Top executives need to focus this year on opportunities in emerging markets, crossborder M&A and investing in countering climate change in order to stay ahead of economic trends, Citigroup said in a report.

Detailing its 10 biggest issues for the year, Citigroup said growth in countries such as Singapore, India and China, and the growing appetites of Middle-Eastern sovereign funds (SWFs) for overseas acquisitions remain key for dealmakers.

Citigroup, which agreed in November to sell a 4.9 per cent stake to Abu Dhabi for £3.8 billion, is among other banks and their corporate clients bracing for a possible recession this year after years of record corporate finance and M&A.

"With SWFs projected to grow to $7.5-10 trillion by 2012, they represent a potentially important source of capital for companies seeking alternative sources of financing and can help support new investment or strategic acquisitions," Citigroup's Financial Strategy group said.

Not all would agree with Citigroup's view that SWFs are a benign source of investment and growth.

French President Nicolas Sarkozy vowed to protect French businesses from such funds and private speculators and urged state bank Caisse des Depots et Consignations to help France defend what he described as its industrial interests.

Emerging market companies are also seeing their credit ratings improve, allowing them to borrow more cheaply to fund deals, said the Citi report, adding that overall their cost of capital remains a bit higher than western rivals'.

Western executives can also counter slowing economies by buying targets in emerging markets such as India and China, as well as regions such as Eastern Europe and Turkey as M&A becomes an increasingly crossborder activity, said Citi.

However, bearish credit markets, pension deficits, the falling US dollar and the rising price of oil and other commodities create uncertainty that companies need to find ways to overcome in the short term, said Citi.

And the bank added that the issue of climate change will also influence developments this year, and that even companies that are not forced to do so by regulation "should be proactive" in preparing to adapt to it.

Addressing climate change will help drive positive perception, attract investors, boost financial performance through long-term cost savings and even enhance companies' value as M&A targets, Citigroup's report said.