Asian CFOs Optimistic about Business Outlook

1. Asian Business Outlook Part of the Global Business Outlook A joint survey effort betweenDuke University and CFO Magazine

2. Top Concerns of Asian CFOs

3. Business Optimism Index While the Asian Optimism Index declined from its year-ending high last quarter, CFOs in China, India, and Singapore continue to be optimistic about the outlook of their own firms as well as their respective countries Global Trends March 2018 Outlook Sep 2017 Outlook Country Business Optimism Index • Country / Region • Country / Region Own-Firm Business Optimism Index • Own Company • Own Company Notes: Presented data are the mean value for each region or country, Scale from 0-100

4. Expected Product Price Inflation Asian inflation outlook continued its upward trajectory, boosted by higher expectations in Japan and India Sep 2017 Outlook Global Trends March 2018 Outlook Product Prices Product Prices Mean price increase of 4%, median of 3%, expected in Asia • Within Asia, CFOs in Japan and India expect product price inflation to rise, even though inflation expectations in China have been consistent with the previous quarter. Inflation expectations seem high across regions • Except for sharp increase in Europe, most regions see flat or modest growth in Q1-18. • Unlike other regions, inflation expectations in Asia have been increasing since Q2-2017. Notes: Presented data are the mean or median values for each region or country.

5. Expected Growth in Sales Revenue CFOs in Asia are optimistic in their revenue outlook, with China, Japan, and India anticipating strong growth Sep 2017 Outlook Global Trends March 2018 Outlook Revenue Revenue CFOs across major Asian economies are optimistic about revenue outlook • CFOs across India, Japan, and China are projecting strong yet similar growth outlook for Q1-18. • Singapore is also expected to see strong revenue growth, even if the outlook is not as strong as the other Asian economies. Asian revenue growth expectations have risen sharply for a second consecutive quarter • CFOs in Latin America and Asia seem to be similarly bullish in their revenue outlook. • CFOs in Africa and Europe are more conservative, projecting a lower growth outlook than the previous quarter. Notes: Presented data are the mean or median values for each region or country.

6. Capital Spending Plans CFOs in Asia have a renewed emphasis on capital spending in the next 12 months Sep 2017 Outlook Global Trends March 2018 Outlook • Capital Spending • Capital Spending Capital spend outlook is strong for the major Asian economies • CFOs in Japan are among the most bullish in their capital spend outlook. • Indian CFOs continue to project a strong outlook for the next 12 months. Capital spending outlook rises across regions • CFOs in Africa and the US see the largest growth in capital spending outlook relative to the previous quarter. • Asian CFOs have the strongest outlook on capital spending for a 3rd consecutive quarter. • Growth in Asia attributable to stronger outlook among Chinese and Japanese CFOs. Notes: Presented data are the mean or median values for each region or country.

7. Expected Change in Earnings CFOs in Asia remain conservative on earnings growth outlook for the third consecutive quarter Sep 2017 Outlook Global Trends March 2018 Outlook • Earnings • Earnings While Asia expect only a modest increase, other regions see differing trends • Europe and the US see notable gains vis-à-vis the previous quarter. • Africa see a notable decline, while Latin America anticipates a marginal decline. Asian earnings growth outlook bolstered by positive sentiment among CFOs across several Asian economies • CFOs in Japan, Singapore, and China all reported higher earnings growth outlook relative to the previous quarter. Notes: Presented data are the mean or median values for each region or country.

8. Fulltime Employment Outlook CFOs in Asia and Latin America expect stronger headcount expansion in the next 12 months Sep 2017 Outlook Global Trends March 2018 Outlook • # FT Employees • # FT Employees Asian growth in outlook is attributable to strong positive sentiment among Chinese CFOs • While all major Asian economies are expecting headcount expansion in the next 12 months, Chinese CFOs are more bullish now than they were in the previous quarter. Except for Africa, employment growth outlook is similar across regions • African CFOs expect strong employment growth for a second consecutive quarter, rebounding from very weak hiring. • Latin American and Asian CFOs are expecting similar growth to occur in the next 12 months. • US CFOs are expecting growth to be consistent with past outlook. Notes: Presented data are the mean value for each region or country | #FT=Number of Fulltime Employees

9. Expected Wage and Salary Increases Asian CFOs expect more rapid wage and salary growth, even as CFOs in other regions remain consistent with or are more bearish on wages relative to the previous quarter Sep 2017 Outlook Global Trends March 2018 Outlook • Wages & Salaries • Wages & Salaries Asian CFOs across the board are more optimistic on wage outlook • CFOs in China are more bullish, while CFOs in Japan are slightly more bullish on the wage outlook, relative to last quarter • CFOs in India expect wage growth outlook to be one of the highest among Asian economies Wage growth outlook differs by region • Wage growth outlook continues to be the highest among African CFOs, while Asia and Latin America are similar in their outlook • Western Europe and the US saw flat/marginal decline in wage growth outlook, while African growth outlook remains high albeit lower than last quarter Notes: Presented data are the mean or median values for each region or country.

10. Fintech/Blockchain Do you have a good understanding of the following technologies?

11. Fintech/Blockchain Do you have a good understanding of the following technologies?

12. Fintech/Blockchain Which of the following innovations will affect your company and its operations in the next 5 years?

13. Fintech/Blockchain Which of the following innovations will affect your company and its operations in the next 5 years?

14. Fintech/Blockchain Impact on Labor Outcome Do you anticipate that your company will reduce the number of employees in the finance function because of innovations in financial technology?

15. Attractive After-tax Returns on US Investment The U.S. reduced its corporate income tax rate from 35% to 21%. Does the reduced U.S. tax rate make it more or less attractive for your company to do business in the U.S.?

16. Corruption as a Risk Factor How big a risk factor is business corruption (fraud, bribery, other ethical violations) in the country where you are located?

17. Major Effect of Corruption To the extent that corruption exists, what would you say are its major effects?

18. Return on Assets (ROA) Return on assets in 2018 expected to rise for all regions except Asia While Asian CFOs saw the highest RoA for 2017, flat expectations for 2018 Asian RoA in 2018 • Regional ROAs for all regions except Asia expected to rise by 2-3 percentage points • CFOs in many major Asian countries expect ROA to be higher in 2018 relative to 2017 • CFOs in India expect the highest ROA in 2018 relative to other major Asian countries

19. Asian Business Outlook Part of the Global Business Outlook A joint survey effort betweenDuke University and CFO Magazine