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Asian CEOs bullish on 2008 prospects: PwC

ASIAN CEOs are more confident about business prospects in the year ahead, despite a fall in confidence globally, a PricewaterhouseCoopers (PwC) survey has found.

‘Many companies in Asia continue to be the engine of economic growth that has been driving prosperity for more than a decade,’ PwC said.

As a result, 56 per cent of Asian CEOs are confident going forward, up from 49 per cent last year, according to the firm’s 11th Annual Global CEO Survey.

In contrast, confidence among North American CEOs has sunk to 35 per cent, from 53 per cent last year.

Globally, half of CEOs who responded to the survey said they were ‘very confident’ about revenue growth this year, compared with 52 per cent last year.

There is a ‘wide disparity in confidence levels between CEOs in mature and emerging economies’, said PwC.

Sentiment is strongest in China and India, where 73 per cent and 90 per cent of CEOs respectively expressed confidence.

Latin American and Central and Eastern European respondents were also relatively confident, with 55 per cent strongly believing that their company’s revenue would grow.

‘The world’s economic axis is shifting as Asia consolidates its position and we have good ground for feeling optimistic about the immediate future’, said Gautam Banerjee, executive chairman of PwC Singapore. ‘Our financial systems have held up well during the global credit crisis. We expect the economic outlook to be generally favourable.’

Asian CEOs are also more interested in executing cross-border mergers or acquisitions in the next 12 months, though most would prefer to make their deals in the Asia-Pacific region itself.

Half of all respondents that head big companies with annual revenue of more than $10 billion said that they worry about handling cultural conflicts and capturing deal value.

Surprisingly, CEOs of large companies worry more about such matters than chiefs of smaller firms, despite typically having more experience in cross-border integrations, Mr Banerjee said.

Many Asian and Middle Eastern investors ‘have recognised the need to tread carefully’, he said. They tend to prefer low-profile minority stakes to minimise opposition, and are trying to improve transparency and subject themselves to scrutiny.

Worldwide, Asian CEOs are the most worried about the availability of key skills, with almost 80 per cent of respondents from the region citing this concern. Many also feel they need to change the way their company develops talent.

But CEO commitment to developing people is still highest in North America, where 85 per cent of chiefs said that their time is best spent ‘dealing with the people agenda’.

PwC’s survey involved 1,150 interviews with CEOs in 50 countries in the last quarter of 2007.

 

Source: Business Times 5 Feb 08

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