Asia's Prospects Shine Relative to the West
Asian CFOs see growth closer to home; Western economic fires threaten.
As 2012 begins, CFOs across Asia are combining optimism with caution, upbeat about the prospects for their own companies in the year ahead yet mindful of the threats posed by economies in the West – namely the European debt crisis and the U.S. budget deficit.
CFOs in Asia predict regional and domestic growth for their companies and have a rather cautious view of the West. However, all recognized that success in Asia hinges on the West's economic ailments. Will the Year of the Dragon prove that Asia is immune to the troubles of the West?
Upbeat But Not Complacent
Cautious optimism for Asia is the overriding theme of Bank of America Merrill Lynch's inaugural CFO Outlook Asia report. Bringing together responses from 465 CFOs across seven countries and territories in Asia – Australia, China, Hong Kong, India, Japan, Singapore and South Korea – the report looks to tap into the views of the finance chiefs of Asia's large corporations.
With the global financial crisis still fresh in the minds of CFOs, could the next 12 months see the return of those challenging market conditions? In Asia, where the impact of the crisis was less severe, CFOs report they are upbeat on their own revenue expectations – but they are far from complacent, and confidence in the economy today is tempered by caution about the year ahead.
Meanwhile, the prospect of a credit crunch does not appear to worry the CFOs of Asia. Only 10% of CFOs say the availability of financing reduced in 2011. M&A activity is expected to rise this year with CFOs looking to buy in Asia, but bargains are not anticipated.