Foreign firms speeding up growth plans in Singapore and Asean: HSBC survey

  • International companies are more optimistic about their prospects in South-east Asia and are looking to scale up through mergers and acquisitions (M&A), a survey commissioned by HSBC Commercial Banking showed.
  • Foreign businesses expect sales in the region to grow by 23.2 percent over the next 12 months, compared with 20.1 per cent in last year’s survey.
  • Nearly a quarter of foreign businesses said they were planning to significantly increase growth from M&A in 2023, with three in 10 expecting to do so in 2024.
  • About 65 per cent of respondents from China were more likely to significantly increase their regional growth through M&A by 2024, compared with less than 50 per cent from the United Kingdom, France and Germany.
  • Those that were already present in the region planned to focus on growing in the markets they were familiar with, namely Singapore, Malaysia and Thailand.
  • The top five reasons cited on why Singapore was attractive for business expansion were its skilled workforce, growing digital economy, developed infrastructure, supportive government and regulatory environment, and supply-chain connectivity. The survey said that Singapore’s advanced communications infrastructure also provides a strong foundation for further growth into the region.
  • Nearly half of all respondents believed technology would sharply increase economic growth in Singapore over the next 10 years, significantly more than any other market.
  • On sustainability, one in four respondents said Singapore’s environmental, social and governance, sustainability and net-zero ambitions made it attractive for business expansion. Investment in sustainability initiatives was also strong. Almost 80 per cent of companies with a presence in Singapore will spend at least 5 per cent of their operating profit on becoming more sustainable over the next 12 months.
  • For Chinese firms, Singapore’s stable operating environment was cited as a major pull factor to expand here. For Indian firms, the city state’s business-friendly regulatory environment was a key draw.
  • Singapore’s open trade links are also an attraction. About 70 percent of the respondents planned to leverage the European Union-Singapore Free Trade Agreement, which was introduced in 2019 to simplify tariff-free trade between Singapore and the EU.
  • When it comes to fresh opportunities, Indonesia and Malaysia were popular choices for companies aiming to expand into a new Asean market over the next two years.

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