Inaugural SE Asia Corporate Funding Forum
FinanceAsia and The Corporate Treasurer’s inaugural Southeast Asia Corporate Funding Forum ran on 19th September at The Marina Bay Sands in Singapore. Gathering the region’s most influential CFOs and Treasurers, the Forum attracted over 270 delegates and generated a lot of discussion.
The first panel of the day, entitled ‘The Future of Funding’, saw Damian Glendinning, Vice-President and Regional Treasurer at Lenovo, remark on the impending reach of Basel III and how ‘companies must be ready to seek alternative forms of funding rather than relying on bank loans’. He also posed the question of ‘if Basel III creates a shift by corporates to the bond markets, will this actually reduce risk in the financial system, or will it simply shift it to a different place?’.
Following ‘The Future of Funding’ session, ‘Relative Risks’ were considered by Head of Treasury at Essar Group and American Express. Fui Siong Ang, Regional Treasurer, Japan/ Asia Pacific/ Australia, at American Express noted that the most important risk to consider is ‘liquidity, without cash you are dead in the water.’ He also emphasised that ‘companies must be diligent and orchestrate a comprehensive funding plan, with early warning indicators that allow for a contingency plan to be implemented if liquidity is scarce and funding methods fail’.
Other topics discussed in the morning included ‘accessing funding through the loan market’, ‘funding through M&A’ and ‘tapping the bond market’. During the bond market discussion, panelists conversed on the issue of whether cheap is good and how companies must be strategic when looking at which type of bond they choose. Ricardo Tan, CFO at VistaLand, commented that ‘whilst bond markets are relatively cheap, the first hurdle is usually quite expensive, especially in US dollar market. On the flip side, the US dollar market opens up your investor base and raises your profile in the bond and, in turn, the equity market as investors take note of your brand and are interested in your portfolio’. Fellow panelist Christopher Chan, President & Director at Gajah Tunggal, highlighted that when tapping any bond market, ‘the process of pre-funding is always a good one – it engages your investors early on and helps to ensure that funding targets are reached’.
Equally, the afternoon’s sessions generated a lot of discussion, including ‘SEA appetite for Dim Sum bonds’, ‘funding through Sukuk’, ‘the realm of corporate governance in relation to CFOs and Treasurers’ and our last panel ‘issuers’ perspective on investor requirements’. Clifford Lee, Managing Director & Head of Fixed Income at DBS commented that ‘whilst the process for Dim Sum issuance is clear, approval is not’. In the latter panel that reflected on issuers’ perspective on investor requirements, Lim Lai Seng, Group Financial Controller at IOI Corporation, remarked that ‘whilst it is important to manage expectations on both sides, one point for issuers to remember is that if covenants are too restrictive, it can cause huge problems down the line’.
We look forward to returning next year and welcoming you to our forum!
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