KUALA LUMPUR: Malaysia’s deal activity outlook is brightening, with research and analysis consultancy Oxford Economics expecting the number of mergers and acquisitions (M&A) transactions in Malaysia to increase to 221 deals in 2020, from an expected 218 deals in 2019.
“But the value of these deals to fall to US$6.5 billion from US$8.9 billion,“ according to law firm Wong & Partners’ fifth annual Global Transactions Forecast report, which is produced in conjunction with Oxford Economics released today.
Commenting on the report, Wong & Partners deputy managing partner from the corporate, commercial and securities practice, Munir Abdul Aziz expects the M&A and capital market activities in the country in 2019 and 2020 would be driven by three principal factors, namely:
“The continued rationalisation and streamlining of assets and businesses held by government-linked corporations and pension and investment funds; investments and divestments by private equity sponsors, as well as valuation arbitrage arising from buy-outs of undervalued businesses within listed corporations,“ he said.
Munir also anticipated that Malaysia would be a beneficiary of the re-alignment of supply chains arising from the trade tensions betweesn the US and China.
“This is because multinationals take advantage of Malaysia’s strategic position at the heart of Southeast Asia, an open trading economy in which it is relatively easy to do business, and a commitment by a new government that is beginning to undertake structural reforms of institutions and bottlenecks in the economy,“ he said.
He added that the outlook for capital markets is beginning to brighten, but noted that long lead times and inherent market and valuation risks in initial public offering (IPO) processes continue to cloud the attractiveness of listings. -- Bernama
