contracted RM126.0 billion or 16.5% to RM635.5 billion (2007: RM761.4 billion), primarily due to lower stock position in portfolio investment as well as other investment.
Foreign direct investment (FDI) was the largest component of total external liabilities, followed by portfolio investment, other investment and financial derivatives.
The year 2008 saw DIA expanded more than seven times over the last seven years. The level surged to RM234.1 billion (2007: RM192.5 billion), an increase of RM41.6 billion or 21.6%, following positive growth in equity capital & reinvested earnings by RM35.7 billion or 31.6% to attain RM149.0 billion (2007: RM113.3 billion). The bulk of this investment was generated from oil & gas sector, 32.3% followed by financial intermediation sector, 24.2% and manufacturing sector at 9.8%.
Meanwhile, since 2001 FDI in Malaysia grew almost two fold to stand at RM253.8 billion (34.4% of 2008 GDP). Equity capital reinvested earnings component formed the largest portion of FDI of RM238.3 billion. The manufacturing sector maintained its position as leading FDI recipient at 48.9%, followed by financial intermediation sector, 20.4% and oil & gas sector at 7.6%.
As of December 2008, portfolio investment assets accumulated to RM56.2 billion (2007: RM50.7 billion), an increase of RM5.5 billion or 10.8%, mainly due to higher level of debt securities of RM6.7 billion or 72.7% owned by residents. Meanwhile, the equity securities recorded a minimal decrease in the investment amounting to RM40.2 billion (2007: RM41.4 billion).
Total portfolio investment liabilities, issued by official and private sector dropped sharply by RM118.4 billion or 34.7% to RM222.9 billion (2007: RM341.3 billion). Huge withdrawal of equity securities by non-residents was in tandem with stock exchange performance led to the fall of RM129.5 billion or 57.5% to RM95.9 billion (2007: RM225.5 billion).
Similarly, other investment liabilities also showed a downward trend at RM151.4 billion (2007: RM165.0 billion), a decrease of RM13.6 billion or 8.3%.