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[ 13-05-2013 ]
Malaysia's business confidence may be running out of steam, says report

KUALA LUMPUR: New research shows that while Malaysian business confidence has risen in the first quarter of the year, confidence gains here are weaker than other markets.

The Global Economic Conditions Survey from ACCA (the Association of Chartered Certified Accountants) and the Institute of Management Accountants (IMA), which gauges the views of finance professionals across the world, revealed that Malaysia’s business community was losing some of its dynamism, with professionals reporting no pick-up in business opportunities and a dearth of investment opportunities.

 
The global survey of 2000 finance professionals working in businesses of all sizes showed that while 55 per cent of respondents in Malaysia were less confident about the prospects of their organisations, just 13 per cent were more confident.
 
Emmanouil Schizas, Senior Economic Analyst at ACCA, said: “Globally, finance teams, who have their fingers on the pulse of business, have reported glimmers of hope for the future. Although Malaysia has seen confidence rise, a closer look shows that the picture is not so positive. On top of less than encouraging figures on business and external investment opportunities, access to growth capital has followed a negative trend over the last year and a half, including early 2013. As a result, business capacity building has accelerated only marginally in the first quarter of 2013 and is still very subdued compared to last year’s volumes.”
 
Jennifer Lopez, head of ACCA Malaysia, said: “It’s not all bad news. Malaysia’s finance professionals have told us that pressures on cash-flow and new orders fell sharply after rising consistently for a whole year and although forex volatility and inflation have grown, they have done so only marginally, and are still well below last year’s levels. All eyes will be on the GECS Q2 2013 report to see if Malaysia’s businesses report a change in fortune.”
 
The global outlook The survey found that globally, nearly one quarter (24 per cent) of respondents reported they were more confident about the prospects of their organisations than three months earlier, up from 19 per cent in late 2012, while 37 per cent reported a loss of confidence, down from 43 per cent. The highest confidence levels were in the Middle East.
 
More than two-fifths (43 per cent) of respondents in early 2013 believed the global economy was improving or about to do so, up from 30 per cent in the previous quarter, while just over half (54 per cent) expected deterioration or stagnation, down from 65 per cent in late 2012.
 
ACCA’s Emmanouil Schizas said: “The global confidence gains recorded in Q1 2013 are much larger than what would be expected given the conditions on the ground. With the exception of Africa, it seems confidence is being fuelled by an expectation of economic improvement in the future, but it’s not clear, when looking at the fundamentals, where this is meant to come from. As a result, we believe this surge in confidence is likely to be short-lived.”
 
The Global Economic Conditions Survey Q1, 2013 can be downloaded at (http://www.accaglobal.com/content/dam/acca/global/PDF-technical/global-economy/t ech-ms-gec17.pdf). -- Bernama
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