Asia CFO Survey Report - Macro Risk Landscape and Implications

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May 2020

This report highlights our recent survey on the macro risk landscape and its key implications.

Survey on macro risk landscape. We conducted a survey with 300 key decision makers across Southeast Asia (64%), Mainland China and Hong Kong (36%) to navigate the macro risk landscape given the current uncertainties. After we completed the survey on 24 January 2020, we conducted a follow-up poll with a sample of survey respondents on the impact from COVID-19.

Sector representation. In terms of sectors represented in the survey, 24% were from Industrials (IND), 22% from Consumer Goods (CG), 19% from Oil, Gas and Chemicals (O&G), 15% from Construction and Infrastructure (C&I), 12% from Technology, Media and Telecommunications (TMT) and 9% from Real Estate and Hospitality (REH).

Ranking of key macro risks. Our inaugural survey of key decision makers indicated that a sharp economic slowdown is the highest ranked macro risk, followed by tightened credit conditions, geopolitical risks and climate change. Concerns over sharp economic slowdown have been intensified with the onset of COVID-19.

Sharp deceleration of outlook after COVID-19. Sentiment has deteriorated markedly since the onset of COVID-19, with a high number of respondents highlighting that the impact is more serious than US-China trade tensions. There is also urgency to implement measures such as cost cuts, diversification of markets and alternative sourcing as a result of the supply chain disruptions.

Measures to address elevated macro risks. Given elevated macro risks, respondents’ key focus areas include near-term tactical strategies such as cost control and cautious/delayed expansion, as well as medium-term strategic measures such as supply chain management and product/revenue diversification. Interestingly, COVID-19 is likely to result in corporates reviewing their supply chains after the disruptions. Vietnam and Indonesia are set to be key beneficiaries of companies seeking to diversify manufacturing bases or markets.

UOB offers solutions to help businesses navigate some of the risks and issues highlighted in this report. For more information on UOB’s solutions, please contact us here.