, Philippines

ASEAN most favourable for APAC foreign investment

The Philippines, Indonesia and Vietnam, particularly.

The Philippines, Indonesia and Vietnam are the markets in Asia that will be increasingly attractive for foreign investment over the coming years.

According to a research note from BMI Research, they will be supported by positive economic growth, a large infrastructure deficit, lack of public funding and an improving regulatory outlook.

Meanwhile, India remains an attractive market for international players but continues to face land reform challenges, while China, Japan and South Korea still have significant barriers to new foreign entrants.

Here's more from BMI Research:

We believe that the markets in Asia's infrastructure sector are still relatively under-penetrated by international construction players. A substantial infrastructure deficit, coupled with the limited ability of governments to fund large-scale development plans will leave much scope for investment.

While Japan, China and South Korea remain markets largely dominated by domestic firms, we highlight the Philippines, Indonesia, Vietnam and India as upcoming markets for foreign players.

Data from our Infrastructure Key Projects Database indicate that Japan, China and South Korea appear to be the least penetrated by foreign firms among markets in Asia, which we believe indicates a relatively unfavourable environment for foreign firms. Of all the companies involved (construction, financing or operations) in infrastructure projects within these countries, 70% of them are domestic.

We believe that Association of South East Asian Nations (ASEAN) countries such as Philippines, Indonesia and Vietnam are key markets that will be increasingly attractive to international players over the next two to three years.

As of 2015, these countries remain relatively underpenetrated by foreign companies (with the exception of Vietnam), and domestic firms account for approximately 60-70% of companies involved in local infrastructure projects within our Infrastructure Key Projects Database.
 

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