ACT Annual Conference Highlights

The spotlight this month is based on some of the presentations and discussions that took place at the Annual Conference in Manchester last week.

There was something for all tastes, whatever specialism - Cash Management, Risk Management or Corporate Finance. Corporates, advisers, bankers and other suppliers to treasury were well presented as usual with delegate numbers up on the previous year and the number of exhibitors was at its greatest ever.

The state of recovery can probably be well gauged from the number of banks trying to promote themselves. After two years of saying no and presumably not therefore bothering to advertise, the banks were out in force trying to persuade corporates to use them. Indeed this theme was echoed slightly through the conference when most speakers indicated that some confidence was returning to the market and there was some competition to lend, reflected in some lowering of spreads, or margins, and some return to normal in terms of the conditions required in the paperwork.

A major theme that seems heavily pushed, for several years now, is that of trade finance or supply chain finance. For SMEs it is often the only sort of finance available and certainly the bankers on the stands were pushing this as much as any other thing. The cynic in you will say that they will promote the high margin business and not consider vanilla lending and while that is the case, it is no different from any other business where they would hardly push to sell what they did not have on the shelves. However the rising importance of cash management, especially to squeeze liquidity from all corners of the world was also apparent and that is certainly something that banks will happily sell and corporates happily buy.

The mood was generally optimistic and emerging markets were ever popular as a source of future income. One speaker indicated that investment in future might be limited as so much money might be trying to push its way in. So get in now before it is too late.

Another subject which comes up repeatedly is defined benefit pension risk and we did hear in one session of some novel structures to deal with this, and GKN came up with an example of it during the course of the conference as if on cue. Longevity, often the one risk that treasurers chose to ignore for being too difficult, does seem to have been the spur of innovation and more hedging products are available than in the past.

We heard different views on the future of the euro, some speakers saying it could fall apart or see some exits and other saying it would survive this recent onslaught. Nevertheless, a wise treasurer might consider what impact either scenario might have on their business. A break up by even one country and the re-introduction of currencies has implications for cash management and risk management. But on the other hand, a patching up of the problems and cross subsidies between states also has implications for business, as how much can the rich countries just go on propping up the poorer countries without some dislocation to the status quo?

Non bank finance was an important subject and there seems to be a lot of weight behind the disintermediation theory where investors other than banks provide serious amounts of finance to business. The Private Placement market was mentioned quite a lot.

Issues on counterparty credit were also mentioned as was also the ACT heavily pushed OTC derivative issue about collateral.

To end on a slightly more humorous note, the following slogans were noted from three different banks. A variation on a theme some might say?

• “Thinking today about tomorrow”
• “What matters today”
• “Transforming your tomorrow. Today”

If you attended the ACT conference and would like to access the speakers presentations they are available at www.treasurers.org/annualconference.

These presentations are only available to delegates and a password to access the download will have been issued to you with your delegate pack.

By Will Spinney