07
Industry Analysis

Automotive
Aviation
Capital Goods
Commercial Real Estate
Consumer and Retail
Energy, Oil and Gas
Healthcare
Materials
Metals and Mining
Telecommunications
Transportation and Logistics
Utilities

Automotive Industry Analysis

The Autos industry remains challenged by an ever-increasing cost structure due to trade conditions and to the efforts of transitioning towards new energy vehicles. Sizeable write offs and strategic changes among Western OEMs have led to significant restructuring expenses, which will continue to weigh on profitability. Asian corporates are not immune by macro dynamics and are planning ambitious expansion plans which will require new investments.

It is not a surprise therefore that our survey highlights:

Political and tariffs risks as top of mind for treasurers in the space. To counter these uncertainties and continue investments in capex, corporates remain focussed on cash flow generation and prioritise working capital minimisation, FX and interest rates risk management as key tools to counter the difficult external environment.
As a truly global industry, corporates are among the most exposed to the China market and to renminbi from a revenues and cost perspective, while local debt funding is relatively low for the time being.
As uncertainties in the year are further exacerbated by the Iran conflict, treasurers in the sector need to remain laser focused on risk management and cash flow generation as investments and competitive pressure put pressure on earnings.

Aviation Industry Analysis

Airline treasurers remain firmly anchored in a risk‑management mindset, with commodity and rates exposure, along with managing upcoming maturities and safeguarding credit profiles continuing to dominate treasury agendas. Heightened political uncertainty and macro volatility are reinforcing a cautious financial posture

Airlines globally are raising fares and fuel surcharges in response to significant fluctuations in oil prices as a result of the Iran war. Concurrently, most airlines are revising their cost of capital assumptions and strengthening volatility buffers to adapt to current financing and risk conditions.

Liquidity strategies across the sector are reaching a steady-state equilibrium, with most airlines choosing to maintain their current liquidity levels. At the same time, there will be continued efforts to strengthen liquidity by improving working capital efficiency.

Capital structure decisions continue to reflect a disciplined and credit‑aware philosophy. Appetite for higher leverage remains limited, and any debt raising are expected to be selective and strategic, primarily aimed at supporting growth while diversifying funding mix and lowering cost of capital.

ESG & Transition remain a focus, with most airlines striving to be a leader and early adopter of emerging best practices. Majority of airlines intend to maintain or increase their net zero ambitions, along with capex in green and energy transition projects in 2026.

Capital Goods Industry Analysis

Balance sheet discipline is helping the sector navigate geopolitical uncertainty. With geopolitics cited as the sector’s top risk, companies are staying measured on debt issuance and capital allocation while maintaining stable liquidity levels.

Greater use of local funding could strengthen balance sheet resilience. Despite significant RMB cash flow exposure, the sector makes limited use of RMB debt, suggesting continued reliance on parent funding for China operations.

The sector is already ahead on sustainability management, but further ESG investment appears limited. While it leads peers on sustainability adoption, the sector currently shows little intention to raise ESG ambitions or
related capex.

Commercial Retail Estate Industry Analysis

After a prolonged period of volatility, credit conditions have stabilised reflecting interest rate cuts, lower re-financing risk and rental resilience. With valuations steady, rents are expected to increase in 2026 only moderately as indexation tailwinds subside and transaction activity recovers, underpinned by capital recycling as corporates rotate portfolios.

Amid this backdrop, our survey results highlight:

Both political risks and softening consumer confidence as key threats to the baseline. This recently manifested in the context of the ongoing Middle East conflict, with the real estate sector particularly vulnerable to slower transaction volumes and softer pricing.
Issuers with near-term debt maturities will be particularly impacted, in-step with several respondents highlighting re-financing plans, rates and FX as key priorities.
Ultimately, whilst debt raised will likely be put to work for growth investments, leverage neutrality is a key priority for 2026 aided by operating income growth.

Whilst 2026 brings up new challenges, balance sheets are better positioned today than in recent years.

Consumer and Retail industry analysis

Consumer confidence remains the primary risk for the sector, now further exacerbated by the political backdrop and ongoing tariff uncertainty - reinforcing the importance of balance‑sheet resilience.

In response, companies are increasingly looking to diversify suppliers and optimise working capital as core mitigation tools.

Despite the volatile environment, many Consumer & Retail corporates expect indebtedness to increase in 2026, with proceeds primarily deployed toward growth initiatives, including capex and selective M&A, as businesses reposition for the next phase of growth.

Energy, Oil and Gas industry analysis

Corporates have enjoyed a prolonged period of strong commodity prices and cash flow generation in recent years but highlighted political turmoil as a key risk for 2026. Within the first quarter of the financial year, this has been compounded by the ongoing Middle East crisis. The Straight of Hormuz, a global energy chokepoint carrying 25% of global seaborne oil trade and 20% of global LNG trade, has faced closed periods causing widespread supply and market disruption. Commodity prices are supportive at present, but a prolonged conflict without a sustainable peace deal could impact volume flows and heighten physical risk for NOCs and international partners who share volume interruptions, force majeure risks and possible remedial capex outlays.

