Companies should be using the high dollar as an opportunity to invest in businesses offshore, says Francesco de Ferrari, a senior private banker with Credit Suisse.
"Big companies should go on a shopping spree. The entrepreneurs get it and they are already there," said the Singapore-based banker, a day after hosting a panel discussion in Sydney featuring Ariadne's Gary Weiss, fund manager Alex Waislitz and Mesoblast chief executive Silviu Itescu.
His organisation has significant private banking operations in Australia and Japan that he oversees as head of Asia-Pacific private banking, and he said the interaction between corporate moves and government decisions in Japan in recent weeks had been remarkable.
"So far this year, the amount of outbound mergers and acquisitions activity from Japan has been the second-largest in the world," he said, adding that the acquisitions occurred before the yen was dramatically devalued.
"And now we have a number of non-Japanese clients buying Japanese real estate," he said, with the air of a man who saw opportunities where others saw troubles.
Mr de Ferrari is clearly a fan of Australia, where Credit Suisse has had a private banking operation since 2007, now run by industry veteran Edward Jewell-Tait. But both men are concerned about the traditional domestic bias of local equity investors.
"The Australian dollar is around 30 per cent overvalued," Mr de Ferrari said.
"A 25-basis-point cut in local official interest rates is not going to make a great deal of difference. Bear in mind that the European Central Bank is now talking about negative interest rates," he added, alluding to a situation where bond buyers put down $100 and end up getting $98 back.
"It's not surprising that people who have businesses here hold a lot of local equities, and as long as the local market goes well, it's great. This is a tough song to sing but if all of a sudden, things snap, you don't want to be caught on the wrong end of that bet."
Mr de Ferrari said that while the dividend franking system in Australia was very successful, "it also has the potential to be something of a trap" in that it over-focused investors on one part of the investment process at the possible expense of others such as sustainable earnings or capital growth.
Mr Jewell-Tait said his organisation's core business was based on charging high net worth clients fees for advice.
"Indeed, among our Australian clients we have ultra-high net worth clients for whom we act as a private investment bank, on everything from preserving their capital to assisting with takeovers and expansion."
Mr de Ferrari said his company was "particularly good at servicing entrepreneurs because in Asia, some 32 per cent of companies have an individual at the top".
Mr Jewell-Tait said that while some clients in Australia were the traditional families with inherited money, "we are seeing a growing number from WA and Queensland" from an entrepreneurial background.
