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SMEs likely to expand overseas operations [26-01-2011]  
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With a positive economic outlook over the next six months, more local small and medium enterprises (SMEs) are expected to expand their business activities globally.

The latest HSBC Small Business Confidence Monitor survey showed that currently, 42% of SMEs in Malaysia were already involved in cross-border trade or international business activities, a 7% increase from the second half of 2010.

Half of the international SMEs in Malaysia would increase their overseas business activities and 15% of domestic SMEs had plans to go international within two years, the bi-annual survey revealed.

Research findings also showed the number of SMEs worldwide conducting international business activities was expected to expand from 29% to 40% by 2013.

Commenting on the local SMEs expansion into global markets at a press briefing, HSBC Bank Malaysia Bhd managing director for commercial banking David Morton said: “This marks a significant shift in the local SME landscape where they see the opportunities beyond our borders. However, we do see some hesitation among local SMEs to explore the international arena.

“This is probably due to concerns with regards to complexity of international markets, lack of knowledge and availability of financing. This is where HSBC can provide support in terms of local insights by leveraging on our global connectivity.”

He added that the upward trend of the confidence levels was encouraging businesses in Malaysia to continue to invest in capital expenditure and increase their manpower to support their expansion plans.

The survey, which was conducted from October to December 2010, revealed that 31% (up 2% from second quarter of last year) of local businesses expected the country’s gross domestic product to increase. The previous survey was held from April to June last year.

As the local SMEs continue to hold an optimistic point of view, the survey added, they would continue to invest in capital expenditure and would plan to recruit as they expand. Business confidence level in Malaysia was 122 and was almost at par with Asia’s index of 125.

The bi-annual HSBC Small Business Confidence Monitor gauges the SMEs outlook on local economic growth, capital investment plans and recruitment.

The latest wave of survey was the largest international survey of its kind covering over 6,300 SMEs across 21 markets in Asia, Africa, Middle East, Europe, North America and Latin America.

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