The economy and the stock market: views of financial executives.

• Author: Deitsch, Mimi

The economy and the stock market: views of financial executives Are financial executives concerned about the economy? What are their views on the current stock market? A survey of Financial Executives Institute members conducted at the request of the New York Stock Exchange revealed some surprising concerns.

Survey questionnaires were sent to 2,000 FEI members, with 346 (17 percent) responding within the two-week period allowed. Another 149 responses were received after the April 3, 1990, deadline and were not included in the tabulation. Respondents came from companies of all sizes, both publicly traded and private, located throughout the United States.

Over 78 percent of the respondents were financial officers; the remainder held positions of chief executive officer, president, vice president, or owner/partner. Just over 40 percent were employed by manufacturing firms, 11 percent were from transportation, communication, or public utility companies, and 8 percent were engaged in wholesale or retail trade. Slightly less than 8 percent worked for banks, and only 3 percent were employed by security or commodity brokers or dealers.

Concerned about ethics

Ethics were high on the list of respondents' concerns. Asked to express the amount of concern they had about 14 economic conditions and investment trends, on a scale of one to five, with one indicating the least concern and five the greatest, respondents indicated the most concern with the ethics of the securities markets. Nearly three-fourths were concerned about insider trading, 73 percent were concerned about fraud and abuse in the marketplace, and 71 percent were concerned about the honesty and ethics of stock brokers.

Program trading was also ranked of high concern by 72 percent of the respondents, followed by leveraged buyouts 69 percent), junk boards (63 percetn), and volatility of the securities markets (62 percent). Less than half were concerned about bankruptcies, inflation, unrest and crises in other parts of the world, interest rates, or recession.

Interestingly, while 69 percent of the respondents were concerned about leveraged buyouts, the respondents were least concerned about mergers and acquisitions. Does this presage a return to well-thought-out, strategic acquisitions, arranged with substantial equity or exchange of stock?

What about the stock market?

Nearly three-fourths of all respondents said they had concerns about the current stock market. Asked to identify their...