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maltatoday, SUNDAY, 5 FEBRUARY 2017 Events 47 Economy to stand out in unpredictable 2017 MALTA'S economy has the potential to emerge even stronger in 2017 despite a high level of uncertainty in the global and European economies, HSBC Malta CEO Andrew Beane said while speaking at The Economist's The World in 2017 Gala Dinner Malta. "There's something quite fantastic about the smallest country in EU hold- ing the Presidency – perhaps the most important moment in the EU's develop- ment itself – and doing so at a time when being small, adaptable and entrepreneur- ial is an opportunity," he said during an on-stage discussion with Daniel Frank- lin, executive editor of The Economist. Those opportunities, according to Mr Beane, lay in Malta's strengths which he signalled out as its heritage, a highly-ed- ucated and bilingual workforce, having one of the top 10 ports in the Mediter- ranean, its location just six miles from Europe's main shipping lane to China, and thriving sectors of high-tech and fi- nancial services. "In particular, if we look to the emerg- ing markets which continue to grow twice as fast as the developed world, and we focus on those key trade flows, we fo- cus on relationships, we use the talents in the room this evening, we will be back next year, proud of what's taken place here in Malta," he added. He also remarked that continued di- versification within the economy is im- portant for growth to remain sustain- able, avoiding the risks associated with overdependence on a small number of sectors. HSBC Bank Malta was the Lead Spon- sor of what has become the season-opener for Malta's increasingly busy conference and meeting calendar, bringing luminar- ies to share their candid, sometimes bold – and always entertaining – predictions for the year ahead. The headline appear- ances this time were made by Pierluigi Collina, the world's most famous football referee, and the Prime Minister of Malta Joseph Muscat. PKF welcomes additional new firm in China PKF International welcomed in 2017 a new member – Zhongxingcai Guanghua (ZG) Certified Public Accountants LLP to its global network of independent firms. Several representatives attended the signing, which took place in Beijing on 22nd December 2016, including Mr Gengchun Yao, Chairman at ZG; rep- resentatives from the Chinese Institute of Certified Public Accountants; Beijing Institute of Certified Public Account- ants; Hebei Institute of Certificate Pub- lic accountants; the Chairman of China United Guanghua Holding Group; and John Sim, Amy Hui and Wingsee AuYe- ung from PKF. With PKF adding ZG to its global fam- ily, it now boasts over 400 offices oper- ating in more than 150 countries across five regions. This new venture provides existing ZG clients access to PKF's global network for international expansion and existing PKF clients with full coverage across China to support their expansion plans. Based in Beijing, ZG has good geograph- ical coverage with branches in 32 cities, and is among the top 20 accounting firms in China. It has established strategic alli- ances with many well-known investment banks, brokerages and fund companies and offers its customers a variety of ser- vices including Asset Assessment Ser- vice, Auditing & Advisory Services. Judi- cial Expertise, and Tax Advisory Service. The accountancy firm is also becoming known as an operational platform for se- curitisation of domestic capital. Mr Gengchun Yao, Chairman at ZG, ex- plained: "The partners are very excited to join the PKF family. This is an important strategic move to show the growing sup- port to our clients as they expand inter- nationally." PKF's global family of legally independ- ent firms specialise in providing high quality audit, accounting, tax, and busi- ness advisory solutions to international and domestic organisations in many sec- tors. John Sim, CEO of PKF, explained: "Find- ing the right audit firm in China is an im- portant part of our strategy to becoming the leading global brand for independent accounting firms. It not only helps ZG put themselves on the global map but also gives PKF the coverage we need in China. We look forward to getting to know them better and to helping their clients imple- ment the 'One Belt One Road' strategy of the Chinese Government across the PKF network." Sebastian Wohldorf, Chairman of PKF International, concluded: "ZG joining PKF is a win-win for both parties. ZG is one of the fastest growing accountancy firms in China, so we are delighted they have decided to join our family. They share the PKF values of passion, team- work, clarity, quality and integrity so I'm sure it will be a great step forward for both parties. Malta is well placed to capitalise upon opportunities in an uncertain world: HSBC CEO Andrew Beane Strong investment appetite in Europe despite instability DESPITE current geopolitical and financial market volatility, investment plans into Europe over the next three years are strong, with 56% of global investors planning to grow their pres- ence in Europe, according to the EY 2017 Euro- pean attractiveness survey – Plan B for Brexit. This contrasts with the findings from the EY survey conducted last May, which found that only 36% of European investors had a positive investment outlook for Europe. INVESTORS cited instability on the continent as their primary concern in respect to future investment plans. However, Europe's talent, in- novation capacity and large, integrated market and production system are still valued by global investors. Of the 254 global investors surveyed, high volatility in currencies, commodities and capital markets was identified as the biggest risk to investment decisions in Europe (37%), while economic and political instability within the European Union (EU), excluding Brexit, (32%) and the impact of Brexit (28%) were iden- tified as the second and third biggest risks re- spectively. ANDY Baldwin, EY Area Managing Partner – Europe, Middle East, India and Africa, says: "IT is encouraging that the investors we are tracking continue to have strong investment appetite in Europe despite the instability and mixed geopolitical environment. However, in- vestor patience is finite. Europe's historical in- vestor appeal was built on certainty and PREDICTABILITY. Europe is in danger of de- veloping an emerging market 'geopolitical risk profile' without commensurate returns. For the foreseeable future, pure economic factors will vie alongside political considerations in influ- encing final investment decisions." HEIGHTENED geographic and political risks across Europe and the UK are prompting 1 in 10 companies with a presence in Europe to review their geographical footprint. However, the survey finds that the UK's EU referendum result is a far bigger concern for foreign com- panies established in the UK (33%), compared with those that are not (15%). Companies not established in the UK cite geopolitical and wider EU instability (31%), coupled with the slowdown in trade flows (30%) as more urgent concerns. FOURTEEN percent of foreign investors with a presence in the UK plan to change or relocate some of their European operations in the next three years should the UK leave the European single market. Overall, 11% plan to modify their UK presence in Europe following Brexit. GERMANY was identified as the preferred des- tination for those investors moving out of the UK (54%), followed by the Netherlands (33%) and France (8%)1. MORE than 70% of foreign investors say they have already felt some impact following the UK's referendum on EU membership. These in- vestors have seen an impact in at least one area of their business operations in Europe and have cited operating margins, cost of purchase and sales, in particular. Companies with a strong presence in the UK were hit the hardest, with 31% reporting an increase in purchase costs and the same percentage identifying operating margin pressures. ASSESSING and managing the immediate im- pact of Brexit on costs (largely import-driven) and supply chain are fundamental concerns for respondents, with 32% and 27% respectively highlighting these as urgent agenda items. De- spite concerns over the geopolitical environ- ment, only 4% of respondents report being well- prepared for the uncertainty arising from new risks and a changing regulatory environment. BALDWIN concludes: "The financial impact of Brexit is not confined to the UK. The sur- vey shows that 70% of European businesses we surveyed have been impacted in some way. European businesses and investors need cer- tainty and want clarity on the future trading relationship between the UK and the EU27. In the meantime, we will likely see a pick-up in businesses reconfiguring supply chains and distribution arrangements to mitigate curren- cy volatility and cost pressures. Flexibility and agility will be key." John Sim, CEO of PKF welcoming Gengchun Yao, Chairman at ZG to the PKF family