Kari Makela of Afp Exchange writes, With the rapid growth of new financial services and opportunities, companies must consider the company-wide exposure of a portfolio, across many types of instruments, including hedges, collaterals and netting agreements. In addition, these measures can substantially strengthen the balance sheet and thus allow companies to borrow at a cheaper rate or issue more expensive stock. Treasurers must also take into consideration the huge impact of electronic trading. It is the company s common stock, however, which is of outmost interest to online traders. They are an integrated part of the seemingly never expiring bull-market.
Amateur investors are now able to buy and sell stocks without contacting a broker.
This has in turn led to increased bargain hunting and extreme market speculation. Accordingly, almost every day we observe some company s stock plunging because its earnings landed a couple of pennies below the consensus. As we know, it is in the interest of the treasurer to manage a company in strong financial position when issuing new common stocks or corporate bonds. The electronic trading and electronic news dissemination makes this quite a delicate task, however, because the treasurer must deliver data of great quality through the enormous quantity of information readily available. By providing a means for natural buyers and sellers to meet without a market intermediary, electronic trading technology has a great potential to disintermediate markets.