denotes premium content | Dec 5 2008 Trade & Forfaiting Review magazine archive
Volume 12 Issue 1
- Editor's letter: Real banking and real rewards
The definition of an optimistic investment banker, according to a joke currently doing the rounds, is one who irons five shirts on Sunday night. Yet for trade finance professionals, the challenge is simply finding the time to do the ironing...
Volume 11 Issue 10
- Editor's letter: Georgian affairs
The sudden eruption of conflict in Georgia over South Ossetia highlights how volatile our world can be – and how vulnerable trade and economic life can be in particular.
Volume 11 Issue 9
- Editor's letter: Pay day
National newspapers in the English-speaking world are full of doom, gloom and economic disaster. Banks are ‘downsizing’, liquidity will remain curtailed for two or three years and inflation is eating away at people’s wages, which are barely rising, if at all.
Volume 11 Issue 8
- Editor's letter
The average reader of Trade & Forfaiting Review probably does not need to keep as close an eye on the weekly grocery bill as the average man or woman in the street.
Volume 11 Issue 7
- Editor’s letter: Due credit?
When does an irrevocable letter of credit (LC) become revocable? The answer, it seems, is when a court judge says so.
Volume 11 Issue 6
- Editor's letter: Changing fashions
How quickly fashions can change. This time last year, export finance was in the doldrums – some banks (especially in the UK) were even eschewing the business because it drummed up so little trade – while biofuels were a no-brainer investment.
Volume 11 Issue 4
- Editor's letter: Winners and losers
The judging for TFR’s Deals of the Year was arguably the most challenging we’ve ever done: it was a busy year and never before have there been so many deals struck, nor for so much.
Volume 11 Issue 2
- Deals, deals, deals
The end of the year is always a busy time, but this year is busier than most, it seems. With the credit crunch suddenly and unexpectedly draining the market of liquidity, combined with the uncertainty wrought by the nose-diving dollar, many companies have turned – or returned – to structured trade finance as an alternative means of ensuring cash flow.
Volume 11 Issue 1
- Editor's Foreword
Another month, another editor. This time, however, it’s permanent. It’s my very great pleasure to be the new editor of Trade & Forfaiting Review and in a short time, I’ve already learned a great deal from catching up with editorial board members, as well as talking to readers.
Volume 10 Issue 10
- Foreword
This month, in the run up to IFA , I have been fortunate enough to babysit Trade & Forfaiting Review and gain a real insight into the challenges faced by those working in what is probably one of the world’s most fast-moving, exciting industries.
Volume 10 Issue 10
- TFR Awards 2007
This year, we devoted an entire issue to the TFR Awards 2007. Why? Because they are so eagerly awaited, so well-respected and provide such a great snapshot of the state of the industry. Find out about all the winners - and what put them on the winners' rostrum - here.
Volume 10 Issue 8
- Editor's letter
Ten years ago this month saw the start of the Asian financial crisis in Thailand, Indonesia and South Korea, followed by the subsequent global crisis with the collapse of the Russian rouble and the Brazilian real. According to some commentators, many of the market characteristics in place today are similar to those seen in the lead-up to the 1997 crisis.
Volume 10 Issue 7
- Editor's letter
Trade & Forfaiting Review has been in Miami this month, firmly ensconced in the Four Seasons Hotel, Brickell Avenue, where we have been attending the tenth annual Association of Trade & Forfaiting in the Americas conference. The event takes place in Miami each year, though the jury is out on where it will be staged in 2008 – ATFA members are considering a change of venue so a Latin American city could be on the cards next time round.
Volume 10 Issue 6
- Editor's letter
Fuelled by high oil prices, the global wave of liquidity that has swept the Gulf region of late has given rise to unprecedented opportunities for trade financiers in the Islamic finance market...
Volume 10 Issue 5
- Editor's foreword
In our cover story this month, Trade & Forfaiting Review looks to the East with a focus on Japanese trade and commodity finance banks (‘Due West’). While, historically, these banks have focused more on their domestic clients, Erika Morphy discovers they are increasingly targeting trade flows beyond this remit. The larger institutions – Bank of Tokyo-Mitsubishi UFJ, SMBC, Mizuho et al – are leveraging their existing client base to reach out to non-Japanese contacts as they set their sights westward, tapping new markets, providing new products and extending their global footprint.
Volume 10 Issue 4
- Editor's foreword
The annual ‘Deals of the Year’ issue is always a tough nut to crack. And this year has been no exception. Just as the process of closing a deal can try the patience of even the most seasoned of bankers, so it is with selecting the best of the year’s transactions. That said, as with many lengthy and oftentimes painful experiences, the rewards are there to be seen in the end.
