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Investment Options in a Low Interest Rate Environment

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by Ben Poole, Ben Poole Editorial Services

One of the well-attended workshops on the second day of the 7th BNP Paribas Cash Management University focused on investment strategies for treasurers in the ongoing low interest rate environment. The workshop featured a corporate case study from Jiameng Teah, senior treasury analyst at Tate & Lyle, as well as comment from panellists Nick Haste, head of corporate deposit line in Europe for BNP Paribas, and Xavier Gandon, money market investments specialist with BNP Paribas Investment Partners.

Corporate Case Study: Tate & Lyle

Giving some background to Tate & Lyle, Teah explained that the company has operations in over 30 countries around the world, with approximately 4,300 employees. The company is headquartered in London and has a market capitalisation of around £3.2bn.

When looking at the company’s investment policy, Teah said that security is the most important variable. The primary objective for the treasury team at Tate & Lyle is to safeguard the value of the investment. Diversification of investments is an important tactic, while the treasury is only permitted to invest in approved counterparties, and even then they must stick to pre-approved investment limits for each counterparty. The treasury team has discretion as to how much they invest with each bank within these limits. Teah said that her treasury team use inputs such as CDS, news stories and equity analyst notes to direct these limits.