02/06/2013

Searching for pockets of opportunity

After a week in Davos for the World Economic Forum Annual Meeting, I took off on Saturday for a trip to Asia to see if the prognostications in an Alpine ski resort held true in the real world. Here in Asia, we remain in the relatively early stages of economic transformation and there’s plenty of economic euphoria to go around. I see potential benefits for those willing to make a short-term investment in selecting and targeting opportunities in the right markets – I’ll come back to this point later.

While not euphoric, overall the mood in Davos was distinctively upbeat, at least compared to last year. We heard a lot more about optimism and opportunity – maybe too much. One bank CEO even cautioned that the mood was overly ebullient and needed to be knocked down to a more realistic level.

The CEOs interviewed in PwC’s 16th Annual Global CEO Survey expressed more caution than optimism. Even though the global economy may not be on the verge of a boom, these CEOs still perceive ‘pockets of opportunity’. China continues to top the charts (31%) as the country that CEOs consider most important for their overall growth prospects in the coming 12 months.

A strategy carefully targeted at those pockets of opportunity could produce rewards. So which ones should you choose? That depends significantly on the strategy, structure and, to a certain extent, the geography of your own company. For example, as reported in PwC’s Resilience: Winning with risk, social unrest in Egypt is a bigger business concern for domestic, privately-held companies with concentrated investments in Egypt than for foreign multinationals with the leverage to wait for opportunity.

I also found it interesting that only one non-BRIC ‘emerging market’ - Indonesia -  is on the CEO Survey results’ top ten target markets. That suggests to me that there will be a lot of competition in these markets. Maybe the top ten are not such a safe play after all. Perhaps the real winners will be those who take intelligent risks in markets that are not as saturated.

 

Miles Everson
US Advisory Financial Services Leader
Email: Miles Everson

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