The Treasurer December 2007
Marketwatch Technical Update (TT Dec07 p8-9)
FSA raises CfD concerns
The Financial Services Authority (FSA) has published its concerns that contracts for differences (CfDs) are being used to seek to influence votes and other corporate governance matters on an undisclosed basis, and to build up stakes in companies, again without disclosure.
Tesco puts dollar bonds in trolley for first time (TT Dec07 p8)
British supermarket giant Tesco is aiming to crack the US market in more ways than one. In the same month that it took its first giant stride into the US market with its Fresh and Easy neighbourhood stores, Tesco also launched its first-ever dollar-denominated bond.
Ask the experts (TT Dec07 p12-13)
If it ain’t broke…
The IAS 19 accounting standard does not provide a realistic indication of the price for which a pension scheme’s liabilities can be settled, but conventional estimates of buy-out liabilities are now probably too high, particularly given deals like Citibank’s acquisition of the Thomson Regional Newspapers pension scheme and the Pensions Corporation acquisition of the Thorn and the Thresher schemes. So what liability measurement basis should the principal interested parties be demanding the company accounts use? Three ACT members give their views.
The idea of moral hazard (TT Dec07 p14-15)
In a speech to the ACT Annual Dinner in November, Paul Myners discussed the responsibilities that come with owning a company. An edited version of the speech is given in this article.
Top Gear (TT Dec07 p16-18)
Who’s afraid of the big, bad private equity wolf? Quite a few people it appears. Although attacks have been muted since the credit crunch hit with a vengeance, early 2007 saw high-profile figures such as Damon Buffini of Permira under fire from unions, politicians and others. They criticised the impact of private equity deals on the corporate landscape
A fragile recovery (TT Dec07 p20-22)
With pension scheme deficits narrowing or even moving back into surplus, talk of crisis is receding. But obstacles remain – not least the steadily increasing longevity of scheme members – and volatile markets could still undo much of the improvement.
Risk reporting comes of age (TT Dec07 p23)
Next June will mark 10 years of the combined code, a landmark piece of regulation and the first for many UKlisted companies in setting out how they were identifying and managing their important business risks. How relevant is the code? Not surprisingly there have
Sheltering foreign investments (TT Dec07 p24-25)
Traditionally corporations have been fairly passive in their management of foreign capital exposures. If net investment hedging did take place it was often the result of necessity where the risk of significant losses on the capital account was imminent. The majority of treasury resources are geared towards traditional cashflow exposures. The Citi/ACT annual corporate foreign exchange risk management survey teases out the latest trends.
A freeze in summer (TT Dec07 p26-27)
While it may be too early to say what the long-term effects of this summer’s debt market drama could be, there is some value in taking a few snapshots of the financial horizon. The intention of this article is not to be definitive, but to stimulate discussion and offer treasurers some thoughts from the capital market.
Managing the rollercoaster (TT Dec07 p28-30)
The ACT’s recent mergers and acquisitions masterclass examined the current landscape for M&As and looked at the processes that corporates need to undertake to ensure their deals are a success.
Changing attitudes (TT Dec07 p31)
JPMorgan Asset Management has just received the preliminary results of its Global Cash Management Survey 2007, which has once again been compiled in conjunction with the ACT. Now in its ninth year, the survey attracted 50% more respondents than last year, with 339 corporate treasurers from around the globe providing their comments for this year’s report, 290 of whom replied online.
Crunch conditions (TT Dec07 p32-33)
Make the complex simple (TT Dec07 p34)
At the recent ACT conference, IFRS and Shareholder Value: An Unlikely Marriage, sponsored by Lloyds TSB Corporate Markets, it was clear that treasurers remain sceptical over international financial reporting standards (IFRS). Conference Chairman Helen Jones, Global Head of Tax and Treasury at Reuters, asked attendees whether, after two years to amiliarise themselves with IFRS, they thought investors understood their accounts better under IFRS than under UK GAAP. The response was emphatic: 24% said yes, but 76% said they understood less.
An option to examine (TT Dec07 p35)
Asset-based financing is making its way into Europe at an increasing pace. Traditionally most popular in the US, asset based-lending is a finance option whose benefits UK companies are now starting to assess.
The Companies Act 2006 (TT Dec07 p36-37)
The Companies Act 2006 is not so much a new law but an important consolidation of company legislation. Parliament started working on a reform of company legislation 10 years ago but it is only now that some of its provisions have come into effect. Other provisions will come into force progressively over the next year until the whole Act is effective from 1 October 2008.
Setting out your stall (TT Dec07 p38-40)
Growing businesses’ view of the world of finance is very different from multinationals’ view. Growing businesses need to know what bankers really want, what finance is available and on what terms.
On feeling very important (TT Dec07 p41)
Being a clergyman has a curious Gilbert and Sullivan feeling about it, especially at Christmas. Like Father Christmas we dress in colourful and impractical clothes (how long would his fur stay white up and down chimneys?) and move around to music that is not otherwise sung. There is a sort of unwritten code in some churches that you should not look too much as if you are enjoying yourself, but being at a cathedral is fun because during December it tends to fill up several times over.
A question of delivery (TT Dec07 p42-43)
Tips for a top team (TT Dec07 p44)
What is the secret of a successful treasury team? Jennifer Carruth explores how a good treasury team should operate.
