SEC Hot Topics Seminar. State of the Capital Markets September 14, 2010. Economic outlook. Downturn to end within 12 months. 40%. 64%. 61%. Of companies believe the global downturn will end within the next 12 months compared with 30% in 2009.
State of the Capital Markets
September 14, 2010
Downturn to end within 12 months
Of companies believe the global downturn will end within the next 12 months compared with 30% in 2009
Of companies feel more confident about the prospects for their local economy than six months ago, the most optimistic being Australia
Of respondents expect the downturn in their own industries to end within 12 months, compared to just 49% six months ago
Confidence in local economy
Downturn in industries to end within 12 months
*Data presented in slides 2-10 is based on an April 2010 survey of 817 executives by Ernst & Young LLP.
Operational efficiencies/cost reduction
Customer segmentation and profitability
Performance monitoring of subsidiary businesses
Supply chain risks/
Balance between fixed and variable costs
Integrating previously acquired business
Companies are operationally restructuring to focus on performance improvement
Wave of refinancing expected
When restructuring what will be your priority?
How soon are you likely to refinance loans or other debt obligations?
Within 6 months
6 - 12 months
Liquidity and working capital management
Capital/debt structure 14%
Those with access to funding will be well placed to take advantage of opportunities
As a result of the downturn, deal processes continue to evolve
For companies that need access to funding for capital projects, when do you think this will become available?
How likely is your company to execute divestments in the following time periods?
6 -12 months
Within 6 months
Not in the foreseeable future
More than 5 years
Of companies say that credit and capital conditions have improved in the last six months
26% of all respondents stated that access to funding is not a problem for their company
Wave of refinancing is expected with 58% of companies needing to refinance loans or other debt within the next four years
Driving operational fitness and working capital management remains critical – 35% still need to restructure core business
62% expect financing to fund major projects available in the next 12 months
Of companies are focusing on growth, up 56% compared to six months ago
Likelihood of acquisitions
Expect to make an acquisition in the next 12 months, up from 33%
Expect to do so in the next 6 months, up from 25%
Kid Brands Subsidiaries
Confidence returning to the markets
Funding becoming more available
Heightened uncertainty continues
Investor focus on capital allocation
Pent-up demand/supply in M&A markets
Industries bifurcating: consolidators and consolidatees
Deal processes continue to evolve