Most companies aren’t planning to change their short-term investment strategy following this week’s downgrade of the U.S. by Standard & Poor’s, but a quarter of financial professionals are now saying that S&P’s action makes the U.S. a less desirable place for capital investment, according to a survey by the Association for Financial Professionals (AFP).
The survey, conducted on August 9-10, asked five questions focused solely on possible impacts to corporate investment strategies and access to capital—not on the validity of S&P’s analysis.
“What we are hearing this week is far different from what finance pros were telling us in June,” said Jim Kaitz, AFP’s president and CEO. “While the U.S. may still be the best place to park idle cash, some companies think the U.S. isn’t the best place to deploy strategic cash. That means they may look elsewhere when expanding their business or hiring staff. ”
- A quarter of financial professionals say that S&P’s action makes the U.S. a less desirable place for capital investments (and hiring, etc.)
- 40 percent of survey respondents anticipate access to (cost of) capital will be detrimentally impacted by S&P’s decision
- Despite S&P’s decision and despite the extreme market volatility, companies still see Treasury securities as an important investment vehicle in a portfolio that is designed primarily to protect principal
ABOUT THE SURVEY
AFP conducted a five-question survey on August 9-10, generating 508 responses. (Questions were an outgrowth of the earlier AFP Liquidity Survey.) Respondents were senior finance and treasury executives from a broad range of companies – typically U.S.-based multinationals with a median of $2 billion in revenues. Key findings are posted on www.afponline.org/liquidity
ABOUT AFP® (www.afponline.org )
The Association for Financial Professionals (AFP) is the daily resource for a network of more than 16,000 treasury and finance professionals. Headquartered outside Washington, DC, AFP provides members with news, economic research and data, treasury 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 network.