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10 Apr 2013
Forex Flash: Japanese M&A activity subdued in Q1 - Nomura
FXstreet.com (Barcelona) - Senior Nomura strategist Kengo Nishiyama notes that Japanese M&A activity was subdued in Q1 and he is expecting a pickup in activity as growth in corporate earnings becomes clear.
He begins by commenting that his calculations based on Bloomberg data put the value of Japanese corporate M&A deals over Q1 at ¥1,866bn, down 33.8% y-y. The value of domestic M&A (Japanese companies buying Japanese companies), outbound M&A (Japanese companies buying overseas companies), and inbound M&A (overseas companies buying Japanese companies) all declined y-y. He sees that with the number of deals also falling, by 13.2% y-y to 590, M&A activity as a whole was subdued.
With Q1 a time of great change in the Japanese corporate environment as the new Japanese administration took up the reins, he thinks some companies took a wait-and see stance and held off engaging in M&A and other major corporate action. Looking ahead, he thinks that the shift toward a weaker yen could have an impact particularly on outbound deals. However, M&A remains an important means of boosting corporate value, and he continues to expect M&A activity to pick up as improvement in corporate earnings becomes clear against a backdrop of stock market recovery and abundant cash and deposits generally held by Japanese companies.
He begins by commenting that his calculations based on Bloomberg data put the value of Japanese corporate M&A deals over Q1 at ¥1,866bn, down 33.8% y-y. The value of domestic M&A (Japanese companies buying Japanese companies), outbound M&A (Japanese companies buying overseas companies), and inbound M&A (overseas companies buying Japanese companies) all declined y-y. He sees that with the number of deals also falling, by 13.2% y-y to 590, M&A activity as a whole was subdued.
With Q1 a time of great change in the Japanese corporate environment as the new Japanese administration took up the reins, he thinks some companies took a wait-and see stance and held off engaging in M&A and other major corporate action. Looking ahead, he thinks that the shift toward a weaker yen could have an impact particularly on outbound deals. However, M&A remains an important means of boosting corporate value, and he continues to expect M&A activity to pick up as improvement in corporate earnings becomes clear against a backdrop of stock market recovery and abundant cash and deposits generally held by Japanese companies.