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Nov 14

Asian companies build up war chest

Posted by nicklord in DealsCash


A new report by Moody's out today shows that companies in Asia have amassed $230 billion in cash over the past 18 months. According to the report, this amount will be used for expansion, liquidity and acquisitions.

While the total amount is less than the $1.2 trillion built up by US corporates, on a per company basis, Asian companies are hoarding twice as much cash as their US peers. And this sample does not include companies from Japan and Australia who have been doubly blessed by the rapid strengthening of both countries' currencies.

Nov 10

Taiwan shows growth ahead

Posted by nicklord in RiskCash



Six months ago I wrote a piece for this site saying why Taiwanese economic data is highly predictive of how the global economy is set to perform. The premise was that Taiwan is plugged into global trading patterns to such an extent that significant changes in its economic data tend to foreshadow changes to the global outlook by two to three months.
Six months ago, I wrote that a slow down in domestic industrial production could herald a slow down in the global economy. I was right. The summer months did see a global economic skid, due to worries over a double dip recession and government austerity measures.
The latest numbers from Taiwan, however, now suggest brighter times ahead. On Monday the country released its October export data figures, which make pleasant reading. Overall, exports in October were up 21.9 percent over October 2009. This handily beat consensus forecasts of a growth of 15.8 percent. Moreover, the rate of growth of exports increased rapidly, from 17.5 percent in September.
The two areas that showed the sharpest growth were electronics and exports to the US. The country exported electronics worth some $7.25 billion, a growth of nearly 25 percent over the previous October. That figure is also a record in dollar amounts.
Exports to the US reached $2.89 billion, a 35 percent increase on the previous October. The US continues to be Taiwan's fastest growing export market, even if in terms of volume exports to China are larger.
Much of this growth can be explained by the ongoing demand for Apple products in the US. Many of the components that go into Apple gadgets are manufactured in Taiwan. But it does not explain it all.
Given that October is traditionally the time of year when retailers start stacking the shelves for the holiday season, this sharp increase in exports from Taiwan suggests that US retailers are expecting a very strong winter season. That should bring good cheer to all.

Nov 08

Change for payments

Posted by nicklord in Cash



The business of payments has proved itself to be resilient over the course of the global financial crisis with almost none of the chaos that was seen in the credit markets. Payments have also proved to be a high revenue generator for banks and other service providers. According to last month's McKinsey report on the global payments industry, in 2008, the global payments industry generated over $1 trillion of revenue.

Nov 03

Metlife: the highs and lows of joining SWIFT

Posted by nicklord in DealsCash


Since SWIFT opened its doors to companies, more than 700 have under gone the process and become members of what was a banks-only club. Metlife is one of the more recent converts and is evangelical in the benefits of becoming a member.

"We joined SWIFT as it makes the whole payments process much easier and we can lower our costs," says Adam Brack, treasury consultant at Metlife in who ran the project.

Nov 01

Trade being punished by Basel III

Posted by nicklord in tradeCash


Banks have launched into a chorus of condemnation for the way that the new Basel III capital accords are going to affect their trade finance business. The ultimate loser, they say, will be companies around the world who are looking to export their way back to growth. For once, the banks might be right.

Under the provisional rules as they are now set out, trade finance assets will have to be 100 percent risk weighted, meaning for every dollar that is lent in short term trade finance, banks will have to keep a dollar on their balance sheets.

Oct 26

Corporate mobile banking does have a future

Posted by nicklord in Untagged 


Contrary to received wisdom, there is apparently strong demand by companies for mobile banking and payments services.

A recent research exercise undertaken by Fundtech and Aite Group found 65 percent of corporate treasurers were interested in adopting mobile services, with 49 percent of treasurers saying they would actually be willing to pay for these services.

Oct 25

Postcard from Amsterdam

Posted by nicklord in Untagged 



I am attending SIBOS this week, the annual conference of banks and brokerages organized by SWIFT (the Society for Worldwide Interbank Financial Transactions). There are 8300 participants from 155 countries, the vast majority of whom are banks. There are few venues better for taking the pulse of the world of finance.

Oct 21

Gloomy outlook for small businesses

Posted by nicklord in Risk


Small businesses in the UK have a somber outlook for business prospects in the near future, according to figures released by the Federation of Small Businesses (FSB).

At the end of the third quarter the net balance of businesses that were seeing some improvement in their outlook over those that were seeing deterioration stood at 0.5 percent. This is down from 4.2 percent at the end of the second quarter and from 16.2 percent at the end of the first quarter.

Oct 18

Small business gets boost from British banks

Posted by nicklord in Deals


At the end of last week the British Banks Association set out 17 commitments to repair the damaged relationship between UK banks and their SME customers. Under three broad categories - improving customer relations, ensuring better access to finance and promoting better understanding - the commitments are equal part waffle and concrete. But they nevertheless show that banks in the UK are aware of the damage that they are doing themselves by restricting credit and cutting off the recovery.

The concrete commitments that look as if they will make a difference include:
·         publishing lending principles which clearly set out the minimum standards medium-sized and larger businesses can expect when asking banks for loans and other services
·         establishing a transparent appeals processes for when loan applications are declined, with processes independently monitored by a senior independent reviewer
·         Initiating a pre re-financing dialogue 12 months ahead of any term loan coming to an end, which will assess what needs to be in place ahead of loan expiry to maximize the prospect of successful re-financing.
·         establishing a new £1.5 billion Business Growth Fund to provide equity capital for viable businesses
·         Funding and publishing a regular independent survey, beginning in early 2011, to a methodology agreed with the government and business groups, so there is an agreed and authoritative set of data on business finance demand and lending supply.

Oct 12

The undervalued Yuan myth

Posted by nicklord in FX


CFOs listening to the bluster coming out of Washington could be forgiven for thinking that the only way out of US economic gloom is by getting the Chinese to revalue their currency. Unfortunately this is nothing less than a chimera.

Trade matters and trade with China matters greatly. But political pressure to revalue the yuan could have very negative side effects. With all the talk of tariffs and import duties, a fundamental fact remains: US consumers are massive beneficiaries of the yuan being valued at 6.6693 to the US dollar (as it was at the last official posting).

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