Biography

Percy Batliwalla is Managing Director and Head of Asia Pacific Sales at Global Treasury Solutions (GTS) at Bank of America Merrill Lynch. Based in Singapore, his primary responsibilities include sales management as well as developing and implementing an integrated strategy for GTS clients in the region.

Batliwalla also proactively provides thought leadership and customized working capital solutions spanning treasury, liquidity, bank notes and trade products to meet the needs of clients across the Corporate and Financial Institutions segments.

Prior to joining Bank of America Merrill Lynch in May 2010, Batliwalla was with J.P. Morgan for six years, most recently as head of Financial Institutions – Banks in Asia Pacific. A career banker, Batliwalla’s prior experience includes a variety of roles in corporate banking, corporate finance, structured trade and corporate audit.

He is a Chartered Accountant and an Associate Member of the Institute of Chartered Accountants in India.

This was the inaugural year for the BofAML CFO Outlook survey in Asia. What prompted the geographical expansion of the survey in 2012?

To give a little background, CFO Outlook has been running for 14 years in the US and is a well-established study capturing the views of the country’s CFOs. This year we felt that the time was right to bring this survey and analysis into Asia: this is an incredibly diverse and dynamic region which has proved remarkably resilient during the recent challenging years. At the same time, companies from the West are increasingly setting their sights on growing their businesses in Asia at a time when the returns they can get on their cash are limited.

CFO Outlook Asia focused on seven markets in Asia Pacific: Australia, China, Hong Kong, India, Japan, Singapore and South Korea. Some of the key questions addressed are: how CFOs in Asia rate their own economies today and what do they expect to see in the coming year? What are their greatest economic and financial concerns? How sensitive are Asian economies to economic turbulence originating in the West? What are CFOs in Asia looking to achieve in areas such as M&A and financing in 2012? And to what extent do the views of CFOs vary across the different countries covered by the study?

What would you highlight as the most important points that came out of the survey?

One of the most interesting findings is that, on average, CFOs in Asia view their own economies as more robust than the global economy. On a scale of one to ten, CFOs rated Asia 5.9 while giving the world economy the lower score of 4.7. Nevertheless, there was significant variation across the region – CFOs in China rated their economy the highest (7.5) while CFOs in Japan were the least positive, rating their domestic economy 4.1.

Another key finding is that despite their confidence in the current state of their domestic economies, CFOs in Asia are not resting on their laurels, and when it came to the economic outlook for 2012 their responses were more cautious. 38% predicted flat growth in their domestic economy while 27% forecast contraction in the coming year. Again, CFOs in Japan were particularly pessimistic: 44% of them expected the country’s economy to contract.

When asked about the prospects for their own companies in 2012, CFOs were once again more optimistic: 58% said that their revenues would increase this year, while 52% are expecting rising profits. The gap between these figures suggests that gaining market share is a higher priority for companies in Asia this year than profitability – particularly in South Korea, where 60% forecast higher revenues but only 42% expected higher profits.

Meanwhile, growth is high on the agenda for many of the companies surveyed. A third of CFOs said they are planning to take part in a merger or acquisition this year and the vast majority of those intend to be the acquiring party. More than half are planning to focus on M&A activity within their own countries, but China was the most favoured acquisition target for the group as a whole. On the other hand, Chinese CFOs were the most likely to be planning acquisition activity this year.

How much of a threat are economic difficulties in the West to growth in Asian economies?

Asia’s CFOs certainly perceive Western economic difficulties to be a significant threat. The survey found that overall the Eurozone debt crisis was the biggest economic concern across the region, followed by the US budget deficit. The level of concern varied between countries, however: CFOs in India were the least concerned about both of these issues, whereas Australian CFOs were the most worried about the European debt crisis, and CFOs from China saw the US budget deficit as a bigger threat.

It is clear that concern about economic threats from the West looms large in Asia. On a scale of one to ten, respondents on average rated the sensitivity of their own economies to a global downturn at 7.0. Again, there was significant variation between countries: CFOs in Japan rated their economy the most sensitive, while CFOs in Australia were the least concerned.

Only 11% of companies interviewed across the seven economies plan to decrease their borrowing in the next 12 months. What can we read into this?

The responses around the topic of financing suggest that CFOs in Asia are not expecting a credit crunch in 2012. The survey results suggest that credit availability is not a major concern for the region’s CFOs right now, probably because their experiences last year were largely positive – 45% said that availability of credit didn’t change last year, while 39% said it had actually increased.

As far as 2012 is concerned, Asia’s CFOs have big plans: over half of those planning to use finance this year intend to fund domestic expansion. While most are planning to use bank loans, a significant percentage (44%) intend to fund themselves using internal sources.

What challenges do you foresee for the Asian region over the next 12 months?

As in other regions, the biggest challenge right now is uncertainty. Markets remain volatile and even though CFOs in Asia are confident where their own economies are concerned, they are highly aware of economic threats from elsewhere in the world. Meanwhile, companies in Asia face a multitude of other challenges in the coming year. Some of the most significant include navigating issues such as inflation, domestic politics and currency strength; delivering revenue growth despite challenging markets, and contending with competition both from other businesses within the region as well as from Western companies expanding into Asia.

For those interested in viewing the full report, they can access it at http://corp.bankofamerica.com/business/outlookasia/home