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As the world transitions to a new environment, leading CEOs are resetting their risk radars and reframing their investment strategy for growth.
According to the EY CEO Outlook Survey 2022, CEOs in Malaysia and Southeast Asia (SEA) are prioritizing the acceleration of investments and mergers and acquisitions (M&A) to boost capabilities in technology, talent and innovation as well as environmental, social and governance (ESG) and sustainability strategies in their pursuit for growth.
SEA survey highlights
1. M&A continues to be a vital investment tool
In parallel with the strategies of global CEOs, over half (57%) of SEA CEOs are expecting to actively pursue acquisitions in the next 12 months.
2. CEOs balance strategic investment opportunities with geopolitical and supply chain risks
In view of the uncertain geopolitical environment, over three-quarters (76%) of SEA CEOs indicate they are planning to adjust their supply chain to help reduce costs and minimize risks to prepare for future disruptions.
3. CEOs prioritize ESG as a key driver of value
The pivot toward sustainable transformation among CEOs is becoming a permanent shift in our new normal. While the return on invested capital is ranked highest (76%) among the drivers of value over the next few years, nearly three-quarters of SEA CEOs (74%) identify ESG factors as important, when it comes to strategic decision-making.
What are Malaysian CEOs thinking?
- Malaysian CEOs are concerned about the inflationary risks arising from supply chain disruptions
As the COVID-19 pandemic and geopolitical tensions continue to evolve, nine out of ten (91%) Malaysian CEOs are concerned about inflationary pressures in view of increasing labor costs and the prices of raw materials and commodities.
- Over half of the CEOs are actively pursuing M&A in the next 12 months
In the next 12 months, the prioritized M&A deals include those to acquire technology, talent, new production capabilities or innovation startups (27%) and strengthen ESG performance or a sustainable footprint (20%).
M&A outlook: Malaysia
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84% Increase in cross-border deal making |
67% Private equity to be a major acquirer of assets |
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60% Increase in hostile and competitive bidding |
60% Increase in cross-sector M&A |
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60% More regulatory or governmental interventions in M&A |
50% Higher number of insolvencies |
- Gaining competitive advantage by becoming a sustainability leader
Over two-thirds of the Malaysian CEOs (67%) indicated that by becoming a sustainability leader, they can gain competitive advantage, lower costs of capital and build a strong foundation for their company’s long-term strategy.
While nearly two-thirds (64%) of Malaysian CEOs ranked ESG factors as the driver for company value, over a third (37%) of the CEOs recognized the importance of ESG ratings to attract investors.
In adapting to the new normal, it is timely for CEOs to reset their risk radar and reframe their investment strategy for growth in a new environment.