Foreign direct investment (FDI) refers to the investment made by individuals, companies, or entities from one country into businesses, assets, or ventures located in another country.

FDI plays a pivotal role in global economic development, as it facilitates capital flows, fosters business expansion, and contributes to job creation and economic growth.

In this graphic, we illustrate the top 10 emerging markets according to their FDI momentum in 2024. This ranking comes from fDi Intelligence and was published in December 2023.
Cambodia Tops the List

The 10 countries with the strongest FDI prospects for 2024 are spread across Asia, Africa, the Middle East, and Europe.

Asia features six countries on the list, with Cambodia expected to carry the strongest investment momentum this year.

With a GDP growth forecasted at 6.1% in 2024, up from 5.6% in 2023, the IMF expects Cambodia to be the fastest-growing economy in Southeast Asia. The country has strengthened its trade relationships with China, South Korea, and the EU.
Additionally, Cambodia has benefited from a recovery in tourism since China started lifting its COVID-related travel restrictions earlier in 2023.

Meanwhile, the IMF expects the Philippines, in second place, increase GDP growth from 5.3% to 5.9% in 2024.

Both public and private investment have played a key role in reinforcing its growth, bolstered by the opening of the renewable energy sector to foreign investors.
Kenya occupies the third spot.
The African nation has seen increasing foreign direct investment in various sectors.

Recently, the U.S.-based pharmaceutical company Moderna finalized an agreement to invest up to $500 million to build its first African facility for the production of messenger RNA (mRNA) vaccines in Kenya—one of the first of its kind in Africa.

The country’s energy sector has also attracted strong FDI interest, with Dubai-based AMEA Power announcing in September 2023 the intention to produce green hydrogen in Mombasa, with total investment estimated at $2.29 billion.

Serbia was the only country outside Asia and Africa to make it into the top 10, securing ninth place. Source: Visual Capitalist

KUALA LUMPUR: While the country’s trade outlook for 2024 indicates exports are expected to rebound by 4.3% year-on-year from a decline of 8% in 2023, Thailand’s Chumphon-Ranong Land Bridge megaproject has sent shudders among supply chain experts who fear its impact on the future of Malaysian sea exports.

Malaysia University of Science and Technology CEO Prof Dr Premkumar Rajagopal, who has 13 years of supply chain experience, said the Chumphon-Ranong Land Bridge’s initial phase, which is expected to be completed in 2030, will reshape regional trade dynamics.

Located in Thailand’s southern Ranong province, the 90km bridge, which is expected to be fully completed in 2039 at a total cost of RM130 billion, will have potential implications for Malaysia’s economy and strategic positioning.

“Once completed, the bridge will potentially divert shipping away from Malaysia and Singapore as it aims to create a new trade route linking the Indian and Pacific Oceans and cut down transport time through the Malacca Straits by six to nine days,” he said.

The bridge involves two deep sea ports on Thailand’s eastern and western coasts, which will be connected by a rail and road system. The eastern port will be located in Chumphon province on the Gulf of Thailand, while the other will be situated in Ranong province on the Andaman Sea.

“Shipping from Ranong port to India, the Middle East, Africa and Europe may take seven to 30 days, while travel from Southern China to Ranong port will take not more than five days.”

However, Premkumar said while the shortened travel distances may offer cost savings for some shipments, the increased handling fees and logistical complexities could pose challenges for the Thais.

He said any changes in trade routes or infrastructure projects due to the Thai bridge can have profound effects on Westports and the Port of Tanjung Pelepas which significantly contribute to the national economy.

To mitigate the potential negative economic effects, he emphasised that it is critical to embrace digitalisation and innovation in port operations, foster competitiveness, and enhance connectivity to global supply chains.

“The Thai bridge may necessitate a reassessment of Malaysia’s strategic positioning in regional economic initiatives like Asean and China’s Belt and Road project.

“Proactive engagement, infrastructure investments, and alignment with regional cooperation frameworks are essential for Malaysia to effectively navigate evolving economic dynamics.” Premkumar said Malaysia needs to do more research and address the future impact of the bridge.

“Collaboration and innovation will be crucial to securing our position as a key player in regional trade and economic development. We must implement strategies that allow us to emerge stronger and more resilient in the evolving economy,” he said.

However, Malaysia’s biggest port operator, Westports Holdings Bhd, remains unfazed by the Thai bridge project.

Chairman Datuk Ruben Emir Gnanalingam Abdullah said he is not worried because his customers have yet to seriously consider the bridge as an alternative to sea shipping.

