Last week, global intelligence consultancy S-RM launched its 2023 Asia Investment Survey which looks at attitudes to international investment in the APAC region.
A new survey by global intelligence consultancy S-RM found that 84 per cent of UK firms plan to increase their investment in the APAC region over the next five years.
The UK figure was broadly in line with figures for other markets, with 89 per cent of global respondents agreeing that the amount their company invests in APAC will increase as a percentage of their total global investment, including a quarter who expect it to increase a lot.
This is in line with a series of articles written by this news service showing that firms are increasingly optimistic about investment opportunities in the region. See here.
S-RM’s report also looked at the impact of Covid-19 on investor
attitudes. Fifty-one per cent of UK firms surveyed said that APAC
is more important now to their company’s overall global
investment or expansion strategy than before the pandemic. This
is slightly below the figures for the US (60 per cent), and
German or French (57 per cent) firms surveyed.
When asked about where in the APAC region this investment would be focused over the next five years, over a quarter of global businesses polled listed Southeast Asia – including Vietnam, Malaysia, Singapore, Philippines and Indonesia. This was largely due to these countries’ domestic policies of introducing incentives or subsidies in a sector of interest – the reason selected by 45 per cent of respondents.
But for UK firms in particular, South Asia – including India, Pakistan and Bangladesh – was the most important investment region identified, with more than a third of UK businesses choosing to invest or expand into these markets in the future. This region has seen high levels of investment in recent years, and 42 per cent of UK leaders surveyed point to multinationals and other investors increasing their market presence as being the primary driver behind their own investments in the region.
For those UK firms looking further east for investment opportunities, the survey shows that China and Hong Kong were top targets due to evidence of strong local economic growth.
Nevertheless, the report highlights some concerns about investing in the APAC region. Seventy-eight per cent of global investors polled say that ageing demographics would put off investors in some sectors in APAC, while 72 per cent say that corporate governance standards could be a barrier to investment.
Martin Devenish MBE, board director and head of corporate intelligence at S-RM said: “Despite the clear disruption facing businesses in the UK and around the world, it seems that the overall attitude towards investment in the APAC region remains incredibly positive.”
“A majority of businesses in every market polled identified the region as a major growth area, defying worries about the long-term impact of Covid and rising geopolitical tensions,” he added.
“While businesses continue to grapple with these major macro-risk considerations, investment in APAC countries looks set to remain an increasingly important part of their future planning. For now, though, there is no clear consensus on one specific destination for that investment and business leaders seem to have split their interest relatively evenly across the major regions. The next few years could be a crucial time for UK, US, and European organisations as they decide where to place their bets,” he continued.
Kath Lau, associate director at S-RM, added: “While the overall sentiment of the business leaders we polled is extremely positive about APAC investment, some organisations clearly do have concerns about specific markets, particularly around governance requirements.”
For the Asia Investment Survey 2023, S-RM worked with Opinium to poll business decision makers around the globe to gauge investor attitudes. To create the findings S-RM polled over 400 individuals, in both large corporates and private investment firms which have responsibility for making investment decisions about the APAC region. The polling was carried out in March 2023.