- Domestics M&A set to grow again this year after a significant drop in 2016, and bounce back strongly in 2018
- IPO activity to return to 2014 levels this year, and grow substantially in 2018
- Still a cloud of uncertainty over investment environment globally
- However, uptick in transactions also predicted globally in 2018 as clarity returns
After a very challenging 2016, the outlook for Malaysian M&A and IPO transactions is predicted to pick up in 2017, and bounce back significantly in 2018, according to the second edition of the Global Transactions Forecast, issued by Wong & Partners, a member firm of Baker & McKenzie International.
The research, covering 37 of the world's largest economies and conducted in conjunction with Oxford Economics, predicts the value of IPO activity in Malaysia is to ultimately rise to US$2.79 billion by 2019, easing thereafter. Domestic and inbound M&A activity are also forecast for upticks, supported by Malaysia's strong predicted GDP growth, reaching a value of US$19.8 billion in 2019.
Commenting on the research, Brian Chia, Head of Corporate, Commercial and Securities, Wong & Partners, said:
In the case of Malaysia, while the findings of this edition of the Global Transaction Forecast appear to quite optimistic, there are a few key factors that should provide comfort for those Malaysian corporates looking for better news after a difficult year. Economic growth is still forecast to average 4.2% between now and 2020, while the openness and ease of doing business of our economy will continue to help drive new opportunities for growth and deals.
Malaysia in part mirrors global trends. After a year of global political uncertainty, the research predicts an increase in global transactional activity over the next four years, based on a gradual pickup in global economic growth in the years ahead, with global GDP rising to 2.6% in 2017, and 2.8% in 2018.
As threats to the stability of the global economy ease, and dealmakers regain confidence in the market, their apprehension should turn into appetite.
As Paul Rawlinson, Baker McKenzie's Global Chair explains,
We are clearly still in volatile times but deal-making is there to be done. Strong corporate balance sheets, cheap finance and moderate growth across markets and key sectors all point to an improving M&A run-rate later in 2017, after a cautious first quarter, and a significant uptick in 2018. The caveat is we need a benign Trump on trade and a soft-ish Brexit. Will we get that? Let's see.