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 third- and fourth-largest trading partners respectively.—ANN/The Straits Times