Survey Results. Global Payment and Risk Management Solutions. March 2014

Transcription

1 Survey Results March 2014 Unrelenting currency volatility and increasing international trade drive need to mitigate risk AFEX, one of the world s largest non-bank providers of global payment and risk management solutions, today announced the results of its inaugural Currency Risk Outlook Survey, indicating that a vast majority (88%) of its clients in the US, UK and Australia foresee currency movements to be as or more volatile in the next 12 months than the preceding year. The survey polled 452 businesses around the world and found that half of the respondents will employ a hedging strategy in 2014, with more than a third (35%) expecting to hedge more than they did in Global Payment and Risk Management Solutions

2 1. Which of the following best characterises your company s revenue? $ million 0% 3% 4% 2% $11-50 million 5% 11% 12% 9% $2-10 million 27% 35% 35% 33% $501 million - 1 billion 0% 0% 0% 0% $ million 1% 1% 4% 2% Less than $2 million 66% 50% 45% 54% 2. Which country is your business headquartered in? Aerospace/defence 1% 0% 0% 0% Aerospace/defense 0% 0% 2% 0% Agriculture 6% 4% 2% 4% Construction 4% 5% 3% 4% Education 1% 2% 3% 2% Financial services 0% 0% 1% 0% Food & beverage 3% 5% 8% 4% Healthcare 2% 3% 0% 2% Leisure & hospitality 2% 5% 8% 4% Manufacturing 23% 23% 19% 23% Mining 1% 0% 1% 1% Other Please Specify 33% 38% 41% 37% Professional services 4% 2% 2% 3% Real estate 1% 1% 1% 1% Retail 17% 11% 9% 13% Software & services 1% 3% 1% 2% Utility 1% 0% 0% 0% 3. Does your company utilise forward contracts or other products to mitigate currency risk? No 46% 3 7% 61% 47% Not sure 3% 3% 4% 3% Yes, but infrequently 36% 32% 21% 30% Yes, regularly 15% 28% 14% 20% Page 2 of 12

3 4. What percentage of your revenue is exposed to currency risk? 0-10% 25% 30% 44% 31% 11-20% 15% 16% 10% 15% 21-30% 13% 10% 15% 12% 31-40% 9% 9% 6% 9% 41-50% 5% 7% 5% 6% 51-60% 6% 4% 5% 5% 61-70% 7% 5% 6% 6% 71-80% 4% 7% 1% 4% 81-90% 5% 3% 3% 4% % 10% 8% 6% 9% 5.1 What strategies do you plan to employ in 2014 to mitigate currency risk? (Please choose all that apply.) - Forward contracts No 55% 48% 72% 56% Yes 45% 52% 28% 44% 5.2 What strategies do you plan to employ in 2014 to mitigate currency risk? (Please choose all that apply.) - Swaps No 99% 99% 98% 99% Yes 1% 1% 2% 1% 5.3. What strategies do you plan to employ in 2014 to mitigate currency risk? (Please choose all that apply.) - Natural hedging via geography No 98% 94% 95% 95% Yes 2% 6% 5% 5% 5.4 What strategies do you plan to employ in 2014 to mitigate currency risk? (Please choose all that apply.) - Futures No 99% 100% 98% 99% Yes 1% 0% 2% 1% 5.6 What strategies do you plan to employ in 2014 to mitigate currency risk? (Please choose all that apply.) - Options No 96% 95% 100% 97% Yes 4% 5% 0% 3% Page 3 of 12

4 5.7 What strategies do you plan to employ in 2014 to mitigate currency risk? (Please choose all that apply.) - Not sure No 66% 75% 73% 72% Yes 34% 25% 27% 28% 5.8 What strategies do you plan to employ in 2014 to mitigate currency risk? (Please choose all that apply.) - Nothing No 80% 77% 61% 75% Yes 20% 23% 39% 25% 6. In 2014, do you expect to utilise strategies to mitigate currency risk? Less than in % 3% 4% 4% More than in % 28% 25% 35% Same as in % 68% 72% 62% 7. What do you anticipate to be the biggest challenge to mitigating currency risk in 2014? Accuracy/access to timely market data 12% 8% 8% 10% Costs associated with hedging 5% 3% 3% 4% Currency volatility 44% 4 1% 45% 43% Difficulty assessing currency exposure 10% 10% 7% 9% Global economic policy uncertainty 14% 19% 21% 17% Inadequate platform/automated processes 0% 1% 2% 1% Lack of currency expertise/savvy 16% 16% 15% 16% 8. Which of the following best describes how your company will approach mitigating currency risk in 2014? Don t plan to hedge at all 18% 25% 29% 23% Exposure doesn t warrant the cost of hedging 15% 14% 16% 15% Fully hedged to exposure 3% 1% 1% 2% Hedge all meaningful exposure 22% 16% 11% 17% Hope to profit from hedging 3% 6% 4% 5% Not sure 35% 36% 38% 35% Won t hedge due to cost 4% 1% 1% 2% Page 4 of 12

