Musical chairs

- "The M&A theme is back. When we wrote Musical chairs in November 2006, we felt that the corporate world was ready for a round of consolidation. This played out during the 2007 frenzy brought on by the rapid rise of the emerging-market economies. The world has changed much since then, but we believe conditions are ripe for another wave of M&A in Asia Pacific ex-Japan."
- "Despite widespread concerns over a 'balance sheet recession' in the US, the corporate sector is behaving very differently from households. Companies are re-leveraging given the ability to fund themselves at close to historically low rates."
- "When new order flows slow down, acquiring competitors to increase market share becomes more attractive than capex, given the still real risk of initiating new investment only to find that the demand has evaporated by the time a plant opens one or two years hence."
- "In this report, we highlight five stocks that we think are likely to be under scrutiny as potential acquisition targets: MobileOne (BUY), Biosensors (BUY), Korea Exchange Bank (BUY), Primary Health Care (BUY) and Wing Hang Bank (Rating suspended). We include fresh updates on the four rated stocks."
- "We include global data on M&A and corporate fund-raising."

Nomura Asia Pacific Strategy 20100920

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