In 2014, the Asia-Pacific Foreign Direct Investment inflows accounted for one-third of global FDI inflows, making the region a hotspot for cross-border investments.
According to recent Frost & Sullivan findings, the positive investor sentiments in Asia-Pacific were reflected in the global deals wherein the region contributed around 20 to 25 per cent of the overall deal volumes every year between 2010 and 2015.
Investments in ICT (information and communication technologies), energy and healthcare sectors by venture capital, private equity as well as strategic investors (through M&A) outperformed the others during this period globally.
Herein, ICT was the leader with in terms of deals volumes and value driven by investments in areas such as social media, big data, mobile applications and cloud computing, among others.
”With the increasing availability of market capital and investor opportunities across different sectors, it is likely that Asia Pacific will remain highly relevant for the global investor community,” notes Sanjay Singh, Vice-President, Business & Financial Services, Frost & Sullivan Asia Pacific.
“Key sectors for growth include the Internet-linked businesses, media, semi-conductors, Telecom, Media and Technologies (TMT), healthcare, restaurants, FMCG and real estate especially in the distressed asset spaces.”
In 2014, there was a proliferation of investments in e-commerce, digital media and alternative payment solutions start-ups in technology space within APAC.
From an investor perspective, Asia-based start-ups received a boost, with more than $US10 billion invested in Asian start-ups over the last 5 years with two Asia-based start-ups (Flipkart and Xiaomi) raising more than US$1 billion in funding.
Going forward, e-commerce, digital advertising and cloud based start-ups are expected to be the focus sectors for APAC investors.
“We also expect the upcoming formation of ASEAN Economic Community to usher in more FDIs especially in infrastructure-related sector creating opportunities for regional start-ups,” adds Ajay Sunder, Vice-President, ICT, Frost & Sullivan Asia Pacific.
“The outlook for Indonesia is especially exciting for us, as a high growth investment landscape, with of course China being the leader in deal activity for the region,” Sunder adds.
“Globally, China was the most active region accounting for 32% of total deals in APAC. Around 95% of these deals were from domestic acquirers indicating a trend of industry consolidation within China.”