NEW YORK, July 28 U.S. companies raised more cash in the second quarter than they did in the first quarter but they expect the buildup to fade, a survey by the Association for Financial Professionals released on Monday showed.
The Washington-based group, which represents corporate treasurers worldwide, said its index of quarterly cash holdings rose to 12 points in the latest quarter from 4 in the previous quarter, due to stronger operating cash flows. The index was 12 for the same quarter in 2013.
A measure of how aggressively treasurers invest cash fell from 10 points to 2, matching the level set in the third quarter of 2013.
This signals that "companies had become more conservative in their short-term investments, or that they were becoming more restrictive in selecting among short-term asset classes and credit qualities," the group said in a statement.
The survey's forward indicator suggested treasurers expect a slower rate of increase in cash holdings. The indicator fell 2 points to 10 in the latest quarter.
The slower pace of cash accumulation would come after the U.S. Securities and Exchange Commission opted for moderate reforms of the $2.6 trillion money-market fund industry last Wednesday.
"Uncertainty around money-market mutual funds has finally settled and corporate treasurers can move on," Jim Kaitz, AFP's president and chief executive, said in a statement. "Businesses are moving their cash to other ultra-safe short-term investment vehicles as they seek opportunities to deploy their investment holdings."
A separate survey from the group released earlier this month showed 52 percent of U.S. corporate cash was kept in bank accounts, which was the highest level since the group began tracking the data annually in 2006. Roughly 23 percent of corporate cash was maintained in money market funds or U.S. Treasuries securities. (Reporting by Richard Leong; Editing by Peter Galloway)