Rupiah volatility has led most chief financial officers (CFOs) to be more pessimistic about their companiesâ bottom lines this year, a survey says
upiah volatility has led most chief financial officers (CFOs) to be more pessimistic about their companies' bottom lines this year, a survey says.
In Indonesia, the level of optimism for profit growth this year dropped to 67 percent from 83 percent last year, according to the 2014 CFO Outlook Asia report compiled by Bank of America Merrill Lynch.
The Indonesian figure is still higher, however, than the average in Southeast Asia, where 63 percent of CFOs surveyed expected a profit increase this year, down from 72 percent last year.
CFOs in Indonesia are the most concerned in the Asia Pacific about currency volatility, with 70 percent listing it as their top financial markets risk, said the report. This is followed by Singaporean CFOs at 55 percent and Malaysian CFOs at 47 percent.
'For Indonesia, currency volatility and a widening current-account deficit add to the uncertainty surrounding bottom-line expectations,' said Gregory Seow, Southeast Asia head of corporate banking at Bank of America Merrill Lynch, in a press statement.
'Just last year, the Indonesian rupiah posted its biggest annual decline against the US dollar since 2000.'
The report surveyed 639 CFOs and other senior financial executives in the region, with almost 25 percent coming from Singapore, Malaysia, Thailand, Indonesia and the Philippines. Close to 60 percent of them represent corporations with annual revenues of US$1 billion and above.
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