DOHA: The optimism among Middle Eastern CFOs (Chief Financial Officers) improved in H2 2012 despite political uncertainty in the region, Audit and Financial Advisory firm Deloitte’s Q4 Global CFO Signals report revealed.
A net 54 percent of CFOs feel more optimistic about the prospects for their companies compared to 33 percent recorded six months ago, according to the report.
Increases in revenues, cash flows, and bank borrowings were sighted as the top three business metrics most likely to change in 2013. In addition, steady oil prices, combined with the continuance of large public expenditures serve as an underpin for strong economic growth relative to other parts of the world.
The survey report noted that over the next 12 months, CFOs are focusing predominantly on organic growth, cost reduction, introducing new products and services, and increasing cash flows. Some 47 percent of CFOs are planning for strategic alliances, a steady increase from the 13 percent reported two years ago and an indication of increasing risk aversion.
“CFOs do not expect much change in the levels of M&A activity in the next 12 months. For the 30 percent of CFOs who are planning M&A transactions, the majority are aiming for targets aligned to existing businesses and within the MENA region rather than in other parts of the world. Only 10 percent of CFOs are considering an IPO this time,” the survey revealed.
A combined 74 percent of the CFOs rated the general level of external financial and economic uncertainty as either above normal or at a high level.
This was the same percentage noted in H1 2012. Due to this level of uncertainty, when asked if it is a good time to be taking greater risk into their balance sheets, 65 percent of the respondents would not do so.
More than three-fourths of CFOs expect an increasing level of competition challenging their companies for market share in the next 12 to 24 months. CFOs also expect a competitive landscape impacted by changes in regulations, new technologies, and consolidation in their industries.
The survey findings showed that Middle East CFOs are the most optimistic globally, with this bolstered by steady oil prices and large public expenditure. Many other findings were uncovered – as you will find in the attached.
On March 25, Deloitte experts will be gathering in Doha to discuss the results of this survey.
The Peninsula
