AFP January 2022 CCI® outcomes discovered U.S. organizations anticipate that in Q1 they may construct money at a slower tempo than they did previous quarter.
BETHESDA, Md., Jan. 31, 2022 /PRNewswire/ — Throughout the fourth quarter of 2021, U.S. organizations continued to construct money and short-term funding holdings at an identical tempo to the earlier quarter and yr. These findings are from the AFP Company Money Indicators® (CCI), a quarterly survey of senior company treasury and finance executives performed by the Affiliation for Monetary Professionals (AFP) and underwritten by Allspring International Investments. The newest CCI’s quarter-over-quarter index studying decreased 4 factors to +17, and the year-over-year indicator elevated by 4 factors to +25.
Although enterprise leaders point out they plan to construct money reserves throughout Q1, they anticipate doing so at a extra gradual tempo than they did final quarter, signaling muted optimism as they plan for early 2022. The forward-looking indicator measuring expectations for adjustments in money holdings within the first quarter of this yr, decreased 16 factors from a studying of +18 to +2. A major share of firms attributes the anticipated improve in money holdings throughout this quarter to improved enterprise efficiency. Practitioners whose organizations expect to lower money and short-term investments throughout the present quarter point out they’re deploying money primarily to develop their enterprise.
These outcomes are based mostly on 95 responses from senior treasury and finance professionals this quarter.
“Enterprise leaders proceed to grapple with challenges dealing with the financial system, together with a resurgence of the coronavirus pandemic within the wake of Omicron,” stated Jim Kaitz, president and CEO of AFP. “That stated, it’s encouraging to see the flashes of optimism amongst treasury and finance professionals who’ve reported improved firm efficiency, with some even being ready to put money into their organizations.”
“2022 is promising to be a posh yr on many fronts for treasury and monetary professionals. With the Fed seeking to normalize charges, new SEC proposed amendments to cash market funds, and the continued challenges of the pandemic, liquidity and proactive money administration stay a prime precedence for traders,” Yeng Butler, Head of Funding Options and Liquidity Shopper Group, Allspring. “We’re inspired by the newest CCI survey outcomes and optimistic that many organizations will proceed to see improved enterprise efficiency.”
January 2022 AFP Company Money Indicators®
Change in money and short-term funding holdings up to now quarter: 4Q21 v. 3Q21 = +17
Change in money and short-term funding holdings over the previous yr: 4Q21 v. 4Q20 = +25
Anticipated change in money holdings throughout 1Q22 = +2
Aggressiveness of short-term investments = +2
The indications measure latest and anticipated adjustments in company money balances by calculating improve proportion minus lower proportion.
Every quarter, AFP asks choose members representing a broad cross part of U.S. companies the identical questions: whether or not their firm’s short-term holdings elevated or decreased up to now yr and previous quarter; whether or not funding alternatives for these holdings modified; and whether or not they count on money holdings to extend or lower within the coming quarter. AFP member firms have agreed to take part on this ongoing research on a long-term foundation.
Contributors handle their firms’ money and short-term funding portfolios and are absolutely conscious of their firms’ liquidity wants and enterprise methods. Since company selections to develop/shrink the dimensions of money and short-term funding portfolios mirror their enterprise outlook and path, adjustments reported by this broad group of firms are indicators of financial exercise.
AFP started amassing quarterly information in January 2011, and has now collected 45 information units. See www.afponline.org/CCI for solutions to ceaselessly requested questions. The subsequent set is slated to be printed April 25, 2022. For press queries, please contact Melissa Rawak, AFP managing director, at [email protected]
In regards to the Affiliation for Monetary Professionals® (AFP)
Headquartered outdoors of Washington, D.C., and positioned regionally in Singapore, the Affiliation for Monetary Professionals (AFP) is the skilled society dedicated to advancing the success of treasury and finance members and their organizations. AFP established and administers the Licensed Treasury Skilled and Licensed Company FP&A Skilled credentials, which set requirements of excellence in treasury and finance. On the internet: afponline.org.
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SOURCE Affiliation for Monetary Professionals (AFP)