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Brunei scores high in M&A Attractiveness Index

Azlan Othman

Brunei Darussalam scored high in environmental, social and governance (ESG) category with 83 per cent in the 2021 edition of the M&A Attractiveness Index by Mergers and Acquisitions Research Centre (MARC) at the Bayes Business School.

The index ranks countries on their capacity to attract and sustain mergers and acquisitions activity based on six factor groups.

On finance and economy, it almost reaches a score of 50 per cent. However, the Sultanate slipped eight places down to 72nd out of 148 countries while in the Southeast Asian region, the Sultanate was at the seventh spot with an overall score of 47 per cent.

United States (US) and Singapore ranked first and second, followed by United Kingdom (UK) and Canada.

The latest annual ranking – the first to incorporate the true effects that the COVID pandemic has had on individual nations as foreign direct investment targets – compared deal activity and attractiveness to investors of 148 countries.

Compiled by Dr Naaguesh Appadu Research Fellow at Bayes, the report also provides additional analysis into the opportunities and challenges facing countries, including the clear emergence of ESG considerations from investors when completing a deal and the importance of strong national infrastructures.

The latest data includes a ranking for countries without the consideration of COVID in its methodology as well, allowing for a snapshot of how the pandemic has affected investment decisions around the world.

Key findings from the report include the UK rising six places year-on-year to 3rd globally – under the updated methodology – behind the US (first) and Singapore (second).

In doing so, the UK leapfrogs the Netherlands and Germany to become the most attractive European country for inbound and domestic investment. Fiji (up 12 places to 46th), Australia (up 10 places to 11th) and Mauritius (up 10 places to 50th) are the biggest climbers in the list, showing an emergence in Southeast Asia.

All four nations plus New Zealand (15th) also rank significantly higher than they would have done without consideration for Covid – displaying robust investor confidence in the stricter national measures adopted by each respectively.

Conversely, socio-economic factors represented the greatest market challenge to the top eight ranked countries, and 15 out of the top 20.

These factors include size and demographics of the population, death and recovery rates related to Covid-19 and unemployment levels.

Dr Appadu said, “The M&A Attractiveness Index Score examines where investment activity is most heavily focussed, and predicts regional trends.

“Since our first report in 2009, we have evolved and improved the methodology to create greater accuracy in line with changing market forces across the globe.

“This year, we have successfully managed to integrate the effects of Covid-19 into our modelling to be able to look more closely at the winners and losers of the pandemic.

“The UK continues to defy expectations post-Brexit, rising six places globally based on the most recent calculation methodology and becoming the most attractive European target for investment”.

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