YEAR OF OPPORTUNITY
Written on the 5 March 2010
OPPORTUNITIES abound in 2010 for companies with liquidity, but those with dwindling cash flow – no matter how great their prospects – face a great regression when it comes to lending. Brisbane Business News tracked down some of the city’s leading finance experts about the year ahead and even let the banks add their five cents.
The old adage that ‘the customer is always right’ will be of great significance this year, particularly as a recent Suncorp survey showed 26 per cent of Brisbane residents are concerned about paying their weekly bills.
To Suncorp bank executive manager Tony Meredith this could translate to lower retail sales, using the analogy of Queensland’s water restrictions to the current financial situation.
“People just didn’t realise how much they were using. Due to the GFC our customers realise that they’re going to have to get by with what they have,” he says.
And for small business the situation looks like something similar. This needn’t mean that funding will be completely dry, but as banks try to boost their involvement in commercial lending amidst an air of conservatism, companies will need to prove their business prospects with money in the bank.
And the growth looks likely to be a trickle, with National Australia Bank (NAB) private wealth manager David Pourre predicting economic growth of 2 per cent.
“Much of that will come through household consumption and construction as well, so lending is going to be crucial for that, and we do expect it to grow in 2010.
“The lesson learned from the financial crisis has been that diversifying your portfolio is going to be crucial to avoid any downside from the market. As for business, there’s going to be opportunity across markets and a lot of large businesses that are well capped may well look at acquisitions.”
NAB claims to have increased its SME lending book by $5 billion last year and Suncorp may claim to offer the lowest small business lending rate in the country, but financial experts are getting mixed messages from the current climate – recovering but reticent, confident but cautious.
Sectors to watch?
Companies to watch?
Where to invest right now?
What to keep an eye on?