Chief financial officers of the domestic companies are the most optimistic ones among their Asian peers when it comes to their profit growth outlook this year with majority believing that political change will have a significant impact on the economy, says a survey.
According to a Bank of America-Merrill Lynch CFO outlook survey, "Majority of domestic CFOs are confident that both revenue (76 per cent) and profits (72 per cent) will grow in 2014. As many as 53 per cent of them feel political changes will be positive for the economy."
The survey was carried out among 639 respondents across Asia, including 88 respondents from the country, which is the highest representation.
"A slowing economy and rising costs have impacted margins, but the ongoing optimism of CFOs reflects the fundamental, long-term strength of the domestic economy," head of corporate banking at BofA-ML Kavish Arora said.
The survey also pointed out that slowing economy and currency volatility are the two biggest risks, but added that US monetary policy is not seen as a major concern by the domestic CFOs.
"Over a quarter of the CFOs (27 per cent) said they would look at headcount reductions to improve profitability," it said.
On the mergers and acquisitions, the survey said 55 per cent of the respondents don't intend to undertake any M&A deals during this year, while 25 per cent will look at small and medium-sized accretive deals.
"As many as 58 per cent of domestic CFOs say they will use surplus cash for organic expansion and 49 per cent said they will consider expanding into newer countries," the survey said.
