Corporate Asia: A capital paradox

1. Asia was the destination for $1 of every $2 in new investment in the past decade; 43 percent of the world’s top 5,000 firms by revenue‧‧‧

1. Asia was the destination for $1 of every $2 in new investment in the past decade; 43 percent of the world’s top 5,000 firms by revenue are now headquartered in the region.

2. This capital influx has not resulted in higher economic profit; Asia accounts for half of the deterioration in global economic profits from $726 billion to an economic loss of $34 billion.

3. Capital intensification of the world accounts for 90 percent of the global fall in return on capital that is driving down economic profit, particularly in Asia.

4. The decline in global economic profitability largely reflects the cyclical energy and materials sectors, European finance, and Chinese capital allocation to value-destroying sectors.

5. However, pockets of economic-profit-generating excellence can be found in several sectors across Asia.

6. The opportunity—Asia could unlock $440 billion of incremental economic profit from two major levers: turning around troubled companies and capturing companies’ latent potential to create more profit champions. #investmentmanagement #venturecapital #finance #economics


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