Press Release

Offshore Investment Pouring into Australian Economy

December 15, 2003 - Offshore investment in Australia has risen to over 35 percent of total OTC market turnover following a survey into the 2002-03 financial year's exchange-traded and over-the-counter (OTC) markets.

The survey was conducted by the Securities Industry Research Centre of Asia-Pacific (SIRCA), and demonstrates the Australian economy’s resilience, internationalisation, and sophistication.

The 2002-03 offshore investment total of 35 percent compares against the previous year’s total of around 31 percent. Offshore activity, in terms of turnover, in both the currency options and foreign exchange markets, have passed 50 percent for the first time in the survey’s history.

“In the six years SIRCA has been conducting this survey, foreign investment has never been so high”, said Dr Michael Briers, CEO, SIRCA. “The results reveal Australian institutions have increased their focus on dealing with international financial institutions”.

The findings show the financial markets are in excellent shape with turnover for all markets rising from $50,154 billion in 2001-02 to $56,288 billion in 2002-03. OTC and exchange-traded market turnover was 12.2 percent above that of the previous financial year.

“These results further emphasise the relative attractiveness of the Australian market to overseas investors”, said Dr Briers. “Part of this increasing offshore involvement can be attributed to the price of the Australian dollar and a series of Federal Government reductions in impediments to foreign investment”.

Total OTC financial markets turnover grew by 12 percent from $37,918 billion in 2001-02 to $42,462 billion in 2002-03. In addition, OTC electricity turnover (megawatt hours) increased almost 40 percent, with Renewable Energy Certificate Transactions increasing by 23 percent. Total Exchange traded markets increased by 13 percent from $12,236 billion in 2001-02 to $13,826 billion in 2002-03.

Despite declines in turnover in 2002-03 from fixed income – Government Debt Securities, Non-Government Debt Securities; Repurchase Agreements, Forward Rate Agreements, and Interest Rate Options - these failed to dent the overall buoyancy of the Australian financial markets.

SIRCA sourced data from the Australian Stock Exchange (ASX), the Sydney Futures Exchange (SFE), and the Reserve Bank of Australia (RBA), and compiled the OTC portion of the report using surveys from 17 banks and 15 electricity organisations.

The survey was conducted as part of a financial markets study for the Australian Financial Markets Association (AFMA), providing a unique insight into market activity and trends in the Australian financial services sector for the financial year 2002-03.

Copies of this report can be obtained from the AFMA website.

About SIRCA
SIRCA is the region's leading financial services research hub.

Press Contacts
Communications Officer, SIRCA Limited
(612) 9231 5888, media@sirca.org.au

Go to 2002-03 Australian Financial Markets Report