Liquidity in Asia


17 Oct 2007

During the EuroFinance Conference held in Singapore in May 2007, HSBC Global Payments and Cash Management organised a round table of corporate treasurers to discuss issues surrounding liquidity in Asia-Pacific. They included Carrie Lee, Deputy Group Treasurer of Noble Group; Jean-François Vingre, Regional CFO of CMA CGM; Jason Wang, Regional Treasurer of Henkel Asia Pacific Ltd; and Peter Wong, Executive Board Member of the Treasury Markets Association, and Regional Director and Treasurer of AIG.

Stephan Levieux, Regional Head of Product Management, HSBC Global Payments and Cash Management, Asia-Pacific, hosted the event.

After being introduced by Stephan Levieux, members of the panel discussed the ways in which they deal with their cash and liquidity management requirements in their own organisations in Asia-Pacific.

Issues covered included payment cultures from one company to another, which vary depending on the market and nature of the company's business. All treasurers agreed that they are eager to see electronic payments as the norm, given their efficiency, cost and straight-through processing benefits.

The participants also discussed the payment habits of developing countries (whose payments are still paper based – primarily cash or cheque), the question of whether to work with one bank or multiple banks across the region, and regulations in different markets and how they affect the ability to collect and concentrate cash flows. Many said they that are using optimisation strategies with the aim of reducing collection and clearing times, getting more timely information and lowering collection costs by making use of advances in technology.

Looking ahead, the participants believed there will be more regulated markets, more exchanges set up and more commodities traded in the Asia-Pacific region. Some of the currencies that are restricted today will become more readily and freely exchangeable, which will enhance liquidity and reduce costs in the long run. There will also be continued improvements in efficiency, with new infrastructure, such as electronic funds transfer systems, being put in place.

Another trend they identified is the tendency towards more balanced bank portfolios, with global banks becoming more local to offer more products and services previously only offered by local banks. At the same time, local Asian banks - mainly from China but also from other countries – will become international banking partners for multinational European or US corporations.

View the full round-table article featured in Issue 158 (September 2007) of Treasury Management International.

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