The US saw less multinational repatriation than some expected in the first three months of 2018.Bank of America Merrill Lynch analysts expect a portion of the $3.5 trillion in corporate cash abroad to flow back into the US over the coming quarters.
While sweeping changes to the tax system were widely expected to encourage multinational companies to bring cash back to the US, the first fiscal quarter under the policy didn't see as much repatriation as some envisioned.
The tax law's effects are just getting started, according to analysts at Bank of America Merrill Lynch.
They predict repatriation will pick up in the next three months and, in theory, boost the US dollar.
"One of the most contrarian calls we have made this year is that US profit repatriation flows following the recent tax reform will be bullish for the USD," the analysts wrote in a note to clients Thursday.
US companies have about $3.5 trillion accumulated profits abroad today, the analysts noted, and they expect up to 90% of companies they surveyed to repatriate "At least part of" that money.
Under the tax legislation, multinationals have to make a one-off payment on profits socked away overseas - 15.5% on cash holdings and 8% on illiquid investments.
https://finance.yahoo.com/news/bank-america-massive-amounts-overseas-190400035.html
While sweeping changes to the tax system were widely expected to encourage multinational companies to bring cash back to the US, the first fiscal quarter under the policy didn't see as much repatriation as some envisioned.
The tax law's effects are just getting started, according to analysts at Bank of America Merrill Lynch.
They predict repatriation will pick up in the next three months and, in theory, boost the US dollar.
"One of the most contrarian calls we have made this year is that US profit repatriation flows following the recent tax reform will be bullish for the USD," the analysts wrote in a note to clients Thursday.
US companies have about $3.5 trillion accumulated profits abroad today, the analysts noted, and they expect up to 90% of companies they surveyed to repatriate "At least part of" that money.
Under the tax legislation, multinationals have to make a one-off payment on profits socked away overseas - 15.5% on cash holdings and 8% on illiquid investments.
https://finance.yahoo.com/news/bank-america-massive-amounts-overseas-190400035.html
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