Who is Investing in Asia Today?

energyRussia used to be one of the big Asia FDI’s.  Over the last few years or so however, this has been changing. Various factors have contributed to the depletion of Russian finances entering into Asia.  One recent reason given was put forward by Kyrgyzstan President Almazbek Atambayev who at the end of last year pulled out of a Russian-Asian deal to construct two major hydropower facilities.  He explained as follows: “In the current situation, when the economy of Russia is not on the rise, let’s just say, and the trend for oil prices is only going downward, we see that these agreements… well, for objective reasons they cannot be fulfilled by the Russian side.”

This is not the only deal cancellation that has taken place in recent times.  It seems that there have been many disruptions to investments caused by Western sanctions against Russia.  One example was when work was suspended on the Caspian Sea’s Tsentralnoye offshore field since some of the technology needed for drilling was banned from sale to Russian companies.  One reason given was articulated by CEO of LUKoil, Vagit Alekperov who explained: “We cannot get the drilling equipment because it belongs to non-Russian companies. To build another drill rig just for one well would be illogical, so we and Gazprom have taken a pause, and we will wait until either other rigs free up, or sanctions are lifted.”

And then there was the highly publicized Russian withdrawal from Turkmenistan’s energy market in Central Asia. The highest-profile Russian retreat from Central Asia’s energy market is in Turkmenistan; that, in comparison to the celebrations marking the 2007 historic agreement between the two regions of the pipeline built that linked the two.

But it’s not all bleak for Asia.  In a more recent article in The Telegraph, it was explained how lucrative making an investment in Asian income funds can be for investors.  It comes with little risk and lots of growth opportunities.  As Jupiter’s Asian Income Fund Manager Jason Pidcock says: “They [these funds] offer diversity of income source and currency exposure and will aim to capture an exciting growth story in the medium to long term.”

And that’s before we even look at the technological investment opportunities Asia has to offer.  This can be seen via the $38million Tech in Asia Fund, which seeks to “serve the tech and startup ecosystem in Asia,” which it has been doing by “uncovering promising startups, reporting about news in the tech scene, and connecting people at our events.”

Yes, there have been some FDI withdrawal in Asia, but one only needs to look at McDonalds to see that Asia is still a powerhouse.  While there are currently over 2,800 McDonalds’ spanning China, South Korea and Hong Kong, that is just the start as the restaurant chain announced an additional 1,500 new eateries to make their presence in the region over the next five years.  Why?  CEO and President of McDonald’s, Steve Easterbrook said it was because: “Asia represents a significant area of opportunity for McDonald’s to blend our global quality standards with local insights and expertise from partners who share our vision and values.”

 

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