ASIA'S financial instutitions are slightly more optimistic about merger and acquisition (M&A) opportunities than they were a year ago, a new survey has found.

About 42 per cent of senior financial services executives in Asia, including chief executives, board chairmen and directors, expect their firms to make an acquisition over the next year, up from 38 per cent in a similar survey last year.

PricewaterhouseCoopers conducted this survey - its fourth annual one - in January and February to examine the impact of the current financial turmoil on M&A in Asia.

Of the 215 executives polled, about 9 per cent were in Singapore, with the rest coming from 13 other Asia-Pacific markets including Thailand, Japan, China, Australia, India, Hong Kong and Vietnam.

The bulk of M&A activity is likely to come from Taiwan, China and Vietnam, where over 65 per cent of executives in each market said they would most likely make an acquisition, either overseas or domestically, in the next year.

Those in the more mature markets, such as Hong Kong, Japan as well as Singapore, were more cautious.

In Singapore, just 32 per cent of respondents indicated they were planning to embark on an acquisition.

Restructuring existing businesses seems to be a more popular move among executives here, with 47 per cent planning to do so to reduce capital expenditure. Another 11 per cent have frozen investment and expansion plans, saying they prefer to wait for the market to stabilise.

'The appetite for larger deals may have waned as buyers go for smaller-sized strategic deals,' said PwC Singapore's financial services industry practice partner, Mr Sam Kok-Weng.

Valuation of assets pose the biggest challenge because of a lack of clarity on the financial position of institutions.