Brexit fails to dent UK-New Zealand investment values

The value of investment between New Zealand and the United Kingdom has risen since the UK voted to leave the European Union and the value of UK sterling plunged, the New Zealand government statistics agency said Friday.

Britons voted for "Brexit" on June 23 a process Prime Minister Theresa May plans to complete by March 2019 and the British pound hit a 31-year low against the U.S. dollars in the immediate aftermath of the vote.

New Zealand had 32.7 billion NZ dollars (23.36 billion U.S. dollars) invested in the UK 14 percent of its total investment abroad at the end of June, according to a report from Statistics New Zealand.

At the same time, the UK held 76.6 billion NZ dollars (54.73 billion U.S. dollars) of investment in New Zealand, 20 percent of the total overseas investment in New Zealand.

Despite the exchange rate changes at the end of June, affecting the value of New Zealand's assets and liabilities, a rise in the level of investment in the UK and investment from the UK in New Zealand meant the overall value of investment was still up from the end of March.

New Zealand's assets were up 400 million NZ dollars (285.8 million U.S. dollars) and its liabilities rose by 2.3 billion NZ dollars (1.64 billion U.S. dollars).

New Zealand's investment in the UK included controlling investment in UK enterprises (direct investment), loans to the UK, and portfolio investment.

"Over a fifth of New Zealand's investment in the UK at the end of June 2016 was portfolio investment," international statistics manager Jason Attewell said in a statement.

The fall in the pound's value meant that New Zealand's portfolio investments in the UK were worth less in New Zealand dollars, and the value of portfolio investments held by the UK in New Zealand were worth more in pounds.

The value of portfolio investment increased overall as the level of portfolio assets and liabilities rose over the quarter.

The future impact of Brexit would be apparent on the value of goods and services trade with both the EU and the UK.

For the year ended June, New Zealand total exports to the UK were worth 3.1 billion NZ dollars (2.21 billion U.S. dollars), and total imports from the UK were worth 2.2 billion NZ dollars (1.57 billion U.S. dollars).

In the three months ending March, goods going to the UK accounted for 33 percent of exports to the EU, but this fell to 26 percent in the three months to June 2016.

Source : XINHUA