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CFOs bullish on 2014 growth prospects compared to 2013

TAIPEI--Taiwan's leading chief financial officers (CFOs) are more bullish on 2014 growth prospects compared with last year, but identify financial market risk and uncertainty in the domestic economy as the primary challenges to achieving higher revenue and profitability targets.

In a survey of regional CFOs conducted by Bank of America (BOA) Merrill Lynch, 77 percent of Taiwan-based respondents said they expect revenues to rise in 2014, compared to 64 percent who said so in 2013.

The majority of the Taiwanese respondents also predicted that profits will increase in 2014, with 60 percent forecasting higher profits by year-end, consistent with their view in 2013, according to the survey.

“Taiwan's corporate landscape remains one of optimism, with CFOs forecasting a cycle of higher turnover and stable profits in 2014,” Eric Liu, the Taiwan executive of the U.S. financial services provider, told a press briefing Thursday.

“Despite bullish expectations, CFOs in Taiwan are clearly aware that vulnerabilities remain in the form of financial markets risks, an underperforming economy and the impact of a slowdown in China's growth forecasts,” Liu said.

The BOA Merrill Lynch 2014 CFO Outlook Asia report, now in its third year, surveyed 639 CFOs and other senior financial executives in the Asia-Pacific region. Nearly 60 percent of them represent corporations with annual revenues of US$1 billion and above.

In Taiwan, CFOs identified financial market risks, including interest rate, counterparty and liquidity risks, as their primary concerns for 2014.

Some 40 percent of Taiwan's CFOs pinpointed financial risk as the greatest threat facing their businesses in 2014, the third-highest level among the 12 markets surveyed, behind South Korea (47 percent) and Japan (43 percent).

Within financial markets, over 43 percent of Taiwan's CFOs cited liquidity risk as a concern, reflecting the degree to which Taiwanese businesses rely on operations and sales in China.

Some 95 percent said that political risk will impact their business activities, the highest level in the region, according to the survey.

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