Cautious Singapore firms singled out for waning M&A appetite

Local companies are bucking the buoyant ASEAN trend.

Singapore-based companies are less keen on jumping into mergers and acquisitions over the next year, with deal appetite dampened by recent stock market volatility and escalating economic tensions.

The latest KPMG Global M&A Predictor showed that of the five ASEAN nations analysed, only Singapore registered an expected two percent fall in appetite over the next year

Indonesia and Thailand is expecting a growth in appetite by 16% and 17%, respectively, while the forward P/E ratios for Malaysia and the Philippines are expected to increase by 6% and 10%, respectively.

Despite the dampened appetite, Singapore performed well above the global average in terms of capacity to transact. Singapore’s capacity to fund deals is expected to grow by 22% over the next year.

The other ASEAN nations are also expected to have more capacity over the next year.

“Despite the recent volatility in stock markets and tensions in the global economy, Singapore remains an attractive platform for foreign investors looking to expand into Southeast Asia. We expect deal activity to pick up when volatility eases,” said Benjamin Ong, Head of Mergers & Acquisitions at KPMG in Singapore.