Corporate treasurers are bullish about 2010
Worries focus on state of the economy, not on the balance sheet
Watch EuroFinance’s Editorial Director summarising the key findings on CNBC.
The most important implication of this is how the treasurers’ agenda is now changing: immediately after the collapse of Lehman, “counterparty risk” was corporate treasurers’ single biggest concern. This worry has certainly not gone away, but it has slipped down from the ‘number one’ worry to second place, with 55% of treasurers globally worried about counterparty risk compared with 70% at the time of our last quarterly survey.
This means that the fragile state of the economy is now at the head of treasurers’ worries, moving up the list from second place to first, cited by 65% of respondents, up from 56% last time.
The ability to forecast cash flow accurately at a time of continuing uncertainty is the treasurers’ third-greatest concern.
“We can take some encouragement from this research. It shows that tough times are continuing, but that companies are positioning themselves for a resumption of growth rather than worrying about whether gaping holes are about to appear in their balance sheets,” says Andrew Sawers, Editorial Director of EuroFinance.
Criticism of banks is still widespread, however, as one-third of treasurers around the globe say that banks are still not delivering acceptable lending terms to healthy companies. This is a worrying sign that the crisis is not yet behind us, but the figure is less than half the 71% level recorded in our previous quarterly survey.
There are some other, tentative, positive signs: while some 23% of treasurers say that the amount of spare cash in their business is in decline, a greater proportion, 35%, say that it is increasing (the balance, 42%, saying it’s about the same level).
Moreover, when asked what their plans are for any spare cash, 44% say that they will be reinvesting in the business – significantly more than the 25% who will be paying off debt or the 13% who will simply boost their cash reserves.
Treasurers think, on balance, that the US Federal Reserves will be the first major central bank to raise interest rates in 2010 with 38% expecting US rates to come off the floor this year. The European Central Bank is regarded as second-most likely to raise rates (27%) and the Bank of England third (just 7%). But more than a quarter of treasurers (28%) do not believe that any of these three will raise rates this year.
This extensive survey – the most in-depth survey ever conducted by EuroFinance – unveils findings about treasurers’ views of the dollar, their policy with regard to paying invoices and collecting from customers, their concerns about regulation and their ability to forecast cash flows accurately.
Click here for the full report
“Corporate treasurers have a front row seat on the state of corporate health worldwide,” Sawers adds. “Our International Cash and Treasury management Conference in Miami, Florida in May will provide an opportunity for treasurers to discuss these global issues and to exchange views on how the business and regulatory environment is changing.”
Watch EuroFinance’s Editorial Director summarising the key findings on CNBC.
10th February 2010
The financial crisis isn’t over yet – more bad news is expected to come – but corporate treasurers around the world are still feeling quite bullish about 2010.
This is just one of many findings about the health of the global business environment from the latest Quarterly Business Confidence Survey, researched and published by EuroFinance.Watch EuroFinance’s Editorial Director summarising the key findings on CNBC.
The most important implication of this is how the treasurers’ agenda is now changing: immediately after the collapse of Lehman, “counterparty risk” was corporate treasurers’ single biggest concern. This worry has certainly not gone away, but it has slipped down from the ‘number one’ worry to second place, with 55% of treasurers globally worried about counterparty risk compared with 70% at the time of our last quarterly survey.
This means that the fragile state of the economy is now at the head of treasurers’ worries, moving up the list from second place to first, cited by 65% of respondents, up from 56% last time.
The ability to forecast cash flow accurately at a time of continuing uncertainty is the treasurers’ third-greatest concern.
“We can take some encouragement from this research. It shows that tough times are continuing, but that companies are positioning themselves for a resumption of growth rather than worrying about whether gaping holes are about to appear in their balance sheets,” says Andrew Sawers, Editorial Director of EuroFinance.
Criticism of banks is still widespread, however, as one-third of treasurers around the globe say that banks are still not delivering acceptable lending terms to healthy companies. This is a worrying sign that the crisis is not yet behind us, but the figure is less than half the 71% level recorded in our previous quarterly survey.
There are some other, tentative, positive signs: while some 23% of treasurers say that the amount of spare cash in their business is in decline, a greater proportion, 35%, say that it is increasing (the balance, 42%, saying it’s about the same level).
Moreover, when asked what their plans are for any spare cash, 44% say that they will be reinvesting in the business – significantly more than the 25% who will be paying off debt or the 13% who will simply boost their cash reserves.
Treasurers think, on balance, that the US Federal Reserves will be the first major central bank to raise interest rates in 2010 with 38% expecting US rates to come off the floor this year. The European Central Bank is regarded as second-most likely to raise rates (27%) and the Bank of England third (just 7%). But more than a quarter of treasurers (28%) do not believe that any of these three will raise rates this year.
This extensive survey – the most in-depth survey ever conducted by EuroFinance – unveils findings about treasurers’ views of the dollar, their policy with regard to paying invoices and collecting from customers, their concerns about regulation and their ability to forecast cash flows accurately.
Click here for the full report
“Corporate treasurers have a front row seat on the state of corporate health worldwide,” Sawers adds. “Our International Cash and Treasury management Conference in Miami, Florida in May will provide an opportunity for treasurers to discuss these global issues and to exchange views on how the business and regulatory environment is changing.”
Watch EuroFinance’s Editorial Director summarising the key findings on CNBC.
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