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Yields on direct investment assets declined in 2020

The return on direct investment assets is low

Revenue on Swedish foreign direct investment assets abroad fell by SEK 33 billion in 2020 compared to 2019, and the total was SEK 293 billion. The manufacturing sector was the biggest contributor to the decline, with revenues falling from $ 164 billion to $ 147 billion. Revenue on foreign direct investment assets in Sweden declined by SEK 22 billion and SEK 201 billion by the same comparison. Here, too, the manufacturing sector contributed greatly to the decline, from SEK 114 billion to SEK 97 billion.

Swedish foreign direct investment assets abroad have declined slightly

At the end of 2020, Swedish foreign direct investment assets abroad were SEK 3,802 billion. This is 23 billion less SEK compared to the end of 2019. Of the total Swedish direct investment assets abroad, equity is SEK 3,231 billion, an increase of SEK 11 billion compared to the end of 2019. Net receipts of foreign subsidiaries, sister companies and related firms were SEK 571 billion, down 34 billion SEK compared to 2019.

Sweden’s largest foreign direct investment assets abroad are found primarily in the United States but are also found in most European countries, with the Netherlands, the United Kingdom and Norway making the largest contributions. Swedish foreign direct investment assets in the United States stood at SEK 703 billion at the end of 2020, an increase of 22.8 percent compared to the end of 2019. The Netherlands, Denmark and Finland are the countries most affected by 2020. As in previous years, the largest assets abroad are held by companies that manufacture metals, metal products, electronics and other machinery, as well as companies operating in finance and insurance.

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Of the total foreign direct investment assets, SEK 110 billion was controlled by Swedish “special purpose companies” (SPEs). SPEs are ultimately foreign-controlled companies and hold assets and liabilities and have limited operations within Sweden. By reporting data separately to SPEs, you get a more meaningful measure of a country’s incoming and outgoing direct investments.

Development of the Swedish krona

According to the KIX index, the Swedish krona strengthened by about 7.2 percent against other currencies in 2020. The krona strengthened about 3.8 percent against the euro and about 12.1 percent against the dollar. Strengthening the krona contributes to the reduction in the value of direct investment assets and returns abroad, which is expressed in the Swedish kronor.