GCM Survey 2011

Market Results Highlights

 

This page provides highlights of the sixth global capital markets survey. The survey represents the world's most senior corporate and financial decision makers. The menu above provides additional information concerning the survey in brief, its methodology and the sample profile.

 

The survey covers two groups, for whom selected results are detailed below:

 

  • Head of Finance and Treasury in the world's largest organisations
  • Senior individuals in banks and financial institutions active in the capital markets.
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    LARGE ORGANISATIONS: Heads of Finance and Treasury

     

    Areas of Responsibility

    The four main areas of responsibility held by both Heads of Finance and Treasurers were Treasury (for which 70% were responsible), relationships with domestic banks (69%), raising capital (62%) and relationships with international banks (60%) with 46% involved in project/structured finance and 42% in international risk management.

     

    Other areas, such as investment/fund management, investor relations, mergers and acquisitions, corporate governance, partnerships, investments and technology and new markets were less widely held and tended to be more the responsibility of the Head of Finance/CFO than the Treasurer.

     

    Means of Raising Capital

    When asked which means of capital they would consider if they were to raise money in the next 12 months domestic bonds were most popular in the Americas and Asia/Pacific, International Bonds/Eurobonds in EMEA (around half would consider using these in each respective region). Syndicated loans were the next most likely means of raising capital (40% overall) followed by other loans (29%). Overall 21% did not expect to raise capital (highest in the Americas, 26%).

     

    Other means of raising capital which were less likely to be considered included the sale of assets (16%), domestic equity issues (13%, higher in the Americas, 19%) and international equity issues (5%).

     

    These results have remained relatively consistent over the survey series with equity issues showing the biggest decline in popularity since the first survey in 1997.

     

    Banks Dealt With

    When asked how many banks they maintained a relationship with for international business 4% dealt with none, 9% with 1 or 2 banks, 34% with 3 to 9, 22% with 10 to 19 and 28% with 20 or more. This gave an average of 17 banks dealt with which has remained relatively constant over the series of surveys.

     

    The one banking need which correlated with use of a larger number of banks was international risk management (used by half of those maintaining relationships with 10 or more banks and a quarter of those with 5 or less banks).

     

    BANKS AND FINANCIAL INSTITUTIONS

     

    The individuals who participated in the survey worked in banks and financial institutions which provided services to corporate clients in the capital markets. The sample was split into two groups, those in senior general management positions and those responsible for specialist areas such as loans, treasury or M&A.

     

    Just under half (43%) gave general management as an area of responsibility. The main specialist areas in which they were involved included risk management/derivatives and foreign exchange (in each of which 28% were involved) with between a quarter and a fifth involved in cash management, treasury, new bond issues and M&A.

     

    When asked which of 10 factors would have the greatest impact on their work in the next two years 6 in 10 of those in general management ticked the boxes for 'ability to attract and retain highly skilled staff' and 'greater levels of government regulation'. Attracting staff was the top issue in all regions as well as for those heading up specialist functions, with regulation being less important in Asia (where exchange rate uncertainties were more of an issue). Levels of trust and confidence in the banking sector were important to 43% overall with half of those in the Americas claiming 'changes to legislation or taxation affecting bank activity/location' as a key issue.

     

    A similar question in the first survey in 1998 placed intensifying competition top (57%) followed by globalisation of the financial markets (49%) with regulatory change well down the list at 24%. In Europe, as might have been expected, the single European currency topped the list, claimed by 66%.

     

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