CFOs spend a lot of their time investigating and analyzing investment opportunities. They need to be aware of domestic markets and the direction they are heading. They also need to keep an eye on international markets and any opportunities that could arise there for a company in the US.
Something that has been bothering investors for the past year or two involves a little country in the Mediterranean with big problems: Greece. Many people assume that Greece’s economic problems are something that financial officers and stock market players only need to pay attention to, but that’s not the case.
Greece is making everyone – from the personal investor, to the heads of multi-billion dollar funds, to the CFOs of companies across the country – wary about the future of our markets. This means they are less likely to spend funds which need to be spent in a struggling economy. Recent news has made these concerns even greater.
Libya and Syria vs Greece
It’s important to note that, according to Antonia van de Velde for CNBC, many CFOs are still looking to “international expansion in order to drive revenue.” A recent survey of CFOs from average sized corporations has found that “Spain is now perceived as being riskier than Egypt, while Greece is considered less safe than Libya or Syria.”
Yes that’s right, CFOs now think that two war-torn countries and one post-revolutionary country are better for investing than two Euro zone countries. It’s a no-brainer at this point to stay away from investment in Spain and Greece. However, it’s important for CFOs to look elsewhere to keep capital and revenues flowing and find new opportunities.
What else are CFOs thinking?
The consensus among CFOs is that China and the US hold the number one and number two spots respectively for attractiveness in investment. Other important areas to look at are the BRIC countries besides China, which consist of Brazil, Russia, and India.
Both Japan and France have dropped in their impressive rankings to much lower than what they were, with France hitting 13th place and Japan hitting 27th place. The worst places to invest? Iran and Iraq followed closely by Greece.
Finally, the general concerns of CFOs have changed in the past year as well. Before, “red tape and bureaucracy” were the major concerns of CFOs, but now “currency fluctuations and geopolitical risk” are the primary concerns that could impede investment.
Do you share these same beliefs with the CFOs surveyed?