Hedging strategies critical in Asia M&A
Across Asia, M&A is on the rise as cashed-up corporates and private equity firms are looking for growth and better returns. But while opportunities in the fast growing region are obvious, high volatility in foreign exchange markets and widespread uncertainty about the future course of interest rates means M&A risk, if left unhedged, can come back to bite. Wietske Blees reports
There is no denying the opportunities available to Asia's corporations. While the US and European economies have teetered on the brink of recession, the International Monetary Fund (IMF) predicts regional growth in 2010 to be around 7.9%, with gross domestic product (GDP) in China and India expected to grow by 10.5% and 9.7% respectively for the year. On balance, that has left Asian corporates in good shape, with strong balance sheets and an appetite to put their cash to good use.
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