European and Americas Corporates Prioritise Regions Close Home for Growth in a Time of Uncertainty but Expansion into New Markets Remain Key with Asia Pacific Ranked Top
New research published by Standard Chartered Bank reveals that while corporations in Europe and the Americas are prioritising their home regions of Europe (84%) and North America (74%) as a source of growth, Asia Pacific (55%) remains a target for their international expansion strategies. Other regions of interest include Latin America (38%), Middle East (32%) and Africa (17%)*.
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The survey, which delves into CFOs’ and treasurers’ ambitions, concerns and goals reflected how the COVID-19 pandemic has reshaped many organizations’ operating and strategic priorities. Over half (51%)* were worried about its impact on growth outside the home region.
This was also indicative in how the top liquidity management challenges identified was supply chain failure.
The most significant perceived challenge to expansion is the ability to understand and comply with local regulations (32%), and technology companies (52%) were most concerned compared to other sectors.
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When it comes down to financing international growth, Equity Capital Markets (76%)* were the preferred choice of funding. Alternatively, 44% of respondents from the Americas were inclined to use cash from across the business for funding, compared with 39% amongst Europeans. Likewise, use of venture capital, such as private placements, was more common, with a more established private placement market in the United States than Europe.
Almost one-third (32%) of respondents noted that their top supply chain priority was to diversify their supplier base beyond their home market. This was followed closely with the need to digitise trade (28%). The lowest priority noted within the trade and supply chain priorities outside the home market was environmental, social and governance (ESG) criteria and sustainability issues. Only two percent nominated it as their top supply chain priority, and 18% identified it within their top three priorities. This could be down view that responsibilities for ESG lie elsewhere in the organisation, or that ESG and sustainability objectives are inherent in the business culture.
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