Our survey results highlight:

Capital structure strategy remains largely defensive for the sector with a focus on maintaining working capital and liquidity whilst deploying surplus capital to growth led investments.
Some of the biggest risks include headwinds from FX, working capital, particularly for companies with significant trading exposure, and ultimately managing an evolving credit story with investors and rating agencies.
Despite energy security remaining in focus, green or energy transition related capex is expected to be maintained this year in the capital allocation framework.

Whilst 2026 brings up new challenges, balance sheets are calibrated to
navigate risky waters.

Healthcare industry analysis

Political risk remains the primary concern for the sector - perhaps unsurprising given the continued uncertainty around pricing and regulation in the US.

Against this backdrop, improving working capital and cash management has emerged as a top priority for treasury teams, with a clear emphasis on preserving liquidity and maintaining balance‑sheet flexibility.

Looking ahead, healthcare corporates expect indebtedness to increase, with debt proceeds largely earmarked for greater investment, particularly in M&A, as companies pursue scale, portfolio optimisation and pipeline growth.

Material industry analysis

Geopolitics and consumer confidence are the top risks for the Materials sectors. Despite this, the uncertain landscape has not stopped the sector from increasing its capital allocation to debt-funded investments in the next 12 months.

The sector is more exposed to RMB cash flows than any other sector, implying a greater reliance on Chinese market and supply chain. The sector is also significantly exposed to RMB debt, suggesting a gradual shift towards a ‘China-for-China’ strategy, which could potentially help mitigate risks from US-China tensions.

As a hard to abate sector, the materials sector is in a more nascent phase of its sustainability journey. While it has increased its net zero and ESG ambitions, it has yet to commit to an increase in transition related capex.

Metals & Mining industry analysis

Spilling over from last year, investment momentum continues to be shaped by structural supply challenges, high commodity prices and demand for critical minerals. M&A activity surged in 2025 to levels not seen since in over a decade, although this has been funded responsibly utilising shares as the primary acquisition currency with limited cash or debt. This momentum is expected to continue this year, particularly for prized copper assets that face broadly steady demand but limited supply. Shareholder returns have been on the rise, as corporates utilised cash flow linked policies to deploy capital surplus from record high commodity prices, but this also provides some dry powder for any downcycle.

With this context, miners responding to our survey flagged:

Political and tariff risk as primary threats to the base line, highlighting concerns about the impact to profitability from upward pressure on cash costs.
Logically, respondents said key capital structure priorities include focus on
re-financing plans, capital allocation priorities and commodity price or FX risk management.
Ultimately, whilst debt raised will likely be put to work for growth investments, median leverage is expected to decline across sub-sectors, potentially providing a runway for larger greenfield projects to be approved funded by tactical debt raise.

Whilst 2026 brings up new challenges, balance sheets are poised for the next growth cycle.

Telecoms industry analysis

Following years of sizeable investments, capital allocation priorities for telecom have shifted in 2024 and 2025 as capex reduced significantly; our survey confirms that 2026 is expected to continue in the same direction.

Telco highlights from the survey include:

Change in capital allocation is allowing corporates to re-focus on improving their cost of capital and returns on investments.
Debt and working capital management are highlighted as two of the key areas of focus to achieve these objectives, with lower cost of funding a target of treasury teams.
As relatively stable businesses, political and inflation risks remain top of mind for treasurers; as a result, there continues to be a focus on risk management strategies, with FX management a core priority.

Transportation & Logistics industry analysis

Political and trade‑related risks remain front of mind for the Transport and Logistics sector, reflecting its direct exposure to geopolitical fragmentation, tariffs, and shifting trade corridors. Given the Iran war and concerns around the Strait of Hormuz, the survey highlights a sector operating at the nexus of global disruption, where treasury decisions are increasingly shaped by external shocks rather than purely cyclical factors.
From a treasury standpoint, the focus is squarely on interest rate risk management, upcoming maturities and capital allocation.
While overall indebtedness is expected to remain broadly stable, any debt raising are expected to be selective and strategic, primarily aimed at supporting growth and lowering cost of capital.
Any surplus liquidity will either be deployed for debt reduction or maintaining on the balance sheet as downside protection.

Utilities industry analysis

With shifting rhetoric around sustainability, it is unsurprising that geopolitics is the top risk for the Utilities sector, adding a layer of uncertainty around how regional sustainability policies are shaped.
Despite this, Utilities is the only sector still increasing both sustainability ambition and green capex. To achieve this, the sector will pursue a debt funded growth with an increase in capital allocation towards investments in the coming year.
Return discipline is shaping how the second funds the transition. With closer scrutiny on project returns versus capital costs, the sector is relying more on Chinese suppliers, as seen in rising RMB cost exposure, to help improve
project economics.