JakartaPost-Jan 31, 2023
Investment banks are projecting a flurry of merger and acquisition (M&A) activity in Indonesia this year – some driven by sustainable growth prospects, others by distress. The global firms expect Indonesia’s economic growth to outmatch that of developed economies this year due to the latter’s risk of slowdown or even recession as a consequence of their entanglement in the war between Russia and Ukraine. This geopolitical shift has made Southeast Asia’s largest economy a lighthouse for global investors seeking solid returns on their portfolios. “I think Indonesia will continue to see stronger M&A activity over the next few years,” Bank of America (BofA) Southeast Asia investment banking head Antonio Puno told The Jakarta Post on Monday. The lender expects huge dynamics in the fast-growing sector of digital infrastructure in Indonesia and neighboring countries amid rising demand for cloud computing and onshore digital storage. Although several massive transactions on towers and data centers have been conducted in the country, appetite reportedly remains among the bank’s clients for firms that have regular cash flow or are working on achieving that. Mobility infrastructure for transportation and logistics would also see heightened M&A activity, the banker forecasts, as per-capita GDP growth created more disposable income. “Consumer-driven businesses, where you can target significant growth, but also profitable growth, I think those are interesting for a lot of our clients,” Puno said on Monday. Although the mining sector and its supporting industries were the conventional industries targeted for M&A, investors now had more interest in nickel and electric vehicles (EV) components as part of the green transitions, he said. The huge number of inquiries for these downstream industries was based on “funding across the board,” meaning the availability of funds from the various capital markets, as investors vied for nickel resources and EV supply chains in Southeast Asia. Read more at: https://www.thejakartapost.com/paper/2023/01/31/banks-eye-ma-deals-in-postcrisis-indonesia.html.
