Despite the unfolding political events in many countries, over two-third majority of the Chief Financial Officers (CFOs) in the Middle East shows their optimism about the financial prospects of the region, according to a survey finding.
The Deloitte survey findings of the survey which made public on Friday showed that 67% of CFOs remained decidedly optimistic regarding the financial prospects of their company in the first half of the 2011 compared to the prior six months.
“CFO optimism has reached its highest point in 18 months despite events in ME region,” according to Deloitte’s 2011 semi-annual ME CFO survey which gauges attitudes towards the general economic outlook, financing, valuations and risk.
The Deloitte 2011 semi-annual Middle East CFO survey titled ‘resilient optimism in the face of uncertainty’ provides a forward looking vision on the road ahead for markets in the region. The survey presents results that were collated from numerous respondents within listed and non-listed companies in a variety of industries, namely: manufacturing, consumer business and transportation, energy and resources, real estate, hospitality and leisure, telecom, media and technology, and financial services.
“Despite the cautionary news flow, including the Japanese earthquake and waves of social upheaval and conflict unfolding around the region, CFOs continue to express growing optimism ever-since our first CFO survey was launched 18 months ago,” said James Babb, CFO program leader at Deloitte in the Middle East.
Key points in the Deloitte 2011 semi-annual Middle East CFO survey including 67% of CFOs are decidedly optimistic regarding the financial prospects of their company compared to the prior six months.
“82% of them believe their company’s operating cash flow will increase over the coming 12 months; 63% of CFOs expect an increase in Mergers and Acquisitions (M&A) activity over the next 12 months. 34% indicated that they are planning for an M&A transaction during the period, 24% are looking for a joint venture, while 16% are seeking divestiture,” it said.
“Bank borrowings continue to be the preferred instrument of finance for CFOs with a net 68% holding a favorable view. 52% of CFOs indicated the combination of increased social unrest and potential for military conflict as the high impact risk they are worried about the most.
“CFOs face a tsunami of global debt maturities over the coming three to five years and need to determine their financial strategy now to ensure future success. CFOs are strategically focused on improving cash flow, organic growth, and reducing cost.”
According to the CFOs surveyed, the market indicates that inflation is on the horizon.
“Over the past 18 months CFOs have continued to provide accurate forecasts of the financial and economic prospects in the region and we hope they have provided us with equally prescient insight into what to expect going forward,” Babb added.