For the first quarter of 2013, the AFP Corporate Cash Indicators™ (AFP CCI) showed a reading of +10 over the fourth quarter of
2012, and +8 year-over-year.
The forward indicator showing expectations
for the second quarter of 2013 was negative at -5, following a negative reading
in the fourth quarter of 2012 and only the third negative reading in the history
of the survey.
Performance for the indicators is determined each quarter
by the Association for Financial Professionals (AFP) and underwritten by State
Street Global Advisors. The indicators measure recent and anticipated changes in
corporate cash balances by calculating increase percentage minus decrease
AFP Corporate Cash Indicators™
+10 1Q13 v. 4Q12
1Q13 v. 1Q12
-05 2Q13 expectations
percentage minus “decrease” percentage.
First quarter 2013
indicators show that 38 percent of reporting organizations had greater cash
balances at the end of 1Q13 than they had at the end of 4Q12, while 28 percent
had cut cash reserves.
Year-over-year, 35 percent held greater balances at
the end of 1Q13 than they had at the end of 1Q12, while 27 percent held smaller
cash balances. Companies also reported that their investment selection for cash
and short-term investments had become more aggressive.
The slower pace of
cash accumulation is consistent with brighter outlook many companies have for
the future. Anecdotally, treasurers indicated they would be using cash balances
to pay down debt, make capital expenditures and, in some cases, acquisitions.
“For the first time, the index has shown negative for two consecutive
quarters,” said Jim Kaitz, AFP’s president and CEO. “The change we saw at the
end of last year may be the beginning of a trend.”
The AFP CCI™ provides
treasury and finance professionals, policymakers and market analysts with timely
data on a determinant of economic activity: corporate cash. Each quarter, AFP
asks select members whether their short-term holdings increased or decreased in
the past year and past quarter; whether investment selections for those holdings
changed; and whether they expect cash holdings to increase or decrease in the
coming quarter. AFP members have agreed to participate in this ongoing study on
a long-term basis.
AFP began collecting quarterly data in January 2011
and has now collected nine data sets. See www.afponline.org/CCI. The next set is
slated to be published July 29, 2013.
AFP Corporate Cash Indicators™ is a
trademark of the Association for Financial Professionals. All AFP Corporate Cash
Indicators™ survey questions and reports are the copyrights of the Association
for Financial Professionals, and all rights are reserved.
ABOUT AFP® (www.afponline.org)
The Association for
Financial Professionals (AFP) is the professional society that represents more
than 16,000 treasury and finance executives. Headquartered outside Washington,
DC, AFP provides members with news, economic research and data, financial
certification programs, networking events, financial analytical tools, training,
and public policy representation to legislators and regulators. AFP's global
reach extends to over 150,000 treasury and financial professionals worldwide,
including AFP of Canada; London-based gtnews, an on-line resource for the
treasury and finance community; and bobsguide, a financial IT solutions