Volume 10 Issue 3
- Editor's foreword
Although this issue has traditionally devoted itself to a retrospective look at the past twelve months in trade, this year we glance to the future with an analysis of where the markets are headed over the coming year.
Volume 10 Issue 2
- Editor's foreword
With the submission deadline for the best deals of 2006 upon us, Trade & Forfaiting Review is keen to hear your suggestions for which transactions deserve an award...
Volume 10 Issue 1
- Editor's letter
Attending the International Forfaiting Association’s annual conference for the first time, as I did in Istanbul last month, turned out to be a wise move. Widely acclaimed as the best event so far, the three-day extravaganza was well attended and the perfect initiation for a virgin attendee...
Volume 9 Issue 10
- Editor's letter
There has been much speculation about the future role of forfaiting in recent years: some of it positive, but much of it doom-ridden. Yet the market has fought back and we’re beginning to see a new sense of optimism as the industry starts to look beyond traditional forfaiting transactions and open itself up to new business lines. Many are doing this by expanding their activities to include new paper and new trade finance products...
Volume 9 Issue 9
- Editor's letter
In this special edition of Trade & Forfaiting Review (TFR), we devote our cover story to the leading lights of trade finance with our third annual awards issue 2006. Congratulations to the winners and the highly commended. And thanks to all our readers who took the time to vote.
Volume 9 Issue 8
- Editor's letter
This month Société Générale Cross Asset Research released a report forecasting the end of the ‘commodities bubble’. The report states that while an analysis of the fundamentals may partially justify the bull trend in commodities since 2002, it does not explain the acceleration in prices since late 2005.
Volume 9 Issue 7
- Editor's letter
Many financiers believe Basel II is unlikely to improve the risk landscape. They argue it will only ‘appear’ to be improved as banks seek to conform to its requirements. In reality, they say, additional risks – notably operational – will ultimately arise from compliance. One source close to the market believes Basel II has no place in the commodity finance/structured trade market. “Most defaults are caused by fraud. The more remote ops people are from the deal itself, and the less experienced they are, the harder it will be to avoid it [fraud].”
Volume 9 Issue 6
- Editor's foreword
China and India are often bundled together when discussing shifts in global trade patterns: their incessant demand for commodities, for example, has driven up prices and stoked fears of world shortages in some categories, such as oil. In other ways, though – namely export flows and related financial structures – the two countries could not be more different.
Volume 9 Issue 5
- Editor's Foreword
A recent report by Barclays Capital shows 93% of investors plan to move funds into commodities over the next three years. Yet further evidence of the growing shift away from traditional paper investments, such as stocks, shares and bonds, towards commodities as an asset class – a trend that has been quietly building among institutional investors.
Volume 9 Issue 4
- Editor's foreword
When is a deal a ‘good’ deal and when is it ‘exceptional’? This is the question that faced the panel selecting Trade & Forfaiting Review’s 2005 Deals of the Year. Among the multitude of nominations submitted were many ‘firsts’: first time bringing a certain borrower to market; first time the final take exceeded $2bn; first syndicated financing of a particular commodity; first deal consecrated between the various parties. And not for the first time, the selection process presented a challenge.
Volume 9 Issue 3
- Editor's foreword
What a difference a year makes. Twelve months ago Trade & Forfaiting Review (TFR) covered the Deutsche and ING-led $45m syndicated loan to Ukrsotsbank – the joint largest syndicated loan made to a Ukrainian bank at the time. A consortium of international lenders signed the deal on 14 November 2004, but later delayed drawdown over fears of political unrest following Ukraine’s November 2004 rigged presidential elections. This year it’s a whole different story.
Volume 9 Issue 2
- Editor's Foreword
Increasing competition from the private sector and reduced margins have prompted export credit agencies (ECAs) to reexamine their position in the export-finance market. With the private market demonstrating a greater appetite for political risk and a willingness to finance medium term, and in some instances, long term, many ECAs are feeling the squeeze...
Volume 9 Issue 1
- Editor's Foreword
On 22 September 2005, former Yukos CEO Mikhail Khodorkovsky had his appeal against convictions for tax evasion and fraud quashed. A day later, the jailed oil tycoon’s Canadian defence lawyer, Robert Amsterdam, was ordered to leave the country when a group of Russian ‘officials’ visited his Moscow hotel room in the early hours of Friday 23 September.
Volume 8 Issue 10
- Editor's foreword
This summer Trade & Forfaiting Review (TFR) has been busy with the launch of the Global Contacts Directory 2005/6. We’ve also given the magazine a mini-makeover. The emphasis has been placed on readability and a more dynamic aesthetic, which we hope will make for a more pleasurable TFR experience. The redesign of our news pages, for instance, will enable us to carry more photos of the people we’re covering.
