Developing Issues: Looking for Yield; BAML in LatAm; TIMPG Agenda

A look at what’s on International Treasurer’s radar screen this week.

This week’s International Treasurer editorial meeting brought forth several topics, including companies’ continued hunt for yield in a low interest rate environment, a profile of Bank of America Merrill Lynch’s Latin America footprint, and some of the topics suggested so far for October’s Treasury Investment Managers’ Peer Group meeting.

Good yield hunting.
There have been several news reports of companies – most notably Google – dipping their toes back into asset backed securities. According to the Wall Street Journal, the company has “plowed hundreds of millions of dollars in recent months into asset-backed securities, tied largely to automobile loans and consumer credit-card payments.” It’s a fair point to say that auto loans in particular are not the riskiest assets, so Google isn’t really going out on a limb. And while many companies are resigned to the Zero Interest Rate Policy for the next couple years, the topic of where else to be company cash has been a suggested topic of several upcoming NeuGroup Peer Group meetings.

BAML in LatAm.
Recently at The NeuGroup’s LatAm Treasury Managers’ Peer Group, Bank of America Merrill Lynch (BAML) outlined how it plans to keep building out its regional banking network. Latin America is a priority market for the bank and it is looking at regional structure realignment to provide greater funding and resource support for the area’s growth. While the strategy so far has been to concentrate on the main emerging markets, i.e., Mexico and Brazil (combined represent over 74.6 percent of the GDP in Latin America); it plans to cover the remaining non-presence countries through stronger bank partnership agreements. IT will take a deeper look at their current and developing capabilities in the region.

TIMPG Agenda.
The NeuGroup is currently creating the agenda for the next Treasury Investment Managers’ Peer Group Meeting scheduled to take place at the end of October.

1. Current suggested topics include:
2. Members’ approach to risk management
3. Amount & Type of Credit Analysis on In-House Managed Portfolios
4. Update on political situation – Europe and US
5. Asset allocation strategies
6. Discussion of analytical tools used for internal portfolio management
7. MMF Reform
8. Treasury, Trading, Risk Management Systems Utilized by TIMPG Members
9. Portfolio systems used to manage the in-house portfolio