[Global Corporate Investment Red Hot ①] Apple 476 Trillion KRW · TSMC 111 Trillion KRW... What About Korean Companies?

Morgan Stanley's Global Investment Outlook for Year-End: "Expected to Recover to 121% of Pre-COVID Levels"
Recovery Faster Than 2008 Financial Crisis...Urgent Need for Domestic Companies to Proactively Enter New Markets

[Photo by Reuters Yonhap News]

[Asia Economy Reporter Park Byung-hee] Apple invests 476 trillion won over 5 years, TSMC 111 trillion won over 3 years….

As major countries reopen their economies, companies worldwide are rapidly increasing investments to prepare for the post-COVID-19 pandemic era. Domestic companies are also facing a situation where they must respond quickly. In line with this, there are calls for our government to abolish various corporate regulations and create a favorable investment environment.

According to the British economic weekly The Economist on the 31st (local time), US investment bank Morgan Stanley expects global investment to reach 121% of pre-COVID-19 levels by the end of this year. This suggests that corporate capital expenditures will far exceed pre-pandemic levels. Chattan Aya, Morgan Stanley’s chief researcher, recently appeared on a podcast titled “The Red Hot Capex Cycle” and predicted that global capital expenditures will explode in the future. As COVID-19 quarantine measures are lifted due to vaccine distribution, pent-up consumption is surging, and companies are making large-scale investments to capture new markets.

In fact, the Organisation for Economic Co-operation and Development (OECD) forecasted global economic growth this year at 5.8%, the highest since 1973. Consumption and investment are progressing faster than expected, leading to a 1 percentage point upward revision from the forecast made in December last year.

This trend is distinctly different from the situation after the 2008 financial crisis. According to The Economist, it took more than two years for global investment levels to recover to pre-financial crisis levels during the global financial crisis. In contrast, recovery from the COVID-19 situation is occurring in about a year. The Economist explained that although the investment contraction after COVID-19 was more severe than during the global financial crisis, the recovery is happening faster.

Corporate fundraising activities in preparation for large-scale investment opportunities are also active. The initial public offering (IPO) market is experiencing an all-time boom, and corporate bond issuance is flooding the market.

According to financial information firm Dealogic, as of the 26th of last month, 97 US companies have issued convertible bonds (CB) worth $54.3 billion this year. The issuance amount increased by 11% compared to the same period last year, reaching an all-time high.

This content was produced with the assistance of AI translation services.