Southeast Asia Capital Confidence Barometer April – October 2013
Growing confidence, cautious attitude to emerging opportunities
Our eighth Global Capital Confidence Barometer shows a clear rebound in corporate confidence. Closer to home, the sentiments are not dissimilar among Southeast Asia respondents in the survey, but their attitude to capitalize on emerging opportunities is still cautious.
Southeast Asia respondents have a high vote of confidence in the global economic outlook for the next six months. Their level of confidence in the local economies has also bounced back significantly compared to six months ago.
Compared to popular economic forecasts for the region, however, Southeast Asia respondents are predicting a slightly lower growth rate for the next 12 months.
Growth is clearly the winner when it comes to the overall focus for Southeast Asia respondents. And in this regard they prefer organic growth to acquisitions.
There is a clear recognition in sentiment and expectations expressed in the current survey that the region presents good growth prospects, strong or stable earnings for businesses and a good sense of balance between driving growth and managing risks. But the attitude to capitalize on these opportunities is still cautious.
Ninety-two percent of Southeast Asia respondents also believe that access to credit is either stable or likely to improve over the next 12 months. Despite this and the economic prospects in the region, there is low appetite for debt and capital expansion. Surplus cash continue to be the primary source of funding to fuel growth.
While Southeast Asia respondents have expressed a low appetite for acquisitions over the next 12 months and a reluctance to sell any of their businesses, inbound investors continue to see the region as a good prospect among emerging markets for investment.
Businesses in Southeast Asia are clearly at a cross-road. And the signs are clear. Southeast Asia as a region is no longer a hidden nugget among competing emerging markets. Caution needs to be challenged to win the race for growth.
About this survey
The Global Capital Confidence Barometer is a regular barometer of senior executives from large companies around the world, conducted by the Economist Intelligence Unit (EIU). Our panel comprises select EY clients and contacts, and regular EIU contributors.
This Southeast Asia subset of our findings gauges corporate confidence in the economic outlook, and it identifies boardroom trends and practices in the way companies manage their Capital Agenda.
Profile of respondents
- Panel of over 1,600 executives surveyed in February and March 2013
- 131 executives from Southeast Asia
- Companies from 50 countries
- Respondents from more than 20 sectors
- 794 CEO, CFO and other C-level respondents
- 912 companies would qualify for the Fortune 1000 based on revenues
The Capital Agenda
Based around four dimensions, it helps companies consider their issues and challenges, understand their options and make more informed capital decisions.
- Preserving capital: reshaping the operational and capital base
- Optimizing capital: driving cash and working capital and managing the portfolio of assets
- Raising capital: assessing future capital requirements and assessing funding sources
- Investing capital: strengthening investment appraisal and transaction execution