Singapore corporates hungry for M&As despite slowing growth

Capacity to fund deals will jump 15% this year.

More mergers and acquisitions are on the cards for Singapore-based companies in 2016, according to KPMG’s latest Global M&A Predictor.

KPMG expects a 15% increase in the capacity to fund M&A growth among Singapore-based companies.

This increase in appetite comes in spite of the Chinese economic slowdown, the rising interest rates, and persistently low oil prices.

“Transactional activity is expected to remain relatively strong due to relatively low cost of financing and the hunger for inorganic growth in the current weak economy,” said Benjamin Ong, Head of Mergers & Acquisitions and Capital Advisory, KPMG in Singapore.

Analysts are anticipating that the growth in capacity of corporates to undertake M&A transactions is based largely on the paring down of debt over the past few years. 

Asia Pacific corporations (excluding Japan) exceed the other regions at 19 percent growth in capacity to invest, followed closely by Africa and the Middle East at 18 percent.

“Singapore companies have maintained healthy balance sheets and have the capability to finance M&A activity to boost market share and keep up with competition in the increasingly consolidated marketplace,” Ong added.