The second possibility is that some firms have been slow to adjust to the new reality of low interest rates. We hear reports that a hurdle rate of return of 13 to 14 per cent has been hardwired into the corporate culture in some companies. Changing this hard-wiring is difficult and time consuming.
However, from our liaison with Australian companies, we do know that some companies have lowered their hurdle rates and this is opening up new opportunities for them. It would be good to hear more such reports.