This week’s International Treasurer editorial meeting brought up a number of topics to be explored in the coming weeks. These include investor activism, a rebound in Europe and setting up treasury operations in Africa.
Investor activism
Carl Icahn just announced a big stake in Apple, prompting speculation he’s going to push harder for the cash Apple is holding (about $137bn as of Q1, although much of it overseas). Back in April at the NeuGroup’s Tech20 treasurers meeting, sponsor Bank of America shared with members ways to figure out if they are activist targets or not. We’ll explore what markers activists look for, beyond the usual share price performance, trading multiples and operating performance measures.
Europe comes back
Recent headlines suggest that the eurozone is on the mend. According to Reuters, recent data suggest that the Germany and France, which grew faster than expected in the second quarter, are beating the “widely heralded expansion” in the US; the two countries are also “pulling the euro zone out of a 1-1/2 year-long recession.”
So what are the consequences of this rebirth? What does it mean for emerging markets, which until recently were the go-to destinations for the best returns. What will it do for European corporate debt issuance? The Wall Street Journal, citing Barclays data, recently reported that unlike US companies, “European investment-grade corporate bonds are in positive territory this year, and there is little sign of them losing their allure for investors.” Corporate yield spreads are now close to their lowest levels since late 2007.
Africa treasury
A recent conversation with Standard Chartered Bank brought to light the growing interest in Africa, beyond South Africa. According to experts, Africa is now seen as an attractive destination for corporates due to a decade of fairly stable economic growth and increased demand for Africa’s plentiful mineral resources. But what support is there for treasury operations? The fact is there remains many challenges for treasurers looking at Africa, much like there was in Asia and Latin America just a few years (and still today in the more remote areas of those regions). Hurdles to be overcome include banking infrastructure, cash visibility and security. We’ll explore these challenges and identify banks that are currently offering services in the region.