Singapore CEOs across sectors were found to be more optimistic about Singapore’s growth potential and their companies’ earning power over the next three years, with 92% of Singapore CEOs expressing confidence in Singapore’s growth outlook.
This compares to the 82% of CEOs globally, who were less bullish in the outlook on their respective countries and organisations.
Confidence levels for Singapore CEOs were found to have increased 15% y-o-y, up from 80% in 2020, compared to an 8% y-o-y growth for their global peers, from 76% in 2020.
The findings were reported by the KPMG 2021 CEO Outlook Survey, which polled 1,325 CEOs from June to August 2021. The survey included leaders from Asia-Pacific countries including Singapore, Malaysia, Indonesia, Cambodia, as well as global key markets such as Australia, Canada, China, Germany, India, Japan, UK and US.
The CEOs came from 11 key industry sectors, namely in asset management, automotive, banking, consumer and retail, energy, infrastructure, insurance, life sciences, manufacturing, technology, and telecommunications.
In addition, the survey found that 96% of Singapore CEOs estimated that their company’s earnings will increase in the next three years. While 72% of the number see an earnings outlook of up to 5% per annum, another 24% of the number were more positive in their outlook, with a growth rate of about 5-20% per annum.
The new figures mark a sharp contrast to 2020, where 0% of Singapore CEOs felt their company’s earnings could be higher than 5% per annum.
Meanwhile, only 14% of CEOs around the world felt that their companies could see an earnings outlook of between 5-20% per annum.
Higher appetite for M&As
With the bullish sentiment, 84% of CEOs in Singapore say that the technological disruptions are seen as more of an opportunity instead of being a threat.
Some 88% of them are looking to actively disrupt the sector they operate in, up from the 76% in 2020 and 68% in 2019.
This is also 15% higher than the 73% of global CEOs looking to disrupt their sectors.
Of the Singapore CEOs, 36% of them have deemed mergers and acquisitions (M&As) as the most important strategy in achieving their organisation’s growth objectives.
According to KPMG, M&A appetite among these CEOs have surged to a three-year high in 2021, with 92% saying they will make acquisitions that have “moderate to significant” impact on their organisation in the next three years.
Other strategies are also still being used, with 28% of CEOs seeking organic growth through research and development (R&D), capital investments, recruitment; 28% saw strategic alliances with third parties; while 4% each deem joint ventures and outsourcing as growth strategies.
The results are in contrast with the findings in 2020, where 32% of CEOs saw joint ventures and strategic alliances with third parties (28%) as their top two strategies.
Singapore CEOs more confident in face of cyber-attacks
About 80% – or four in five – Singapore CEOs have indicated that they are “well prepared” to deal with a cyber-attack should it occur.
This is 40% higher than the 60% of CEOs who said so in 2019 and 2020.
The figure is also much higher than the 58% of global CEOs in 2021 who said that they are prepared for a cyber-attack.
More jobs to be created over the next three years
Some 84% of Singapore CEOs say they expect more jobs to be created in the next three years, slightly less optimistic than the 88% of CEOs globally.
For most of the sectors, 52% of Singapore CEOs are anticipating a headcount increase of up to 5% in their companies. About 28% of Singapore CEOs from the consumer and retail, energy, insurance, manufacturing and telecommunications sectors say they expect an increase in headcount of 6-10%.
Local CEOs in the infrastructure sector were the most optimistic, with 4% projecting a rise in headcount of 11-25%.
The figures are similar to global findings, with 27% of CEOs around the world estimating a 6-10% increase in headcount. Some 5% of global CEOs say they expect a headcount of 11-25% over the next three years.
Supply chain risks and external assurance for ESG issues
Compared to their global counterparts, 76% of Singapore CEOs are carefully managing supply chain risks, with their supply chains under stress over the past 18 months.
On issues pertaining to environmental, social and governance (ESG) principles, 80% of Singapore CEOs – compared to the 58% of CEOs worldwide – say there is “significant demand” from stakeholders for increasing reporting and transparency on ESG issues.
Of this 94% of Singapore CEOs expect to be held personally responsible for driving progress in addressing social issues, compared to 71% of CEOs around the globe.
As it is, 63% of Singapore CEOs say that their pay is already tied to ESG outcomes, compared to just 30% of CEOs globally. Specifically, 80% of Singapore CEOs have had their annual bonus tied significantly to ESG performance, compared to 76% of the CEOs in the world.
CEOs in both Singapore (40%) and globally (42%) say they are struggling to come up with a compelling ESG story for their organisations. Other struggles include bringing up the rigour of ESG performance reporting to match with their current financial reporting quality and addressing the various ESG reporting needs for different investors and stakeholders.
Furthermore, 56% of Singapore CEOs reveal that ESG programmes have reduced their financial performance, compared to the 24% of CEOs worldwide.
Around 40% of global CEOs state that ESG programmes have neutral or a negligible impact on their financial performance, compared to just 4% of Singapore CEOs.
On this, 88% of Singapore CEOs expect to rely more on the external assurance of their ESG data, compared to just 55% of CEOs globally.
That said, 96% of Singapore CEOs – compared to the 74% of global CEOs – believe that large corporations like theirs have the ability and resources to help governments find solutions to pressing global challenges.
Photo: Bloomberg
