MORE than half of the Singapore companies that invested overseas in 2011 picked fast-growing Asian countries as their preferred destinations.

The region received a total of S$240 billion (US$195 billion) or 57.7 per cent of Singapore`s direct investments abroad that year, according to the latest data released yesterday by trade agency IE Singapore.

This was a 6.5 per cent rise from levels seen the year before.

In contrast, direct investments in all destinations combined increased by just 1.7 per cent to S$416.4 billion in 2011.

Within Asia, China was the top recipient of direct investments from Singapore, raking in S$76.6 billion. Malaysia came in second with $34 billion, while Indonesia was third with S$32.3 billion.

The appeal of such emerging economies lies in their favourable demographics, the agency said. It expects Singapore firms investing abroad to continue focusing on developing markets.`Emerging markets are not insulated from the global slowdown but they continue to be the engine of growth for our investments and trade,` said IE Singapore chief executive Teo Eng Cheong.

`The growing middle class, young population and urbanisation in these markets offer opportunities that will fuel our companies` growth.

One of the major investments made by Singapore firms in Asia in 2011 came from Hyflux, which invested S$39 million in a wastewater treatment plant in China. Another came from Frasers Hospitality, which invested S$37 million to set up Frasers Residence Sudirman in Indonesia.

Malaysia, China and Indonesia were the main drivers of growth in Singapore`s total trade last year, which rose to S$984.9 billion, up 1.1 per cent from levels in 2011.

Trade with Malaysia, Singapore`s largest trading partner, rose 1.3 per cent from levels in 2011 to S$113.4 billion last year.

Trade with China climbed 2.4 per cent to reach S$103.8 billion, while trade with Indonesia increased 1.8 per cent to S$79.4 billion. China and Indonesia are Singapore`s thirdand fourth-largest trading partners respectively.

-ANNIThe Straits Times