Asian chief financial officers are looking close to home to expand their companies and shunning the West, according to a new survey.

Asian chief financial officers are looking close to home to expand their companies and shunning the West, according to an inaugural survey of 465 Asian CFOs conducted by Bank of America Merrill Lynch.

The BoA Merrill Lynch report, which asked CFOs from Australia, China, India, Hong Kong, Japan, Korea and Singapore their views on a variety of topics from mergers and acquisitions opportunities to the availability of financing, shed light on the cautiously optimistic stance of companies in the region.

The credit crunch plaguing the West is not concerning the CFOs of Asia – only a tenth of respondents saw credit availability fall last year. M&A activity is set to rise, with a third of respondents hunting for acquisition targets.

China was the biggest focus for M&A, with nearly half of Chinese CFOs eyeing M&A in their own backyard, and 42 per cent of Singaporeans looking for tie-ups in China. The biggest trend was domestic M&A, a half of those considering M&A were considering M&A at home.

This could be linked to the greater availability of credit from local lenders to local firms, said said Matthew Koder, head of global corporate and investment banking, Asia-Pacific, who presented the report at a Hong Kong-based journalist briefing yesterday. “From a long-term perspective, now is the time to procure finance,” he said. Australia and China CFOs saw the greatest increase in the availability of financing, while Hong Kongers saw the least, posssibly due to Hong Kong’s greater exposure to Western credit problems.

Expansion within their own country was most cited by CFOs as the reason for the uses for additional financing.

Asia CFOs overwhelmingly cited growth as the rationale for M&A by a factor of almost two to one over other reasons. The exception was South Korea, where a high proportion of CFOs said eliminating competition was the biggest incentive for tie-ups.

The CFOs are relatively positive about the current state of Asia's economy, despite a slowdown in China and India and the impact from the Western world. CFOs gave a score of 5.9 (with 1 being extremely weak and 10 being extremely strong) compared with an average score of 4.7 for the world economy. 

There were significant variations between countries however, as Asia is far from homogenous in its economic growth predictions. Japan garnered the weakest average score of 4.1, reflecting its inability to shake off the economic stagnation that resulted from its own asset bubble bursting in the 1990s. 

China, meanwhile, was the strongest of the economies surveyed, with a score of 7.5. Australia was 6.6, Singapore 6.4, India 6.1, Hong Kong 6.1 and South Korea 6.0. 

On one point the 465 CFOs nearly all agreed - the potential asset bubble in Asia's property market. A staggering 96 per cent of CFOs cited the overheated property markets in Hong Kong as a concern, while 86 per cent see Singapore property as worrisome. This fell to just over three quarters in South Korea and 73 per cent in China. 

However their two greatest concerns were the Eurozone debt crisis, 7.7, and the US budget defect, 7.4, showing caution in the macroeconomic global climate. While they have faith in their own businesses, their prognosis for the coming year was slightly bearish, with just 32 expecting their own economy to expand in 2012 and a similar number expecting contraction. 

“CFOs in Asia predict regional and domestic growth for themselves and a rather cautious view of the West. However all recognised that success in Asia is contingent upon the trajectory of the West’s ailments. Will the Year of the Dragon prove that Asia is immune to the troubles of the West?” said Koder.