Jakarta. Merger and acquisition activities in Indonesia doubled in the first semester, compared with the corresponding period last year, along with global interest in the country's technology sector, according to a report by corporate finance adviser Duff & Phelps.
The report, titled "Transaction Trail," released by Duff & Phelps on Monday (17/07) provides an insight into the transaction and capital market activities — M&A, private equity, venture capital and initial public offerings — in Singapore, Malaysia and Indonesia.
"Singapore has contributed to a significant part of the deal values, driven by outbound transactions, while Malaysia and Indonesia have contributed to the growth in deal making, driven by inbound investments," Duff & Phelps Singapore managing director Srividya C. Gopalakrishnan said in a statement.
According to the report, Indonesia recorded 81 M&A deals in the January-June period, with a total value of approximately $4 billion — that compared to 71 M&A deals worth $1.9 billion in the first half of 2016.
This year's report says technology "was the largest sector in value term," followed by the agriculture sector.
Notable M&A deals include the Chinese internet giant Tencent Holdings' $1.2 billion worth deal with ride-hailing service Go-Jek Indonesia. It was followed by Malaysian Felda Investment Corporation's acquiring 37 percent stake, worth $505 million, of palm oil plantation firm Eagle High Plantations.
The M&A deals in Indonesia are part of the 118 M&A, PE, VC and IPO deals sealed during the first half of 2017, worth $4.7 billion combined. For comparison, the first semester of 2016 saw 90 deals worth $2.6 billion.
Singapore, Malaysia and Indonesia recorded 818 deals, totaling $63.3 billion, in the first half of 2017. In the corresponding period last year, 655 M&A, PE, VC, IPO deals worth $54.2 billion were recorded.
"When we look at the outlook for the second half of the year ... market sentiments are negative, which is leading to uncertainty in deal making," Gopalakrishnan said.
Gopalakrishnan attributed the uncertainty to a slower pickup in oil prices, a "steady stream of bad news" coming from the shipping and marine sectors, as well as changes in global regulations.
She said, however, that improving infrastructure in developing countries and significant development in the tech startup ecosystem in Southeast Asia can contribute to create a positive trend.