Treasury experts from around the world share their views on the year ahead.

Twelve months ago, the world was still reeling with the impact of unexpected world events in the form of Brexit and the election of President Trump in the US. Many were concerned that further shocks could dominate the headlines in 2017 – and consequently caution and uncertainty were uppermost in treasurers’ minds.

Another year on, has this changed?

Rick Martin, Group Treasurer, GasLog

“Being in shipping, we are always mindful of any trends towards protectionism,” comments Rick Martin, Group Treasurer of GasLog Ltd, which specialises in the transportation of liquified natural gas. “So far, it would seem that it is more talk than action, which is good news – and not just for us, either.”

Also key for the company is the continuing growth in demand for natural gas (methane). Martin explains that trends in China and India towards cleaner fuels are helpful, as is Korea’s move away from nuclear power. He adds, “We welcome the opportunity not only to grow our business, but to help reduce the global carbon footprint as well.”

Combined with the supply/demand balance for LNG shipping moving into more favourable territory, Martin says “We are looking forward to 2018 – albeit without ever letting down our guard in what can be a quite volatile market.”

Marianna Polykrati, Group Treasurer, Chipita

As the Group Treasurer of Greek food company Chipita, Marianna Polykrati has been paying close attention to geopolitical risk in recent years. She notes that 2018 is a year that will probably be “quite vulnerable to geopolitical developments, with a main focus on the Brexit finalisation and the effects on the European Union.”

Nevertheless, she has plenty of plans for advancing treasury in the year ahead. As in 2017, she says the top priorities include the automation of treasury, “since we consider that the treasury digitalisation era has started, and the IT landscape shall be materially changed in the near future.” She notes that a side effect of this automation will be the increasingly higher levels of fraud and the safety measures that need to be taken as a result – a concern which is another priority for Chipita’s treasury.

“And as always, we are investigating solutions to make the treasury function more effective within our Group, focusing on in-house bank set ups, cash flow management and seeking alternative funding sources,” she says.

George Dessing, Senior Vice President Treasury & Risk, Wolters Kluwer

Dessing says that with the world becoming more ‘global’, complex, connected and volatile – and therefore more uncertain – the information, software and services provider is “translating these projected trends and possible risks into opportunities.”

For example, he says that Wolters Kluwer is protecting its people, environment, assets and reputation by investing in programmes such as a cyber risk governance framework and incident management and crisis communications. “Furthermore, proactively we translate these risks into new and innovative ways to help our customers,” he notes, adding that digital and services now represent 88% of the company’s total revenues.

Where priorities for this year are concerned, Dessing plans to “Stay ahead of the curve by being closely connected to our business, whereby we are further building on our internal treasury and risk communities as a key enabler for integration and adding value to our business.” He adds that other upcoming challenges include US tax reform, GDPR, and new IFRS regulations relating to leasing and derivatives.

Gourang Shah, Head of Treasury Services Solutions for Asia Pacific, J.P. Morgan

In Asia, “currencies have stabilised – in fact, some of them have appreciated against USD – and emerging markets have performed better than people were expecting last year,” notes Gourang Shah, Head of Treasury Services Solutions for Asia Pacific at J.P. Morgan. “So for me that was the biggest change in terms of people’s expectations at the beginning of 2017 versus what happened, which in a way was a positive surprise for many people.”

At the same time, however, companies have had to take more restrictions into account when moving money out of China or Malaysia. In November 2016, Bank Negara Malaysia re-enforced rules prohibiting offshore ringgit trading – a move which Shah says had a continuing impact on treasurers in 2017. In China, meanwhile, regulators took steps at the beginning of the year to restrict the movement of renminbi offshore, although this was later relaxed in April.

“Treasurers have certainly had to adapt to these changes,” said Shah. “Of course, these changes have made cash more trapped in certain markets – but at the same time, with negative rates in Europe and dollar rates not very high, people have started sweeping less from Asia into Europe. Yield in the developing world is low compared to historical standards, but it’s high on a relative basis compared to the developed world. This I think has played a role in keeping more liquidity in Asia.”

Shah adds that this could change if tax incentives make it more attractive for companies to move surplus funds to developed markets. “But the operating liquidity in Asia is growing: most companies have got a higher revenue share here, and they’ll have to keep that money here for managing their businesses. Everybody is looking for growth, and it’s coming from Asia.”