Indian CFOs most optimistic group in Asia: Amex survey

The survey covered 507 senior finance executives at companies with annual revenue of $500 mn or more

Indian chief financial officers (CFOs) appear a confident bunch. Not only are they more optimistic on the growth prospects of the domestic economy than their peers in China, Hong Kong and Japan, but they also lead the Asian region in terms of their investment and spending plans across business functions, a survey conducted by American Express has found.

“India is at par with China in the Asian region with a 17 per cent expected average increase in spending and investment...Indian CFOs lead the Asian region in terms of their plans to spend on transportation and logistics, computer hardware, enterprise IT, labour and headcount, and business and professional services,” American Express said in its 'Global Business and Spending Monitor 2014' report.

The survey covered 507 senior finance executives at companies with an annual revenue of $500 million or more. Thirty of these respondents are based in India. The survey was conducted in March, 2014.

As many as 86 per cent of Indian CFOs expected the domestic economy to expand over the next year, while 79 per cent of them anticipated economic growth to be a key driver for business expansion. In contrast, CFOs in China, Hong Kong and Japan have scaled down their expectations of domestic economic growth compared to last year.

 

“Compared to their counterparts in other Asian countries, Indian CFOs demonstrate highest confidence in their local economy,” the report said.

The enthusiasm about the Indian economy was not only restricted to local CFOs. More than 77 per cent respondents expect maximum growth to accrue from the Indian market followed by 67 per cent respondents expecting growth from the Asian region.

While Indian CFOs are not only planning to increase spend, many of them have aggressive investment plans. “Eighty-seven per cent of Indian CFOs will increase spending and investment; 30 per cent will increase spending and investment aggressively while another 56 per cent will increase moderately,” the report said.

The reasons to increase spends vary — from remaining competitive to protecting market share, and from pursuing innovation to improving financial returns. Many Indian CFOs also believe they need to spend more to grow through acquisitions and business partnerships.

The top business activities cited for investment include improved business intelligence and delivery, adding capacity for production and service delivery, sales and marketing activities, and improving production process efficiency.

The survey also showed that Indian finance executives' importance in their organisations is on the rise. “Eighty-seven per cent Indian respondents agreed that the finance viewpoint carries an influential and determining factor in strategic operations decisions,” the report said.