BNP Paribas Cash Management University 2016

In early June,the ninth annual BNP Paribas Cash Management University was held in Paris.The delegates were polled about what keeps them awake at night:
1.the current political situation,53%;
2.a new sovereign debt crisis,17%;
3.the ECB's struggle to lift Europe out of deflation,14%;and
4.China's slowing economic growth,10%.*
Alain Papiasse,Group Chief Deputy Chief Operating Officer at BNP,said that the global economic outlook had clouded since the previous CMU last year,with the IMF making several downgrades.Only the US was doing better,and there are fears even about its growth cycle.Europe's modest GDP growth had improved a bit,but not sufficiently to dispel fears it was becoming a second Japan with anaemic growth and near-zero inflation for over 25 years.*
Negative interest rates threaten to become more than a temporary phenomenon,creating a dilemma for companies carrying excessive cash of whether to buy back shares or increase dividends.Digitisation would change the world dramatically over the next five years,and the ways BNP Paribas works with its clients.It also affects corporate treasurers' current areas of concern:
1.reporting and regulating compliance;
2.how to invest prudently in a low interest environment;and
3.cyber security's increasing importance.*
There were 260 delegates from 20 countries at the CMU.BNP Paribas is a French multinational that was ranked as the world's third largest bank by assets in 2012.*
BNP Paribas (Paris:BNP)

Asia This Day:Bernanke Succession;Syrian Framework

Asian markets were cheered by developments in the US and Geneva Monday morning,sending the MSCI Asia Pacific index up 0.55%.The withdrawal of former US Treasury Secretary Larry Summers from consideration to head the Federal Reserve is being seen as a definite plus by Asia,as it will supposedly make the tapering of supportive Fed policies a little less severe.
We're seeing the rally as being based on Summers being a litle more agressive on tapering,said Philip McNicholas,ASEAN economist at BNP Paribas.Broadly speaking,we do see down side risks to the region with this tapering.We actually think Malaysia is more sensitive.Malaysian markets are closed for a national holiday today.
In the Philippines,the government is being more effective in its spending.That process is still ongoing and showing improvement.Overall,the fundamental story is still there.In Indonesia,the government was able to implement fuel price reform in June.We do think that Thailand can ride this out.
Markets are expecting the Federal Reserve to make an announcement on tapering this week.Mr.Summers' prospective nomination to be Fed Chairman had become highly politicised,and even Democrats opposed him in an open letter supporting the nomination of Janet Yellen,who has become the consensus candidate.
Bill Gross of PIMCO tweeted that Summers' exit makes Monday a huge day for the risk-on trade,i.e.,the buying of equities.
Another positive influence on world markets is the agreement in Geneva on Saturday of a framework for Syrian chemical weapons disarmament by the US and Russia.This will now go to the UN for the final formulation of a Security Council resolution spelling out the details.The framework gives Syria one week to provide a complete inventory of its stockpile;stipulates the first inspection of the weapon sites in November;and the destruction of all the weapons by mid-2014.
US forces will remain on standby in the region to back the agreement up with military action.

Asia This Day:Last Chance to Ditch Gillard;Infosys Reboots

Indonesia raised interest rates last week,flying in the face of the long-standing global trend of cutting them.
BNP Paribas is recommending purchasing Chinese oil major CNOOC shares on rising production and a projected return on equity of 17% next year.
The Federal Reserve has to communicate a complex message that seems to be getting lost in translation,said John Woods,chief Asia Pacific strategist at Citi Private Bank.The market has to understand that the tapering of bond purchases the Fed is suggesting is not the same as tightening monetary policy.
Stock market losses in recent days are more a correction than a reversal.Once summer is past,we expect the underlying fundamentals to reassert themselves,with a slightly positive outlook into the end of the year.
The Australian parliament is convening today for a final two week session before the September 14 election.A poll shows the opposition coalition leading the Labour government of Prime Minister Julia Gillard by 57 to 43%,which translates to a 30 seat advantage.It is the last opportunity for Labour to replace her,yet former Labour leader Kevin Rudd is unpopular within the party and said he isn't interested in returning to the post.
Infosys co-founder Narayana Murthy has been recalled to the executive chairmanship of the software services firm,having left the CEO post 11 years ago.He said recovery at the company will take 36 months,but they will do whatever it takes to stabilise earnings.Sales have reached a four-year low recently.
It will be painful in the short term,but Infosys will revitalise the sales force with incentives and offer flexible pricing on large contracts.
The MSCI Asia Pacific index was up 0.85% as of mid-day Monday.
Infosys Ltd(INFY),CNOOC Ltd(CEO)

Dislocation And Danger

As Wall Street goes back to work after Labor Day,the outlook of many analysts remains one of dislocation and danger.Martin Weiss of Martin Weiss Research thinks we've seen just the first shock of the mortgage earthquake.We are only beginning to see a scarcity of credit.We don't have data until it's too late.The mortgage crunch is occurring right now.There has been a blow to the gut of the economy,and it is unlikely the government can stop it.Frank Cochrane of Market Timing Consultants says the market will rally,then fall.The market is seizing on a Federal Reserve rate cut,but it probably won't happen,and the market will fall.We will head down for the next 6-9 months.Michael Metz of Oppenheimer sees the U.S. economy slowing dramatically.There will be a recession because there is a big overhang of debt instruments,and the leverage market has a lid on it.Richard Iley of BNP Paribas notes that we are years away from a housing recovery.The Federal Reserve has underestimated the downturn,and there will be a drag on the economy until 2008.It is the biggest housing slump since World War II.How bad can things get? Between 2000 and 2002,the S and P 500 index fell 47%.Many portfolios lost half their value.One approach for concerned investors is to hedge every stock purchase with a bond fund purchase or savings account deposit.BlackRock's Income Opportunity Trust(BNA) is a broadly based bond fund.Branch Banking and Trust(BBT) offers an eSavings account that yields 4% and includes an ATM card,as well as free online and telephone banking.