By: DigitalCFO Asia | 1st March 2021
2020 was a tough year for Chief Financial Officers (CFOs), from cutting back on expenditure, to raising millions to stabilise their companies’ finances, and swiftly adopting strategies to respond to the global pandemic and the inevitable economic downturn.
With Pfizer/BioTech, Moderna & Sinovac rolling out COVID-19 vaccines in 2021, CFOs and executives can expect vaccination to boost economic activity, as people all around the world start to return to their workplaces. Several countries such as the UK, Canada, and the US are at the top of the list among countries who reserved COVID-19 vaccines
5 Things to keep an eye on
Executives can expect their companies’ revenue to rise by an average of 6.9% in 2021, as economic activity starts to pick up. This is up from a 0.3% increase forecast for 2020, according to a recent survey by Duke University’s Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta.
Corporate tax rate in the United States of America has been proposed to be raised to 28% up from the current 21% charged, by fresh President-elect Joe Biden. The new administration can shape tax policy even without a majority in Congress.
Finance chiefs will keep an eye on potential changes to the US’s trade policies in relation to the ongoing trade war with China, and the European Union (EU) and other countries whose goods currently incur tariffs. Companies will also be paying attention to the new trade agreement between the UK and the EU, which was agreed in late December of 2020 after many years of negotiations.
Mergers and Acquisitions, Listings
Companies with excess cash reserves are expected to be on the lookout for potential investment targets, according to Robert Brown, chief executive of the North America business at Lincoln International, an investment bank. Private businesses also could take advantage of high stock valuations to plan an initial public offering, a direct listing or a transaction with a special-purpose acquisition vehicle.
A sizable number of US employees will still be expected to work from home for a part of 2021 and seek flexible-work options in the future as the COVID-19 vaccine gets implemented. Executives should take a closer look at their companies’ real-estate footprint and assess the pros and cons of moving offices. They will review potential investments to alter the layout of their offices and see whether increased levels of productivity—an outcome of widespread work from home in 2020—are here to stay.