Opportunities for Mid-size businesses in ASEAN

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A study by Standard Chartered showed that Asean is a popular business destination for Malaysian mid-sized companies with 74% of companies surveyed doing business in Asean markets.

The study covered 300 chief executive officers and chief financial officers of companies with an annual turnover of between US$30 million and US$100 million (RM108.78 million and RM362.6 million) across four of Standard Chartered's Asian markets: China, India, Indonesia and Malaysia. Association of Southeast Asian Nations (ASEAN) – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. Together, these countries have a population of more than 625 million with an economy valued at $2.4 trillion.

With a youthful population of more than 600 million, an estimated GDP of over $2.2 trillion, strong links to its well-to-do neighbours and plans to become a single market by the end of 2015, ASEAN is brimming with opportunity for Canadians, according to a recent study. As ASEAN grows, recent research shows the region now receives more foreign direct investment (FDI) inflows than China. In 2013, Indonesia, Malaysia, the Philippines, Singapore and Thailand, known as the ASEAN-5 countries, received $128.4 billion in foreign investment, up 7% from the previous year and topping China’s FDI receipts of $117.6 billion, which declined 2.9% from 2012.⁵

ASEAN was also home to huge, market-moving IPOs in 2013, including a $2.1 billion listing for BTS Rail Mass Transit Growth Infrastructure Fund in Thailand and a $2.6 billion IPO for Mapletree Greater China Commercial Trust, Singapore’s largest-ever real estate investment trust listing.

In terms of commercial opportunities, the report titled ASEAN Commercial Opportunities Study for Canadian Business notes that global attention in recent years has tended to focus on China and India, but many see ASEAN as an alternative that offers preferential access to those markets. In its 20-year "march towards economic integration," ASEAN has signed free trade agreements with "economically significant neighbours," it notes, including China and India as well as Japan, South Korea, Australia and New Zealand. The promise of regional integration has also increased international interest in ASEAN as an investment destination.

Standard Chartered in a statement today said the study showed that 78% of Malaysian respondents were confident in their growth prospects.

"Mid-sized companies in Asia are highly confident in their ability to grow, and alongside domestic expansion are increasingly looking to international markets to build further momentum," it said.

Global head of commercial clients Andy Bainbridge said mid-sized companies were crucial engines of economic growth and job creation across Asia and increasingly active in global trade.

"This study shows that slowing growth in the region has not dented their confidence in the future.

"Far from it, these dynamic companies are looking to take on more workers and expand into new markets, growing their turnover in the next five years," he added. – Bernama, January 21, 2015.

Collectively, the ASEAN nations are America’s third-largest Asian trading partner, after China and Japan, and the largest destination of U.S. investment in Asia, according to Alex Feldman, president and CEO of the US-ASEAN Business Council. U.S. businesses have long known about the strategic and market value of Southeast Asia; as of the end of 2012, the U.S. has invested more than $190 billion cumulatively in the 10 nations of ASEAN. That’s more than U.S. companies have invested in Brazil, Russia, India and China combined, Feldman wrote in an email in August.