ECONOMIC CONDITIONS SNAPSHOT

DEBMALYA KHAN

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Nearly 70% of the companies say that they have seen their profits fall as a result of global turmoil

Negative impact on most of the company’s profits over the past six months

Main cause of lower profits is the lower spending of consumers and other businesses

China- reduced costs- Change is a response to lowered profits or a cause of it

Companies planning for external financing for need for cash

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PURPOSE FOR SEEKING FUNDING

To increase our available cash

To redefine existing debt

To pay for new initiatives ( e.g.. Geographic expansion , innovation )

To repay regular operating expenses

Others

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OPPORTUNITY IN TURMOIL

27% of the companies say that they are considering developing new products and meet new customer demand

20% companies entering new markets

One main reason- sound financial base – 44% have been making steady profits since the last six months.

Mostly North American companies better off than the those in the rest of the world

Smaller and private companies

– looking more stable than larger and public ones

– Fewer instances of negative impact on profits

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NEGATIVE IMPACT ON TRENDS

Stalled markets, high costs of credit, low market liquidity, low asset price

Increases market volatility

High Government regulations and increased activity in the financial sector

Widespread negative impact of the Global turmoil

Companies have become less risk averse

Significant restructuring of companies including consolidation

Little geographic or social backlash against the free market system