5 9. Which of the below best describes your main consideration when managing currency exposure? Maximizing the opportunity to profit from currency movements 13% 12% 8% 11% Mitigating downside risk while retaining some potential upside if currencies move favorably 21% 25% 25% 24% Reducing, as far as possible, the risk of loss on currency movements 50% 44% 44% 47% Total certainty (as to the exchange rate you will secure) 15% 19% 24% 18% 10.1 What functionality or factors in a global payments platform are most valuable to your company? (Please choose all that apply.) - Customer service No 44% 30% 34% 37% Yes 56% 70% 66% 63% 10.2 What functionality or factors in a global payments platform are most valuable to your company? (Please choose all that apply.) - Currency expertise No 57% 48% 56% 53% Yes 43% 52% 44% 47% 10.3 What functionality or factors in a global payments platform are most valuable to your company? (Please choose all that apply.) - Variety of hedging options No 91% 97% 96% 95% Yes 9% 3% 4% 5% 10.4 What functionality or factors in a global payments platform are most valuable to your company? (Please choose all that apply.) - Holistic currency overview to gauge exposure No 90% 95% 94% 93% Yes 10% 5% 6% 7% Page 5 of 12

6 10.5 What functionality or factors in a global payments platform are most valuable to your company? (Please choose all that apply.) - Transaction speed No 58% 48% 63% 56% Yes 42% 52% 37% 44% 10.6 What functionality or factors in a global payments platform are most valuable to your company? (Please choose all that apply.) - Up-to-date currency information No 59% 53% 54% 55% Yes 41% 47% 46% 45% 10.7 What functionality or factors in a global payments platform are most valuable to your company? (Please choose all that apply.) - Pricing associated with hedges No 86% 95% 88% 90% Yes 14% 5% 12% 10% 10.8 What functionality or factors in a global payments platform are most valuable to your company? (Please choose all that apply.) - Competitive currency rates No 30% 17% 25% 25% Yes 70% 83% 75% 75% 10.9 What functionality or factors in a global payments platform are most valuable to your company? (Please choose all that apply.) - Range of available currencies No 90% 88% 90% 89% Yes 10% 12% 10% 11% What functionality or factors in a global payments platform are most valuable to your company? (Please choose all that apply.) - Safe & secure way to send funds No 45% 37% 43% 42% Yes 55% 63% 57% 58% Page 6 of 12

7 11. In regards to market conditions in 2014, do you expect currency volatility to be? Less than % 16% 6% 12% More than % 25% 30% 37% The same as % 59% 64% 51% 12 How do you expect your levels of international trade to change in 2014? (Please consider any exchange of raw materials, goods, services, etc.) They will decrease 21% 29% 8% 21% They will increase 45% 26% 39% 37% They will stay the same 34% 45% 53% 42% 13.1 If you expect levels to increase, in which markets are you expecting more activity? (Please cite non-domestic markets.) - United States No 51% 49% 48% 51% Yes 30% 25% 23% 26% 13.2 If you expect levels to increase, in which markets are you expecting more activity? (Please cite non-domestic markets.) - Canada No 80% 70% 61% 73% Yes 1% 4% 9% 4% 13.3 If you expect levels to increase, in which markets are you expecting more activity? (Please cite non-domestic markets.) - South America (excluding Brazil) No 79% 68% 64% 72% Yes 3% 6% 7% 5% 13.4 If you expect levels to increase, in which markets are you expecting more activity? (Please cite non-domestic markets.) - Brazil No 80% 71% 68% 74% Yes 1% 3% 3% 3% Page 7 of 12

