Bystander’s View on Japan #12, August 20th 2012

TOPICS OF THE WEEK: SE Asian Players: No More Junior Varsity                   On August 14’s issue of Wall Street Journal, there was a big article on SE Asian companies’ activities on international M&A. The report mentions and listed the top 10 cross-border M&A acquisition by SE Asian companies in 2011 and 2012. 

DBS’s (Singapore) acquisition of PT Bank Danamon Indonesia for $7,340 million was ranked first.   Petronas’s (Malaysia) acquisition of Progress Energy Resourcing (Canada) for $5,714 million was ranked secondThere is a large picture of Battersea Power Station, which was used by Pink Floyd album cover, stating that SP Setia and Sime Darby bought the land for $620 million for a real estate development. 

                  Increased cash generated by higher growth in the home countries, it is natural for SE Asian giants to expand outside the region through M&A. It is, however,  relatively easy to buy a company and/or assets. The real task is to integrate and value add after the merger/purchase. The management capability will be the essence of success, and we have to watch the outcomes of those acquisition carefully. MARKETS

                     August 17    %Change

    NIKKEI     9162.50   +3.04

    TOPIX       765.81      +2.54 

TSE has been increased because of overseas-investors’ money inflow. The market is supported by the sentiment, not by the improved corporate performance. ECONOMY

Generally speaking, sentiment is better on Japanese economy. Thanks to hot weather, summer sale has been good. People may spend more during summer holidays. 


The laws to increase the sales tax passed parliament two weeks ago. Last week was a off-week for political battle. But the end of summer will likely to be the end of Noda administartion. Noda is reported to give  promise to Tanigaki, the opposition party leader, to dissolve the diet and have the general election.

Many political analysts are saying the general election is inevitable in September 2012.