JEDDAH: Notwithstanding the prevailing restiveness in the Middle East, chief financial officers (CFOs), who, in essence are strategically focused on improving cash flow, organic growth, and reducing cost, remain reassured. "Despite the cautionary news flow, including the Japanese earthquake and waves of social upheaval and conflict unfolding around the region, CFOs continue to express growing optimism ever-since our first CFO survey was launched 18 months ago," said James Babb, CFO program leader at Deloitte in the Middle East. The Deloitte 2011 semi-annual Middle East CFO survey titled "Resilient optimism in the face of uncertainty" provides a forward-looking vision on the road ahead for markets in the region. The survey noted, among others, that 67 percent of CFOs are decidedly optimistic regarding the financial prospects of their company compared to the prior six months. Eighty two percent of them believe their company's operating cash flow will increase over the coming 12 months. Sixty three percent of CFOs expect an increase in mergers and acquisitions (M&A) activity over the next 12 months. Thirty four percent indicated that they are planning for an M&A transaction during the period, while 24 percent are looking for a joint venture, and 16 percent are seeking divestiture. Bank borrowings continue to be the preferred instrument of finance for CFOs with a net 68 percent holding a favorable view. Fifty two percent of CFOs indicated the combination of increased social unrest and potential for military conflict as the high impact risk they are worried about the most. The survey cautioned that CFOs face a tsunami of global debt maturities over the coming three to five years and need to determine their financial strategy now to ensure future success. According to the CFOs surveyed, the market indicates that inflation is on the horizon. "Over the past 18 months, CFOs have continued to provide accurate forecasts of the financial and economic prospects in the region and we hope they have provided us with equally prescient insight into what to expect going forward," Babb added.
