Malaysian CEOs optimistic over company growth: KPMG

KUALA LUMPUR: Chief executive officers (CEOs) in Malaysia are maintaining a positive outlook with eight out of ten reporting confidence in the growth prospects for their company and the industry they operate in.

Of this, 60 per cent are projecting cautious top-line revenue growth of up to two per cent over the next three years, according to the 2019 Global CEO Outlook report published by KPMG International.

Globally, business leaders are optimistic about the future with 94 per cent confident about their organisation’s growth prospects, an increase over the 90 per cent from 2018.

However, the report revealed CEOs have growing anxieties about existential threats.

The report noted business leaders in Malaysia and around the world ranked environmental and climate change risks as the biggest threat to organisational growth, followed by those caused by disruptive technology, territorialism, cybersecurity and operations.

The report deduced that CEOs are focused on building the organisational resilience needed to master disruption and maintain growth momentum.

KPMG in Malaysia, managing partner, Datuk Johan Idris said more companies in the region are increasingly adapting their business strategies to address climate related shocks amid a globally connected market.

He said climate change is impacting the business landscape and the cost of doing business through economic and infrastructure damage, resource scarcity, disruption in plantation output and supply chain, and changing consumer sentiments and behaviour in support of ethical businesses.

“Businesses work in an ecosystem of partners, suppliers, and complementary services that require each component to work efficiently and effectively.

“Thus, CEOs must look into developing sustainable business plans and policies to achieve organisational resilience,” he added.

KPMG also found that a proactive merger and acquisition (M&A) strategy is on the agenda for eight out of 10 CEOs in Malaysia over the next three years in pursuit of growth.

Driving this appetite are the twin urges to eliminate direct competitors and to reduce costs through economies of scale and synergies.

Business leaders in Malaysia are also prioritising expansion into emerging markets over the next three years, with Central and South America and the Middle-East topping their list, as well as countries and regions that form part of China’s Belt and Road Initiative.

Meanwhile, 31 per cent of CEOs in ASEAN are wary of the US-China trade negotiations and the impact it will have on their organisation’s growth.

“We can expect business leaders in the ASEAN region to keep a close eye on the ongoing US-China trade tensions even as they brace for the impact should the situation escalate,” Johan said. - Bernama