Asia Pacific CFOs Bullish On Revenues, Less So On Profits

Asia Pacific’s leading chief financial officers (CFOs) are increasingly optimistic that revenues will rise in 2014 compared to last year, but are less optimistic on the outlook for profits, according to a survey commissioned by Bank of America Merrill Lynch.

About 76% of 639 surveyed CFOs and other senior financial executives in the region say they expect revenues in 2014 to rise, up from 72% in the same survey last year.

However, just 60% expect profits to rise, down from 65 percent in 2013.

"Margin pressure is a real issue this year given the rising costs of doing business," says Steven Victorin, head of Asia Pacific Corporate Banking and Global Corporate Banking Subsidiaries at Bank of America Merrill Lynch.

"Costs associated with labor, materials and financing have been rising as the Fed normalizes its monetary policy," he adds.

The survey also found that CFOs in the manufacturing sector are the most bullish on both top line and bottom line expectations. Around 83% expect revenue growth, and 67% forecast higher profit this year.

Forty-one percent of CFOs agree that the end of quantitative easing in the U.S. will lead to major problems in Asia, while 59% have no opinion or disagree.

Also, interest in mergers and acquisitions in China has waned, with only 15% of CFOs indicating interest compared to 24% in 2013.

Caishen.Co - Primary Data for China Secondary Investment and Stock Markets
China Expert network