Japan on record spending spree in ASEAN

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mt-fuji-viewChina’s slowing economy and a lackluster home market have encouraged Japan to embark on a record-breaking spree in ASEAN, scooping up a staggering $8.2 billion in assets so far in 2013, according to Dealogic. The last time mergers and acquisitions (M&A) came close to this figure was seven years ago, while 2012 registered a miniscule $614 million of investments into the region.

This past week’s visits by Japan Prime Minister Shinzo Abe to the Philippines, Malaysia and Singapore reinforces the shift towards Southeast Asia, underscoring the region as a priority in Japan’s developmental course.

A supportive precursor to his three-day tour, buoyant Japanese insurers and banks have been unleashing a torrent of cash into ASEAN, namely in the rapidly developing financial sector.

Most recently, Meiji Yasuda Life Insurance bought a 15 per cent stake in Thailand’s Thai Life Insurance for $750 million. The deal closely follows that of another hot purchase, when Dai-ichi Life Insurance announced its acquisition of a 40 per cent stake in Indonesia’s Panin Life for $335 million.

However, the majority of this year’s generous flow of funds came when earlier this month Japan’s biggest lender, Mitsubishi UFJ Financial Group, committed to buying a controlling stake of Thailand’s Bank of Ayudhya for $5.6 billion.

The past week heralded other major news. Japan’s car making giant Toyota announced intentions to open a $230 million automobile engine factory in Indonesia, which could begin operations by 2016.

China has traditionally been the mainstay of Japanese investment, but continuing feuds over disputed maritime territory and damaging boycotts in China against Japanese firms have spurred a shift southward.

Japan has also played a significant role in Myanmar, scratching off $1.8 billion in dues, while mounting a pile of investment into the establishment of the country’s financial sector, which has yet to create a bourse of its own or digitize its central bank.

Japan, however, does not own blanket coverage in ASEAN. Cambodia, Vietnam and Laos are still overwhelming influenced by Chinese investment, and Chinese projects gained the highest number of approvals in Myanmar in 2012.

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Reading Time: 2 minutes

China’s slowing economy and a lackluster home market have encouraged Japan to embark on a record-breaking spree in ASEAN, scooping up a staggering $8.2 billion in assets so far in 2013, according to Dealogic. The last time mergers and acquisitions (M&A) came close to this figure was seven years ago, while 2012 registered a miniscule $614 million of investments into the region.

Reading Time: 2 minutes

mt-fuji-viewChina’s slowing economy and a lackluster home market have encouraged Japan to embark on a record-breaking spree in ASEAN, scooping up a staggering $8.2 billion in assets so far in 2013, according to Dealogic. The last time mergers and acquisitions (M&A) came close to this figure was seven years ago, while 2012 registered a miniscule $614 million of investments into the region.

This past week’s visits by Japan Prime Minister Shinzo Abe to the Philippines, Malaysia and Singapore reinforces the shift towards Southeast Asia, underscoring the region as a priority in Japan’s developmental course.

A supportive precursor to his three-day tour, buoyant Japanese insurers and banks have been unleashing a torrent of cash into ASEAN, namely in the rapidly developing financial sector.

Most recently, Meiji Yasuda Life Insurance bought a 15 per cent stake in Thailand’s Thai Life Insurance for $750 million. The deal closely follows that of another hot purchase, when Dai-ichi Life Insurance announced its acquisition of a 40 per cent stake in Indonesia’s Panin Life for $335 million.

However, the majority of this year’s generous flow of funds came when earlier this month Japan’s biggest lender, Mitsubishi UFJ Financial Group, committed to buying a controlling stake of Thailand’s Bank of Ayudhya for $5.6 billion.

The past week heralded other major news. Japan’s car making giant Toyota announced intentions to open a $230 million automobile engine factory in Indonesia, which could begin operations by 2016.

China has traditionally been the mainstay of Japanese investment, but continuing feuds over disputed maritime territory and damaging boycotts in China against Japanese firms have spurred a shift southward.

Japan has also played a significant role in Myanmar, scratching off $1.8 billion in dues, while mounting a pile of investment into the establishment of the country’s financial sector, which has yet to create a bourse of its own or digitize its central bank.

Japan, however, does not own blanket coverage in ASEAN. Cambodia, Vietnam and Laos are still overwhelming influenced by Chinese investment, and Chinese projects gained the highest number of approvals in Myanmar in 2012.

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