“We are considering external strategic investors to fund an RM39.6 billion expansion, which will nearly double our capacity in the coming decades.”

Ruben said bringing strategic investors on board can add value to Westports, which is also considering a dividend reinvestment plan and borrowings to support the expansion of its Klang facilities.

“Westports is the second-largest port in Southeast Asia, and we plan to increase capacity to 27 million 20-foot equivalent units (teu) from the current 14 million teu by 2082.” Source: The Sun

As workplace trends continue to shift in the post-pandemic landscape, the office real estate sector in the United States has been hard hit. Due to the ongoing shift towards remote and hybrid work models, vacancy rates of office buildings in the country are rising and leasing activity falling. Washington DC, the capital city of the US, has been among the hardest hit office markets in the country.

Even New York City is seeing massive distress and destruction in value for prime commercial real estate office buildings. As a result, office spaces which have become obsolete are now being sold at massive discounts.

In a post on X, a real estate entrepreneur shared that an office building in Washington DC was sold at a 75 per cent discount. The 1,75,000 sq ft tower at 1101 Vermont Avenue was sold for $16 million, he said, adding that the building was last sold for $60 million in 2006. Surprisingly, the building’s assessed value in 2018 was $72 million in 2018.

”Another Washington DC office building has just sold at a massive ~75% discount to what it last sold for The 175k sq ft tower at 1101 Vermont Ave sold for $16M. The building last sold for $60M in 2006 The assessment value in 2018 was $72M in 2018,” he wrote while sharing a picture of the building.

Kotak Mutual Fund’s Managing Director Nilesh Shah reacted to the post and said this Washington DC building goes for Rs 7,589 per square foot, 73 per cent lower than the last traded price 18 years back.

”I did this calculation twice to confirm the number. Commercial real estate in the US is truly in deflation/fire sale. Who bears all these losses?” he added.

Recently, an office tower in New York’s upmarket Manhattan was also sold at a 70 per cent discount, leaving many shocked. Industrialist Uday Kotak also expressed surprise over the massive rate cut for the Manhattan property.

“Wow, That’s less than half the rate at Mumbai’s BKC,” he wrote.
According to a report, the average U.S. office listing rate stood at $37.83, falling 1.2% year-over-year Source: NDTV

Saudi Arabia has scaled back its medium-term ambitions for the desert development of Neom, the biggest project within Crown Prince Mohammed bin Salman’s plans for diversifying the oil-dependent economy, according to people familiar with the matter.

By 2030, the government at one point hoped to have 1.5 million residents living in The Line, a sprawling, futuristic city it plans to contain within a pair of mirror-clad skyscrapers. Now, officials expect the development will house fewer than 300,000 residents by that time, according to a person familiar with the matter.

Officials have long said The Line would be built in stages and they expect it to ultimately cover a 170-kilometer stretch of desert along the coast. With the latest pullback, though, officials expect to have just 2.4 kilometers of the project completed by 2030, the person familiar with the matter said, who asked not to be named discussing non-public information.

As a result, at least one contractor has started to dismiss a portion of the workers it employs on the site, according to a document seen by Bloomberg.

Representatives for Neom and the kingdom’s Public Investment Fund, the main entity that owns and is funding the project, declined to comment.

Crown Prince Mohammed intends for Neom, a $1.5 trillion development on the Red Sea coast, to be a showpiece that will transform his country’s economy and serve as a testbed for technologies that could revolutionize daily life. Along with The Line, Neom’s plans include an industrial city, ports and tourism developments. It’s also set to host the Asian Winter Games in 2029 at a mountain resort called Trojena.

A longer period is needed to “build factories, build even sufficient human resources,” Finance Minister Mohammed Al Jadaan said in December. “The delay or rather the extension of some projects will serve the economy.”

To be sure, work is continuing on other parts of the broader Neom project and officials have maintained their overall objectives for The Line, people familiar with the matter said. For instance, another development within Neom that is turning an island in the Red Sea into a luxury tourist destination known as Sindalah is due to open this year.

The pullback on The Line comes as the kingdom’s sovereign wealth fund has yet to approve Neom’s budget for 2024, the people familiar with the matter said. It shows that the financial realities of the trillions of dollars of investment are starting to cause concern at the highest levels of the Saudi government as it tries to fulfill its ambitious Vision 2030 program, the overarching initiative tasked with diversifying the kingdom’s economy.

Already, officials have said that some of the projects outlined in that program will be delayed past 2030. Source: Bloomberg