I am writing at the end of a a week that saw Microsoft found guilty of violating anti-trust laws, and, given this predicted ruling, a surprisingly strong downward correction in dot.com, technology, media and telecoms stock prices. The week also saw the collapse of merger talks between Deutsche and Dresdner banks, the closure of 171 local branches of Barclays Bank and disruption to the Stock Exchange order processing system that delayed the opening of the market to 3.45pm on the most important trading day of the year. These events highlight the fact that the treasurer continues to operate in a world of unpredictable risk. Increasingly, commercial reality for our operations are now located in a virtual world. There are no proven business models to measure shareholder value in this new environment. Companies involved in e-commerce activities may require significant capital to invest in advertising campaigns in order to attract customers to their websites. We are told that bankers and investors are evaluating the financial viability of these new ventures in terms of the rate at which they ‘burn’ capital in excess of revenue generated. Despite the risks involved, the explosive growth in the online business-to-business and business-to-consumer markets will provide rich rewards for the right investments. Project finance, the subject of our Spotlight this month, is another market that challenges both the treasurer and the banker to determine the most appropriate financing structure to balance technical, commercial and political risk against reward. However, in contrast to many e-business investments, funds are usually lent on the understanding that the project is expected to produce a strong cash flow sufficient to repay the initial capital outlay within a defined period of time. Additionally, investors may take comfort from the fact that they have taken security over tangible assets created during the lifetime of the project. Our IT section this month is, unsurprisingly, focused on e-business. Norbert Wanninger from Deutsche Bank discusses developments in e-commerce and Geoffrey Timms from Burns E-commerce Solutions provides advice for treasurers on implementing an e-business strategy. Our international section on the US also provides coverage of matters e-. In separate articles, Susan Webb from Chase and Peter Hohenstein of Bank of America provide their own views of how the internet will develop. Emma Lubbock brings us up to date with US tax shelter regulations and she also discusses the recent UK Budget proposals to change the rules for controlled foreign companies of UK companies. Finally, an expert panel from Salomon Smith Barney updates readers on the latest developments in US capital markets. CAROLINE SHUFFREY
