Interest seen in energy, resources & infrastructure sectors: WongPartnership[SINGAPORE] Merger-and-acquisition (M&A) activity in the region is set to grow this year, if the political fabric of some countries such as Thailand remains intact.迷利倉"We're fairly positive on the M&A space here this year, though we'll have to keep our fingers crossed over how our neighbours develop - how Singapore fares will depend on the region," said Andrew Ang, head of the Corporate/Mergers & Acquisitions Practice and a partner in the Private Equity Practice at WongPartnership.Mr Ang is in a good position to share that view; WongPartnership was the top-ranking Singapore law firm by deal count for Asia-Pacific ex-Japan announced deals in 2013, according to Bloomberg.For 2014, Mr Ang sees continued interest in the energy, resources and infrastructure sectors, as well as education and healthcare, with investors in this part of the world inclined to use the Republic as their base.However, M&A activity in the region will be affected to some extent by political stability in certain countries.Thailand's political climate is perhaps of greatest concern at the moment. "Thailand is a bit of a shame - its capital markets were flourishing, investors were coming back, it had a lot going for it, but now there's this political dampener," Mr Ang said.The country's stock market thrived last year, partly because of a loosening of regulations that govern stock listings, which in turn led to an increased number of high-value initial public offerings (IPOs). Mr Ang noted that firms were busy handling the surge in Thai companies' cross-border M&A activity and the launch of the country's first infrastructure funds and real estate investment trusts (Reits) - a new addition to the country's flourishing real estate market.Thailand also recorded high levels of outbound investment last year. Singapore and Myanmar were the primary magnets, followed by Indonesia and Vietnam.Despite the political uncertainty, Mr Ang reckoned that "Thailand is still a place we want to keep our eye on" and the outbound deals are likely to continue. He also revealed that WongPartnership is in preliminary discussions on some possible deals, but there's "nothing concrete yet".The firm advised on the largest deal coming out of Thailand in 2012/2013: the debt-funded acquisition of Fraser & Neave by the common majority shareholder of TCC Assets and ThaiBev.Elsewhere in Asia, Mr Ang highlighted Malaysia as the most attractive investment target in the region after Singapore. "Investment there slowed down a little last year due to the elections, but enthusiasm and interest is now returning," he said, citing the country's well-developed legal framework and pro-business policies as selling points.Last year, Malaysia introduced the Financial Services Act and the Islamic Financial Services Act. The latter, noted Mr Ang, was partly an attempt by the government to make its Syariah-compliant financial services market more attractive to in迷你倉estors. He added that some firms have elected to make the two Acts an area of focus to attract enquiries from foreign companies."The pro-business government has been supportive in particular of the Iskandar region, giving special exemption for real capital gains tax, for example. Regardless of which party is in power, the atmosphere (in Malaysia) is pro-investment. Thus there is great interest among private-equity funds from all over in Malaysia. Some Malaysian businesses don't require PE funding but the owners are happy to cash out of some of their investments through stake sales."And while Myanmar may seem like a fad to some, Mr Ang believes there is real potential there. He said investing in the country still presents a number of "unknowns" and, as a result, it's not attractive to private-equity firms."It's more for corporates from the consumer, real estate and infrastructure sectors. You will still need to team up with a local partner, though, if you want to invest successfully in Myanmar."The Japanese investors are still there in a big way; in fact, they never left - we know this from our interaction with Japanese law firms. Singapore is a beneficiary of that, being one of the few countries in the region with a double-tax agreement with Myanmar, so investors like the Japanese use Singapore as a base."He added that the test for Myanmar will be the next elections.In similar vein, investors will be watching this year's elections in Indonesia very closely.Said Mr Ang: "With the 2014 elections looming, the government has focused on policies aimed at controlling foreign investment in certain sectors such as mining and banking. Inconsistent regulatory changes and continued concerns over corruption are fuelling uncertainty among investors and having a knock-on effect by delaying badly needed infrastructure development."With the rupiah's slide, Indonesian owners are reluctant to sell at a discount. They can also afford to be patient as they are well capitalised and don't require funding."In the case of China, Mr Ang foresees a rebound in M&A activity this year.He said: "Over a year ago, there was a general reduction in China- related M&A activity, with the weak global economy, the sovereign debt crisis in Europe and China's leadership change all being contributing factors. The private-equity sector in Greater China has also struggled in recent times, and the continued uncertainty in the global economy and shifting investment strategies have led to an increase in divestments by multinational companies and other foreign investors."However, we are increasingly witnessing greater enthusiasm now among Chinese funds, especially PEs like Citic and CDH buying S-chips here in Singapore. These funds are taking a larger role than internal funding, previously the preferred funding route, for S-chips."Mr Ang added that he is seeing interest among Chinese funds not just in S-chips or deals with a Chinese element, but also in deals involving regional or global players.自存倉
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