CFOs ‘cautious yet optimistic’, says Deloitte

Corporate CFOs are “more optimistic” about their companies’ financial
prospects than at any time since September 2007, with 39% of CFOs anticipating
their companies to make acquisitions before the end of the year, a Deloitte
survey has revealed.

The Deloitte CFO Survey for Q3 2009, which polled 120 CFOs including 36 from
FTSE 100 companies, also revealed that 92% of the participating CFOs believe
that mergers and acquisitions activity will increase over the next 12 months.

However, perceptions of market growth are less assured. Only 14% of CFOs will
be expecting to return to normal rates of growth in their industries, while 73%
are looking for sluggish growth and 12% expecting their markets to contract next
year. Just 27% of CFOs are thinking of increasing future hiring, with a mere 11%
polled thinking of increasing the hours worked for existing employees.

Most CFOs do not expect banks to increase their level of corporate lending
until at least the middle of next year, while net bank borrowing continues to
fall in favour of raising finance from issuing corporate bonds and equities.
Indeed, 95% of the surveyed CFOs expect the recession to have brought about more
fiscally conservative attitudes to debt.

Margaret Ewing, Deloitte partner and vice chairman, said: “While the economic
outlook has improved, CFOs remain cautious. Many more CFOs plan to reduce debt
over the next year than raise it. In future, companies are likely to be more
financially conservative… bank borrowing [has gone] from being the most
attractive to least attractive form of finance in the space of just two years.”

Further reading:

Deloitte
Q3 2009 CFO Survey