Buyers can cherry-pick attractively valued assets

dubai - Companies in distress are selling their healthcare or F&B assets

The time is conducive to buy good assets because valuations are attractive and a lot more assets are up for sale, according to an industry executive.

Kanhaiya Rathi, CEO and managing director, Aspire Cap, said these "good assets are in the market because of liquidity issues. There were many companies that got into distress because the construction and real estate business slowed down, so they are selling their healthcare or F&B assets."

He said this is the best time for buyers to acquire good assets at the right valuations because of the weak market and lowered expectations of valuations from the seller.

Rathi sees see more outbound M&As (mergers and acquisitions) taking place in the GCC.

"We see a lot of companies looking to invest in Saudi Arabia and India. There is a lot of optimism about the Saudi economy following the government's decision to allow investors to come into the country and invest. A lot of funds and companies are moving to Saudi Arabia, with the economy opening up. I see a lot of activity there in healthcare, F&B, education, technology and startups."

In India, there is a lot of investment happening in the infrastructure, defence and FMCG sectors from the GCC, he said during an interview on the sidelines of a conference hosted by the Institute of Chartered Accountants of India (ICAI) - Dubai chapter.

"GCC investors are more investing more in the East than West because of better growth prospects. India, for instance, is the fastest-growing economy in the world. With reforms, people are expecting Saudi to do better than it has done in the past."

Rathi sees more deals happening in the second half of 2018 because more liquidity is expected to come to the market. "Liquidity is one of the major challenges for M&As now because it is not easily available. Plus, corporate governance is the biggest challenge for smaller firms because there is no proper board, segregation of duties or proper management teams in place. Smaller firms have to beef up their corporate governance structure and management capabilities. They also need to have the right financial advisor."

Siddhartha Bhandari, CEO, NewBridge Fintech Solutions, also addressed the ICAI members about how the world of accounting, auditing and corporate finance will look in the next five years through technology transformation and how chartered accountants (CAs) must upgrade their skills to stay relevant.

"Artificial Intelligence is already here in a lot of ways through Dubai government initiatives such as driverless cars, drones, medical technology and also in the financial sector in terms of data interpretation and big data analytics. So, it is already here but will grow in leaps and bounds in the next five years," he said, adding that AI will witness more growth in healthcare, government, consumer, transportation and logistics sectors.

Naveen Sharma, chairman, ICAI (Dubai chapter), said CAs need to upgrade their skills so they stay relevant and can make progress in their career.

- waheedabbas@khaleejtimes.com