Financing Needs

Borrowing Intentions High in Australia

Do you expect your borrowing needs to increase, decrease or stay the same in 2012 compared with 2011?

Thirty-seven per cent of companies in Asia plan to increase borrowings in 2012. The rest will keep borrowing at the same level as in 2011 (37%), decrease their borrowings (11%) or not borrow at all (11%).

Meanwhile:

  • Borrowing intentions are higher in Australia (54%), the market that has flagged credit availability as a significant financial concern.
  • Forty-nine per cent of companies in China intend to increase their borrowings in 2012.
  • Only 11% of companies will decrease their borrowing, indicating that enterprises in general still see growth opportunities in 2012.
 

Financing Purpose

Planning Domestic Expansion

For what purpose are you currently considering financing?

Companies in Asia are planning to use finance primarily to expand within their domestic market (55%). It is reasonable to assume that in times of economic uncertainty, CFOs focus on what they know best: operations in their own countries.

  • CFOs based in India (76%) and China (72%) are the most aggressive in expanding domestically.
  • Only 34% of companies in Japan will grow their business within that country and the same proportion plan to use financing to expand abroad.
  • Fifty per cent of CFOs will use financing for working capital, particularly those in China (59%), India (57%) and Australia (56%).
  • Forty eight per cent are planning to finance capital expenditure, especially in India (67%) and China (65%).

Refinancing, restructuring, recapitalisation and turnaround financing are not key financial activities in Asia, given the growth environment in the region.

Borrowing Needs In 2012
 
 
Purpose of Financing