WSJ blog: M’sian consumer sector continues to attract overseas interest

KUALA LUMPUR: The Malaysian consumer sector continues to lure
overseas interest as healthy domestic demand and a string of government
initiatives support economic growth.
Brian Chia of Baker & McKenzie's member firm Wong & Partners was quoted by the Wall Street Journal (WSJ) blog as saying that food, consumer, education and manufacturing industries have attracted regional interest.
Chia
said “investors like any industry which has a consumer angle” and that
South-East Asian countries were a “best proxy” to economic growth which
could see increased interest from general private equity partners
moving forward.
Some private equity players may find deals in
Indonesia and Malaysia a worthwhile bet when seeking out investments in
Asia on the backdrop of the possibility of slowing growth in China,
Cheung wrote in the blogposting.
Malaysia is not the only place in South-East Asia where private equity players may find deals.
According
to the blog posting, the consumer sector including food and beverage,
supply chain and health care is also proving to be a sweet spot for
investors in Indonesia on the back of a growing middle class and higher
disposable incomes.
Jon Worsfold of Baker & McKenzie.Wong
& Leow said the consumer sector including food and beverage, supply
chain and health care is also proving to be a sweet spot for investors
in Indonesia due to the above stated reasons.
However, Worsfold
also noted that investing in Indonesian deals were still fraught with
challenges with the lack of decent assets for buyouts or for a
controlling stake because high premiums were usually paid for taking a
controlling stake in a portfolio company.
He also said private
equity players in Indonesia were finding themselves squeezed out by
trade buyers on the pricing of deals adding that “PE funds can't pay
prices that Japanese trade buyers can.”
Meanwhile, economists in
recent weeks have pointed out that the slowing pace of growth in China
would benefit Asean economies, especially as China restructures its
economy.
They said Chinese companies facing rising costs may
move to lower-cost countries in Asean, which enjoys close trade links
with its neighbour to the north.