From Delhi to Tokyo, firms across Asia are scrambling to assess the impact of Britain quitting the European Union, with some saying fresh investments in the UK are off the table for now and their future in the country uncertain. As Japanese and South Korean corporate giants assessed the fallout of the vote and Indian firms with British interests watched their shares tumble on the Bombay Stock Exchange, analysts were bleak about Asian investment in the UK.
Asian investors with regional headquarters in Britain - until today's referendum result a gateway to investment in the EU - have "a choice to stay or to go now", said Martin Schulz, Senior Research Fellow at the Fujitsu Research Institute. "Companies have to really rethink what to do, probably freezing their investment plans for quite a while," he said. "I think companies will not just rethink their investments in the UK. They will have to rethink their overall investment plans for the EU market." Schulz added that Brexit's impact would mostly affect Japanese investors.
"It was very regrettable," Sadayuki Sakakibara, chairman of Keidanren, Japan's biggest business lobby, said of the result. "We are concerned that the results impact (firm's) business activities and future plans in various ways." Japan's direct investment in Britain has topped 10 trillion yen ($98 billion) and more than 1,000 Japanese companies do business in the country, hiring 140,000 local people.
Kosei Shindo, chairman of the Japan Iron and Steel Federation, also voiced "extreme regret" over the results, saying: "We are very much concerned about a negative impact on not only Britain and the EU but the global economy." Japanese companies operating in Britain such as Toyota, Nissan and Hitachi declined to comment or said they needed more time to assess the impact. "We will take our time to carefully assess the implications for our business as these become clearer," said Toshiaki Higashihara, president of Hitachi, which has interests in a new train plant and local electricity firm operating a nuclear power plant in Britain.
Toyota, which has two plants with 3,400 employees in the country, said: "We will closely monitor and analyse the impact on our business operations in the UK, and how we can maintain competitiveness and secure sustainable growth" in the UK auto industry. In South Korea, Samsung Electronics, whose European headquarters are in the UK, said it was too early to comment, while Korea National Oil Corp (KNOC), one of the largest South Korean investors in Britain, said it was prepared for "all possible scenarios."
But "most surveys had indicated that UK would remain in the EU so the result caught us a little off guard," said a KNOC spokesman, who declined to be identified. In India, firms with investments in Britain saw their shares tumble on the Bombay Stock Exchange Friday following the Brexit vote. Stocks in India's largest carmaker Tata Motors, which owns luxury British unit Jaguar Land Rover, plummeted nearly 12 percent, the auto manufacturer's biggest slump in seven years, according to Bloomberg News.
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