Anxious optimism in a complex world

29 Pages·2017·2.36 MB·English

2018 Global Investor Survey
Anxious optimism in
a complex world
www.pwc.com/investorsurvey
2 | PwC’s 2018 Global Investor Survey
Introduction
For the third year, we have set out to get insight into the thinking and
strategic direction of chief executive officers (CEOs) around the world
and how their views compare with the perceptions and expectations
of investment professionals. We asked the two groups for their opinions
on growth prospects in a disruptive environment, the effects of
globalisation and the threats that companies face today. We also sought
their views on managing and maintaining stakeholder trust and the
challenges and opportunities presented by technology and automation.
Their responses, as in past years’ surveys, unsurprisingly showed a
variety of perspectives, along with many similarities. We hope these
findings will help to improve the quality of engagement – and perhaps
understanding – between companies and the investment community.
Note: Throughout this report we use the terms ‘investment professionals’ and ‘investors’ interchangeably to describe the respondents
to our survey. This group of capital market participants includes portfolio managers, equity analysts, credit ratings agencies,
governance and stewardship professionals, private equity investors and individual investors. They cover a range of industries and focus
on the equity markets, fixed income markets or both.
3 | PwC’s 2018 Global Investor Survey
Contents
4 10 12 15 21 24

Global growth: Threats: Global vs local: Challenges: Trust: A message from
Great expectations What CEOs worry Navigating a Living in an age of It’s all about the people Richard Sexton,
about is not always the fractured world disruption Vice Chairman, PwC
same for investment International Limited
professionals
24 Survey
methodology
26 Acknowledgements and
thanks
27 Contacts
4 | PwC’s 2018 Global Investor Survey
Global growth:
Great expectations
Investment professionals continue to show optimism in the global
economy, at least over the next 12 months. And that growth translates
into positive expectations for companies in the near term. However,
investment professionals aren’t so positive about the longer term, with
their growth expectations for companies over the next three years
declining from last year’s survey.
5 | PwC’s 2018 Global Investor Survey
Investors and CEOs are more confident about
the global outlook than they were last year
Q Do you believe global economic growth will improve, stay the same, or decline over the next 12 months?
Investors CEOs
“The economy is improving. The biggest risk
57%
54%
53% I see is a China slowdown.”
49%
45% Investment professional, US
41%
35% 34% 36%
33%
29%
27%
22% 23%
19%
17%
11%
5%
2016 2017 2018 2016 2017 2018
Improve Stay the same Decline
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Investors are less confident about growth than
CEOs, and their confidence in the long term
has declined since last year
Q How confident are you about the prospects for revenue growth for the companies you invest in or follow (for
investors) or for your organisation (for CEOs) over the next 12 months and over the next three years?
i Chart shows percentage of respondents answering ‘very confident’.
Over the next 12 months Over the next 3 years
51%
49%
45%
42%
38%
35%
31%
30%
23% 23%
20%
13%
2016 2017 2018 2016 2017 2018
Investors CEOs
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Investors and CEOs both prioritise organic growth
Q Which of the following activities, if any, do you think companies should be planning (for investors) or are you planning (for CEOs) in the next 12
months in order to drive corporate growth or profitability?
i Investors who responded ‘Other’ mentioned technology and innovation as important for driving growth and profitability.
79%
70%
62%
49%
47%
42%
39% 39%
33%
31%
25%
21%
16%
12%
10%
7%
Organic growth Cost reduction New strategic New M&A Collaborate with Sell a business Outsourcing Other
alliance or joint entrepreneurs or exit a market
venture or start ups
Investors CEOs
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The US remains in Investors CEOs
the top spot for global US 78% 46% US Countries important for growth in 2017
China 65% 33% China Investors’ top five countries are the
investment, followed
same as last year
Germany 32% 20% Germany
by China
UK 21% 15% UK
India 12% 9% India
Q Which three countries do you consider most important US China
for the overall growth prospects for the companies you
Japan 10% 8% Japan 85% 62%
invest in or follow (for investors) or your organisation’s
growth prospects (for CEOs) over the next 12 months? Canada 6% 7% France
France 5% 7% Brazil
CEOs were asked not to select the country in which they are based. Australia 5% 6% Canada Germany UK
32% 32%
Brazil 5% 5% Russia
Mexico 4% 5% Australia
Spain 3% 5% Hong Kong
India
South Africa 3% 4% Mexico 10%
Italy 2% 4% Korea
Indonesia 2% 4% UAE
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Regardless of where investors are based, the US and China are top
choices for global investment
Q Which three countries do you consider most important for the overall growth prospects for the companies you invest in or follow (for investors) or your organisation’s growth
prospects (for CEOs) over the next 12 months?
i Ranking for respondents based in the region.
North America Asia-Pacific Western Europe
US 92% China 80% US 72%
China 72% US 78% China 58%
Germany 28% India 25% Germany 47%
“I don’t think Brexit will destabilise
UK 20% Japan 22% UK 29%
growth, but the next few years will be
Canada 18% Australia 21% France 11% hard for the UK.”
Investment professional, UK
Latin America Africa
US 75% US 63%
China 38% China 63%
Brazil 38% South Africa 43%
Mexico 25% Germany 29%
Argentina 25% UK 23%
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Threats:
What CEOs worry about is not always the same for
investment professionals
Technological advancements are in the news on a
regular basis, so it is no surprise that investment
professionals’ and CEOs’ concerns about the speed
of technological change and cyber threats have
increased from last year’s survey. But investment
professionals and CEOs differ quite significantly in
their views of whether over-regulation, availability
of key skills, terrorism and an increasing tax burden
will affect company growth prospects; although these
are keeping CEOs up at night, they don’t seem to be as
concerning to investment professionals.