Treasury Today Asia September/October 2016

Published: Sep 2016



Looking beyond bank deposits

For corporates in Asia Pacific, bank deposits still remain the number one short-term investment option by some distance. Yet, this is not typical elsewhere in the world. In Europe and the US, for instance, corporate short-term investment portfolios are more balanced between bank deposits and money market funds (MMFs), and then supplemented with a handful of other investment options.

This is changing, however, as regulation, such as Basel III, is slowly forcing banks to have difficult conversations with their corporate clients about their cash deposits and how these may no longer be welcome in the new regulatory paradigm. At the same time Asia’s asset management industry is gaining momentum as various factors converge, including further market liberalisation and the deepening of the capital markets.

Yet there is still some way to go. Many of the region’s markets are nascent and there are significant hurdles to overcome before they become a mainstay of the investment toolbox. A large number, for instance, still lack a diversified underlying market of high-quality, liquid paper for funds to invest in. The low interest rate environment may prove another issue for the corporate investor and for the future development of MMFs.

In this edition, we explore the short-term investment landscape in Asia Pacific in detail, looking at the growth of the region’s MMFs and how these may develop further in the coming years. We explore other developments across the region, including the regulation impacting the OTC derivatives market and the potential opportunities and challenges for corporates in China, India and ASEAN.

Nominations for our 2016 Treasury Today Asia Adam Smith Awards, proudly supported by ANZ, have now closed. We would like to thank everybody that entered and we look forward to hosting all winners and their partners and providers to the Adam Smith Awards Asia Gala Presentation Lunch at the South Beach in Singapore on Thursday November 17th. We will share full details of all winning entries online in early November with additional coverage rolling out in the first quarter of next year.

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