, Singapore

Are high costs in Singapore driving investors away?

Survey indicates Singapore has lost some momentum as investment destination in Asia-Pacific.

According to the Ernst & Young’s bi-annual SEA issue of the Global Capital Confidence Barometer, SEA companies that are looking to pursue M&A activities, a majority of them (61%) are driven by the need to access new markets. Driven by the continued growth and economic prospects of the region, 79% of SEA respondents indicate that their top investment destination is Asia-Pacific.

Meanwhile the region continues to remain as most preferred by global respondents. Particularly, Southeast Asia, including Indonesia, Malaysia, Vietnam, Singapore, Philippines and Thailand, is attractive to corporates and accounts for six out of the top 10 most attractive countries in Asia-Pacific.

“As companies seek growth and access into new markets, perceptions and market experiences are important. There is consistent view that Asia-Pacific is a clear choice for expansion and growth, and Indonesia has risen to be one of the top five investment destinations globally. Singapore and Vietnam, however, have lost some momentum and for very different reasons. In Singapore, while the business-friendly fundamentals remain strong, the relative high cost is a drawback. In Vietnam, market volatility is dampening investor sentiments,” said Harsha Basnayake, Transaction Advisory Services Leader for Singapore and Southeast Asia at Ernst & Young.

The survey conducted in February and March 2012 involved more than 1,500 senior executives in 57 countries around the world, of which 118 were from Singapore, Malaysia, and Indonesia.

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