May 29, 2015 11:05 pm JST
Singapore investors

Signs of recovery lure companies to Japan but obstacles remain

TOMOMI KIKUCHI, Nikkei staff writer

Executives from Singaporean companies attending Jetro seminar were enthusiastic about investing in Japan.

SINGAPORE -- In light of the recent signs of recovery in the Japanese economy, Singapore is keen to encourage more local companies to invest there.

     During a seminar entitled "Bountiful Japan: Where Golden Investment Opportunities Await" organized by The Japan External Trade Organization (Jetro), executives of Singaporean companies involved in the Japanese market shared their views that the country's rising stock prices, booming tourism sector and deregulation movements present good business opportunities for their peers.

     "The introduction of Abenomics triggered hope for many industries," said Chua Taik Him, deputy chief executive of International Enterprise Singapore, during his opening speech. He cited the improved financial performance of companies listed on the Tokyo Stock Exchange and the depreciation of the yen as examples of positive recent signs. He added that more Singaporean companies are looking for opportunities in the services, technology, healthcare, logistics and hospitality sectors in Japan.

     Ronald Tay, CEO of Ascott Residence Trust Management, which is part of Singaporean real estate developer CapitaLand group, echoed the positive outlook on Japan's hospitality and real estate sectors. "Japan, compared to other markets, has been our number one performing market, with double-digit growth in terms of revenue per available room," said Tay. He explained that depreciation of the yen following quantitative easing has boosted Japan's attractiveness as a tourism destination, especially with visitors from mainland China. Together with relaxed visa requirements and "Visit Japan" campaigns, "we believe there is a lot of upside potential for the hospitality market," he said.

     Other participants in the seminar expressed optimism about new industries arising from the large influx of foreign visitors that is expected during the Tokyo Olympics in 2020. Singapore-based halal food retailer My Outlets hopes to invest around $10 million to open 20 halal food shops in Tokyo within the next three years. "With the rising number of Muslim tourists in Japan, establishing a supply chain for Muslim food will be a big demand," said Ronnie Tan, managing director of My Outlets.

     Participants also called for further improvements in the business environment. "While Japan is an established economy in terms of capital income, technology advancement and consumer sophistication, it is still an emerging market for foreign direct investment," said Chua of IE Singapore. He added that the shortage of networking opportunities is one of the factors causing operational difficulties for foreign companies. Ascott Residence Trust's Tay expressed hopes that regulatory easing in the hotel sector will open up new business opportunities.

     Jetro's chairman and CEO Hiroyuki Ishige told the Nikkei Asian Review that Japan needs to make active efforts at the municipal level to attract foreign companies to invest in the country. "With the effects of Abenomics becoming increasingly visible, Japan is attracting more attention from companies in other Asian countries. We need to make good use of this opportunity and appeal to foreign companies from both local and national levels," he said. 

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