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FDI inflows into the Asian region in 1998 were
$85 billion, compared to $96 billion in 1997.
Although down, by 11 per cent, 1997 flows remained
above the level of 1996 and well above the average
of annual flows recorded during 1991 - 1995 (UNCTAD)
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Despite
recent stagnation, Asian economies have achieved
significant economic growth over the longer term
- a trend we believe will resume. |
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Asia-Pacific
economies achieved impressive growth rates from
1980 to 1998, and powered by restructuring, economic
growth rates in most countries are anticipated
to regain momentum in 2000. |
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Causes
for the crisis can be attributed to a combinaion
of factors which include overheated expansion,
trade imbalances, excessive foreign currency borrowings,
loosely regulated financial systems and overheated
public equities markets. |
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The
crisis has promted healthy retrenchment ad restructuring
among Asian businesses, but access to needed capital
is limited. As a result, most countries
are lowering barriers to foreign investment -
especially impediments to foreign ownership of
Asian companies. |
| - |
The
crisis has prompted businesses to reevaluate their
operating models to focus on productivity and
competitiveness. Reform and restructuring have
improved profitability. |
| - |
Mergers
and acquisitions activity is increasing. |
| - |
Formerly
debt-laden companies have been forced to reduce
their borrowings to more sustainable levels. |
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The
number of deals continues to rise, even though
currency devaluations have trimmed the dollar
levels. |
| - |
The
volume of international debt and equity offerings
has plummeted. (Euroweek - Capital Data
Ltd.) |
| - |
Asian
goverments and companies are implementing reforms
designed to attract foreign capital. For
example, in Thailand:
i)
|
Foreign ownership
restrictions eased to allow above 49% in
certain industries. |
| ii) |
Bankruptcy
laws in process of enactment. |
| iii) |
Major
restructuring of conglomerates, spinning-off
non-core businesses. |
| iv) |
Increase
in privatization activities. |
|
| - |
Private
placement of equity has emerged as an alternative
source of financing to bank credit, public offerings
and IPO's. |
| - |
The
demand for private equity in Asia is expected
to increase for the next two to three years. |
| - |
There
is a desire to strengthen the Asia-Pacific economies
by improving infrastrusture and research and development. |
| - |
The
Asia-Pacific region represents a significant level
of economic activity and a large population base.
Our Directors believe that the region will
continue to experience its long term trend of
improvemnt in living standards and that the necessary
conditions for the continuation of high growth
rates in many of these economies exist in the
medium to long term. |
| - |
Movement
away from a "relationship-based" way
of doing business and creating wealth to one that
is more "rules-based" and market-driven. |
