Almost 4 out of 10 Asian CFOs expect profits to drop or remain unchanged: survey

Financial risks still scare them.

According to Bank of America Merrill Lynch's (BAML) 2014 CFO Outlook Asia, more than three-quarters of Asia’s finance chiefs (76%) expect revenues to grow this year, up from 72% in 2013. 

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This figure far outpaces expectations for sales growth in the US 2014 CFO Outlook (54%) and is an endorsement of resounding confidence in the region’s business prospects, despite an abundance of macroeconomic and market risks.

Growth rates throughout Asia are still strong, despite some slowing, and have been for some time. Remember that 7% growth in China now probably equates to 14% growth 10 years ago. That’s massive," said Robert van der Zalm, CFO, Noble Group. 

The proportion of CFOs in Asia that expects profits to grow is also very high, yet has fallen to 60% from last year’s 65%.

The “value gap” between those who expect revenues to rise and those who expect profits to rise is 16 percentage points, up from 7 last year—suggesting that it is getting tougher to extract value out of revenue growth. 

36% of Asia-based CFOs say financial market risk is their single greatest concern in 2014, compared to 22% in 2013.

A minority (41%) agree that the end of quantitative easing in the US will lead to major problems in Asia. Many CFOs interviewed for this report feel that markets have discounted the effect of tapering