8 13.5 If you expect levels to increase, in which markets are you expecting more activity? (Please cite non-domestic markets.) - China No 47% 58% 62% 56% Yes 35% 16% 8% 21% 13.6 If you expect levels to increase, in which markets are you expecting more activity? (Please cite non-domestic markets.) - India No 77% 67% 67% 72% Yes 4% 7% 4% 5% 13.7 If you expect levels to increase, in which markets are you expecting more activity? (Please cite non-domestic markets.) - Japan No 76% 70% 65% 72% Yes 5% 4% 6% 5% 13.8 If you expect levels to increase, in which markets are you expecting more activity? (Please cite non-domestic markets.) - Asia (excluding China, India & Japan) No 70% 62% 61% 65% Yes 12% 12% 9% 12% 13.9 If you expect levels to increase, in which markets are you expecting more activity? (Please cite non-domestic markets.) - Australasia No 71% 66% 64% 68% Yes 11% 8% 7% 9% If you expect levels to increase, in which markets are you expecting more activity? (Please cite non-domestic markets.) - Africa No 79% 70% 66% 73% Yes 3% 5% 5% 4% Page 8 of 12

9 13.11 If you expect levels to increase, in which markets are you expecting more activity? (Please cite non-domestic markets.) - Western Europe No 66% 28% 36% 45% Yes 16% 46% 35% 32% If you expect levels to increase, in which markets are you expecting more activity? (Please cite non-domestic markets.) - Eastern Europe No 78% 62% 67% 71% Yes 4% 12% 4% 6% If you expect levels to increase, in which markets are you expecting more activity? (Please cite non-domestic markets.) - Russia No 80% 72% 69% 75% Yes 1% 3% 2% 2% If you expect levels to increase, in which markets are you expecting more activity? (Please cite non-domestic markets.) - Other No 76% 70% 67% 72% Yes 5% 4% 4% 5% 15.1 Please rank the following challenges in conducting international business from most significant to least significant. - Currency risk 1 49% 32% 40% 41% 2 18% 16% 12% 15% 3 11% 11% 10% 11% 4 9% 11% 10% 10% 5 4% 15% 8% 9% 6 4% 6% 9% 6% 7 2% 6% 7% 4% 8 3% 3% 3% 3% Page 9 of 12

10 15.2 Please rank the following challenges in conducting international business from most significant to least significant. - Making/receiving payments 1 7% 13% 12% 11% 2 18% 23% 29% 23% 3 13% 17% 12% 14% 4 15% 16% 9% 13% 5 14% 6% 11% 11% 6 12% 10% 9% 10% 7 12% 7% 10% 10% 8 10% 7% 6% 8% 15.3 Please rank the following challenges in conducting international business from most significant to least significant. - Due diligence 1 4% 5% 6% 6% 2 10% 8% 7% 9% 3 22% 16% 18% 18% 4 12% 13% 17% 14% 5 17% 24% 17% 18% 6 18% 19% 15% 18% 7 8% 8% 15% 10% 8 9% 8% 6% 8% 15.4 Please rank the following challenges in conducting international business from most significant to least significant. - Language barriers 1 2% 2% 2% 2% 2 3% 10% 3% 6% 3 5% 5% 7% 5% 4 12% 10% 9% 11% 5 11% 8% 10% 10% 6 16% 12% 18% 15% 7 19% 20% 23% 21% 8 32% 32% 28% 30% Page 10 of 12

11 15.5 Please rank the following challenges in conducting international business from most significant to least significant. - Legal/regulatory differences 1 4% 4% 8% 5% 2 6% 12% 10% 9% 3 9% 13% 15% 13% 4 16% 12% 14% 14% 5 20% 16% 12% 17% 6 18% 20% 23% 19% 7 18% 18% 13% 17% 8 9% 5% 4% 6% 15.6 Please rank the following challenges in conducting international business from most significant to least significant. - Finding the right suppliers/customers 1 25% 35% 18% 26% 2 20% 12% 18% 16% 3 12% 21% 13% 15% 4 13% 10% 17% 13% 5 9% 8% 11% 11% 6 9% 6% 6% 7% 7 7% 5% 8% 7% 8 6% 3% 8% 5% 15.7 Please rank the following challenges in conducting international business from most significant to least significant. - Logistical challenges (shipping, etc.) 1 5% 8% 9% 7% 2 20% 15% 15% 17% 3 20% 10% 17% 16% 4 16% 19% 18% 17% 5 12% 10% 18% 13% 6 7% 11% 7% 9% 7 15% 21% 7% 14% 8 5% 6% 9% 6% Page 11 of 12

12 15.8 Please rank the following challenges in conducting international business from most significant to least significant. - Tax 1 3% 2% 5% 3% 2 5% 4% 6% 5% 3 9% 7% 8% 8% 4 9% 8% 5% 8% 5 13% 12% 11% 12% 6 15% 15% 13% 14% 7 20% 15% 17% 17% 8 27% 37% 36% 33% 16. Would you recommend AFEX to other businesses in your industry? No 3% 1% 2% 2% Yes 97% 99% 98% 98% Page 12 of 12