India and Japan are two bright spots in Asia’s “extremely interesting” markets, JPMorgan’s Filippo Gori said Thursday at the bank’s Global China Summit, referring to stocks in the region as well as transaction landscape.
“There’s Japan, which is on fire. India, which is in high demand,” Gori, co-head of global banking at JPMorgan, told CNBC.
from Japan Nikkei 225 stock market index as well as that of India Clever 50 have climbed nearly 26% over the past year, according to LSEG data.
As merger and acquisition activity declined globally in 2023, the value of deals in Japan increased 23% from last year to around $123 billion, Bain & Company in its report on mergers and acquisitions in Japan. “The Japanese economy is particularly well positioned for growth in mergers and acquisitions,” the report said.
Sentiment in the Indian market was bullish, with most traders expecting improvement in 2024, Bain & Company analysts said.
Last year, the value of M&A deals in India stood at $136 billion, a 27% decline from the previous year, consistent with the global decline in M&A activity. acquisitions, according to Deloitte’s report on M&A trends in India. “Continued business and investor confidence in India could pave the way for a recovery in deal value in the country,” the report said.
Countries like India and Japan have also benefited from the “China plus one” strategy, as investors look to other countries in the region to park their money amid escalating tensions between states -United States and China.
Companies looking to expand their manufacturing footprint in India will drive M&A activity in the country: “This can be attributed to the China Plus One reconfiguration of global supply chains and supportive government policies, such as the China Plus One program of production-related incentives that favor manufacturing in India. “, said Deloitte.
US tech giant Apple has shifted some of its production to India after strict Covid controls in China disrupted its operations there, with around 14% of its iPhones now reportedly made in India.
Trading activity could focus on AI sector: Gori said artificial intelligence has the potential to add trillions of dollars to the global economy by 2030. PwC said AI could contribute up to $15.7 trillion to the global economy in 2030.
“So there’s a lot of interest. As to whether this will spur a lot of negotiating activity in this part of the world, I think we need to see some dynamics. Geopolitics could play a role in that, so I think that “It’s a little too early to tell,” Gori said.
“Health care and renewable energy will definitely generate a lot of activity,” he added.
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