CFOs' optimism level over financial conditions declines: D&B

The confidence level of the country's senior finance executives on financial and macro-economic conditions has fallen sharply for the current quarter due to a host of factors like political uncertainty and deteriorating investment condition, says a survey.

The optimism level of Indian CFOs for April-June quarter at 53.1, a sharp fall from the level of 59.4 seen during the January-March quarter 2013. The same was at 57.5 in the corresponding quarter of the previous year, research firm Dun & Bradstreet (D&B) said.

Optimism level ranges from 0 to 100, 0 being the most pessimistic and 100 being the most optimistic.

"... Factors such as political uncertainty, emergence of debt crisis in Cyprus, deteriorating investment condition, increased number of shelved projects, substantial moderation in GDP growth and significant widening of the current account deficit had dented the business sentiment," Dun & Bradstreet India Director-Risk Management Solution Arvind Raghav said.

Raghav further noted that "continuation of the reform measures is crucial to support the revival of the sentiment among the corporate sector going forward."

According to the survey, over 85% of the CFO perceives the level of financial risks on company's balance sheet to increase or remain unchanged during Q2 2013 as compared to the previous year's quarter.

Around 44% of the CFOs expect the level of financial risks on company's balance sheet to increase which is a five quarter high.

Around 36% of the CFOs indicated an increase in risk appetite for second quarter of 2013, marginally up from 28.9% of the CFOs indicating an increase during first quarter of 2013.

In line with previous survey, a higher percentage of CFOs have indicated reducing cost and cash flow management to be their priorities during the next six months.