China tripped up another foreign investor, taxing Vodafone’s offshore sale of its Jiangsu assets in China with the new 2009 circular, Circular 698.
India is also hoping to add CFC regulations, taxing passive international income of those considered domestic in India for tax purposes while prosecuting Vodafone. M&A dealmaking also remains stunted in India with the spaghetti M&A code built for family houses with low threshold for control and foreign investors additionally having to gain FIPB approval. A local version of IFRS may also not be accepted as smoothly as earlier policy measures like local Basel Risk Capital implementations or the new tax code.
In the mean time, UK continues to lose local corporations like HSBC to international domicile because of the same tax dispensations.
Chinese banks continued the huge fund raising effort ICBC $6.6bn, BoC $8.9 bn and Ag Bank $23bn. Brazilian and Latam banks have also been able to sshore up capital with state owned Banco Braziliero raising $7bn to get in line with the New Bovespa market listing norms.
China however is leading the way in closing the doors on easy growth for Foreign investors leaving markets with a bad feeling. Among others, locals China Pay and China Post monopolise Visa and Fedex strangleholds with over $2.83 trillion in payments equalling rest of the world’s Volumes and Chinese auto makers ready to step outside with the borrowed know how from GM, Audi and even Ford.
In the rest of the world, South Africa poses significant challenges from regulation, while Airtel has been able to commit $500mn across Congo, Nigeria($600mn over 3 years) and two other African nations after buying Zain’s African assets.
Asia Pacific M&A, excluding Japan, rose 78 percent last quarter, according to Thomson Reuters, with emerging market acquisitions now one-third of total deal volume.
While the largest transactions still mainly originate in the United States and Europe, a slew of recent deals have come from places like China, the Middle East, and Southeast Asia.
Asia’s M&A activity received a boost on Monday with a quartet of Australian deals totalling more than $4 billion and including buyers from Thailand, Singapore, China and Korea.
Also, PE activity has shone the world over, grossing a cool $70 billion, from $35 b last year. quotes are from the increasingly trustworthy Reuters reports. Even Bloomberg Business Week is a notch up now, folks at nytimes, ft, wsj and even us having lighter workloads!
Bankers say that while a return to the mega-deals of 2006/07 is still some time away, there is now a steady flow of transactions, with private equity activity picking up in the second quarter.
As of June 22, private equity-backed mergers and acquisitions in the second quarter were up 125 percent from a year earlier to $40 billion, and were up by a third from the first quarter, Thomson Reuters data showed. For the year, such deal totaled $70 billion, more than double a year earlier.