It is an uneasy time for many, with war on Saddam Hussein in its initial phase as I write. The uncertainties of the war mean that many people and businesses have to put their plans on hold.
That is not to say that the planning has ground to a halt. The various teams at the ACT are working on their plans for the rest of the year and well into next – Events have the imminent UK Treasurers’ Conference in Brighton (see page 30) and the Annual Dinner in November high on the agenda. Education has the regular round of exams and revision courses to contend with.
On the editorial side, in September last year we set our spotlights until the end of 2003. In the light of developments since then, we are now revising our list for the rest of the year and early 2004.We shall be running with Risk Management in May, June’s issue will examine how the treasury function can be carried out in the most cost-effective way and in the July/August edition, we investigate how individual treasurers can best develop their expertise and their career.
In a new departure for The Treasurer, we shall also be running a special feature on Money Market Funds in all three of those issues. The features will cover all aspects of this major growth area, providing our usual technical and practical insight.
Our September issue will follow the lead of the new 2003 edition of The Treasurer’s Handbook (see below) and take a ‘pan-European’ stance – the idea being that no matter where you practice your treasury, the issues and practical advice are very similar. October and December will see our regular Deals of the Year features. As ever, we welcome your comments and feedback on these ideas – whether you are a corporate treasurer, a banker or a consultant, please let us have your thoughts and ideas. Our immediate planning concerns September’s European edition.
All members of the ACT should now have received the 2003 editions of The Treasurer’s Handbook and ACT Members’ Directory. I hope you will agree the Handbook now provides phenomenal value. We shall continue its development over the next couple of years, so it becomes the definitive ‘bible’ for treasurers practising in the UK and Europe, to add to our stable of publications. To this end, we are already planning for 2004. Again, please let us have your thoughts and ideas.
Appropriately enough for Oscars’ time, I would like to thank a number of people in particular for their hard work and dedication in putting together such an excellent product: Sheelagh Killen and Claire Wood for the editorial, Caroline Cowen for her persistence in getting the Treasury Services Directory together, Michael Watkins for sorting out the production process and finally, Sarah Duree for her excellent design work in making it a much more user-friendly publication.
Many of you will be receiving this issue in your delegate pack at the UK Treasurers’ conference in Brighton – I hope you enjoy the read and get the most out of the conference.
MIKE HENIGAN
Managing Editor
Mentions in the media of potential perils associated with rising inflation have become scarce. A word search of the broadsheets would, I suspect, show up more references to ‘deflation’ than ‘inflation’. But is this really a risk for this economy and our key trading partners in the US and the core of the eurozone? In sum, my answer is that deflation is probably not a major and imminent risk – with the odd exception – but that the phenomenon of disinflation is likely to be with us for many a moon.
These are a selection of bonds announced recently. The details, updated to the middle of last month, were supplied by Thomson Financial Securities Data and other sources.
ACT backs FRED 31
The ACT has offered broad support for Financial Reporting Exposure Draft (FRED) 31 on share based payments. It also voiced a recommendation that a similar approach be developed in relation to bonds convertible into shares.
David Creed looks at whether current accounting approaches, including those for share-based payment, adequately reflect movements in shareholder value.
One hundred and fifty years ago this year James Wilson founded the Standard Chartered Bank. What was the world like in the days of James Wilson? Things were obviously different in many ways, but what is interesting are the similarities to many of the issues we face today. During the later part of the 19th century one of the main global issues was deflation. From 1870 up until the outbreak of World War One, prices fell across much of the world. But it wasn’t such a bad thing - in fact, there were periods of strong economic growth and high consumer spending.
This country guide provides a brief summary of some of the key regulatory, banking and cash management aspects which treasurers need to consider when undertaking commercial activities in Argentina.
The Department of Trade & Industry (DTI) has recently issued the final draft of proposed regulations that will introduce treasury shares into UK treasury practice during 2003. Treasury shares have been permitted in other jurisdictions such as Japan, Germany and the US for some time, but many UK treasuries will be exploring the opportunities offered by this tool for the first time. Therefore, Treasury Essentials this month offers students of The Association of Corporate Treasurers (ACT) a brief beginner’s guide to treasury shares.
By centralising its treasury systems worldwide, BP Group has increased its efficiency and optimised performance. Nick Bamfield and David Bright of BP Group explain how they pulled it off.
Nokia Treasury’s goal has always been to add value to Nokia’s core businesses by actively providing financial and risk management services and advice. This applies in our core activities of funding, risk management, and cash management. In cash management, this has a strong process orientation, and we try to eliminate or simplify cash management processes for our operating companies so that they are freed to focus on the core business. The evolution of cash management at Nokia illustrates how this works.
Before addressing how service providers are responding to the cash management needs of companies, it is worth spending a few minutes summarising some of the key environmental factors.
Aengus Murphy and Pat Leavy of FTI look at workable cash management solution that could benefit smaller organisations.
IBOS is an association of major commercial banks that enables each member to offer a comprehensive international payments and cash management service to its customers, without the bank needing its own branch network. Several of the IBOS member banks have a significant regional footprint, which enables service to be offered in more than 40 countries on the basis of 12 member banks. This then translates into a meaningful global footprint.
SWIFT, the co-operative that supplies secure financial messaging services around the globe, has traditionally had limited involvement with non-financial institutions, although larger companies have long requested extensive access to SWIFT.
In designing and implementing a cash management solution, ensuring you have the right staffing for a project can make all the difference in delivering an outcome which works, is on time and hits its budget. This was a key theme emerging from responses to The Treasurer’s mini-survey on cash management implementations. All but one of our respondents cited adequate resourcing, both internally and from the company’s external providers, as critical to the success of their respective projects.
You’ve chosen your supplier, convinced the Board, signed the contract and eaten the celebratory dinner. Now is the time to plan the implementation of your cash management project. But, wait a minute, is the order quite right there?
In today’s tough economic climate and highly competitive environment, servicing is the key criterion for individuals and global businesses, both to expand and to remain in business. In fact, statistics in the servicing industry show that the most successful companies are putting client satisfaction high up on the agenda, with the most successful scoring 92%. But how can this be achieved?
During 2002, it became clear that the introduction of the euro had not necessarily resulted in more efficient cash management structures between the different countries in the EU. In particular, the concept of notional cash pooling, which is familiar to nearly all UK treasurers for their sterling cash management, was not widely available for euro management in either individual regions or across borders of the different euro countries.
All readers of The Treasurer should by now have seen the flyer for the UK Treasurer’s Conference, which we are again running this year in association with EuroFinance Conferences in Brighton from 29 April to 1 May. If you have received multiple copies of the flyer, my apologies; our repeated efforts to ‘de-duplicate’ the lists used for mailshots are, I am afraid, never going to be perfect. The initial response to the mailings has been very encouraging and the indications are that there will be an excellent attendance from a cross-section of the treasury community.
In 1956, Celtic were not a great football team. Remember, this was before the blessed Jock Stein took over as manager, before they won championship after championship, before they won the European Cup in Lisbon. (Sadly, I left Scotland before their glory days began.)
