Asia signals prospect of investment

ONE MORE THING:WHEN IT COMES to foreign direct investment, our focus is often westwards towards the United States, which has proved a fertile hunting ground for a variety of reasons.

However, a recent survey of 800 global business leaders about the euro zone crisis by advisory group FTI Consulting suggests we should be paying more attention to Asia.

The poll found that 45 per cent of Asian investors plan to make strategic acquisitions in Europe on the basis that there are good discounts to be had on performing assets right now. Just 7 per cent in north America have similar plans.

On the downside, the survey showed that just 45 per cent of business leaders were optimistic that there would be any economic growth in the EU in the next 12 months, which does not bode well for our buoyant export sector.

Fifty-nine per cent expect growth in northern Europe, while only 39 per cent expect any improvement in southern EU countries.

In relation to the euro, 69 per cent of foreign business leaders believe it will have fewer members in the future. Not surprisingly, Greece is the favourite to leave (or be thrown out) followed by Spain at 14 per cent and Italy at 12 per cent.

Just 9 per cent expect Ireland to leave the euro, which might reflect our “best in class” status among the bailout countries.

Two-thirds said they would rather do business in countries unlikely to quit the euro zone. “To protect their interests, a similar number [63 per cent] already have or would request that contracts take account of this possible scenario,” the authors of the report state.

Sound familiar? It should, as Singapore-based STT sought to insert such a clause into its investment proposal for Eircom recently.

The authors also had an interesting take on CRH’s recent decision to switch its primary listing from Dublin to London.

“The greater liquidity of the London market may have played a role in the company’s decision, but the British pound’s independence from the euro could also have added to the appeal of a London listing.”