Volume 8 Issue 9
- Editor's foreword
Welcome to Trade & Forfaiting Review’s (TFR) second annual awards issue, where we devote our cover story to the top trade-finance names of 2005. Congratulations to the winners and the highly commended. And thanks to all our readers who took the time to vote.
Volume 8 Issue 8
- Editor's foreword
Record high commodity prices and the pressures of Basel II are reshaping the commodity-finance world. In fact, the impact is such that some market watchers are predicting the emergence of a new super league of commodity-finance banks...
Volume 8 Issue 8
- Editor's foreword
Record high commodity prices and the pressures of Basel II are reshaping the commodity-finance world. In fact, the impact is such that some market watchers are predicting the emergence of a new super league of commodity-finance banks...
Volume 8 Issue 7
- Editor's foreword
While the US has its ‘democratic’ eyes set firmly on the Middle East, it runs the risk of letting things slip closer to home. Deteriorating trade relations with Venezuela are a case in point. With one of the world’s largest known oil deposits, Venezuela is a country the US should be keen to keep sweet. But by taking its eye off the ball, it has opened the door to China, which has seized the opportunity to secure another market to meet its growing energy needs...
Volume 8 Issue 6
- Editor's foreword
Trade financiers are having to look beyond the lines of what traditionally constituted ‘trade finance’ and look to other disciplines such as insurance and capital markets. As in any business, the market dictates the way ahead. And for trade-finance banks, this means offering a range of hybrid solutions that provide flexible products that can satisfy client needs. Consequently, trade finance is developing into a dynamic operation that accesses tools across many business lines, including FX, credit and interest-rate derivative products. At the same time, hedge funds are starting to fulfil a more important support function.
Volume 8 Issue 5
- Editor's foreword
Not so long ago, Russia looked set to overtake Saudi Arabia as the world’s largest exporter of oil. It didn’t happen. Or, rather, it hasn’t happened yet. The mess that ensued following the Russian government’s break-up of Yukos has led to a slowdown in foreign investment in the sector as financiers step back to see how events play out. Putin’s interference in the former oil giant’s fortunes was also one of many factors that contributed to the global oil price hike in 2004.
Volume 8 Issue 4
- Editor's foreword
Choosing the best deals of 2004 has been something of a challenge. There is no doubt that, from an editorial perspective, it is the most important task of the year. Trade finance is, after all, all about the deals.
Volume 8 Issue 3
- Editor's foreword
As most of you know, Courtney Fingar, Trade & Forfaiting Review’s editor of two years, left the magazine at the end of October to take up a new role covering foreign-direct-investment issues. Courtney did a fantastic job. She set high standards and I’m sure you’ll join everyone at the magazine in wishing her every success in her new post.
Volume 8 Issue 2
- Editor's foreword
The origin of the bonsai tree, illustrated on our cover, is slightly controversial, as most people think it originated from Japan when historians suggest it actually came from China more than 1,000 years ago. Chinese exports have obviously become much bigger business since then and are increasingly directed towards Latin America rather than Japan.
Volume 8 Issue 1
- Editor’s foreword
Trade finance is, of course, all about hedging risk. So commodity-finance bankers are quite accustomed to spreading their risk around the world and avoiding being too heavily exposed to any one market lest it all go wrong. Not that they never get caught out: many Western institutions got carried away in Russia in the 1990s and found themselves in the unfortunate position of having balance sheets awash with Russian risk when crisis struck in August 1998. Few seem poised to repeat this mistake in China despite its rapid growth and insatiable demand for commodities.
Volume 7 Issue 10
- Editor's foreword
It is nearly impossible to have a discussion about the forfaiting industry at present without asking whether it is in fact a dying art. There is a good case that it is: some once-prominent players are effectively exiting the business, even if they won’t go so far as to admit it; those still in the game have downsized forfaiting operations or folded them into broader trade-finance units; volumes are down across the board; and small boutiques are struggling to turn a profit.
Volume 7 Issue 9
- Editor's foreword
Following up on our first “Deals of the Year” issue in February 2004, we now introduce our inaugural awards issue. This is something our readers have requested for quite some time now. Our only hesitation was getting it right; we wanted to use the best method possible to determine the winners. In the end, we decided to go for the simplest – and most democratic – approach: post the ballot on the TFR website, let readers log on to vote and may the best institution win. We made every effort to feature categories that cover the whole spectrum of trade-finance competences, both from a product and geographic perspective.
Volume 7 Issue 8
- Editor’s foreword
Opening up a discussion about trade-finance technology is like opening that proverbial can of worms. Where to start? There are many types of technology, many facets to the subject, many challenges to be dealt with and many complex terms to understand – and just when you feel you’ve got a handle on one aspect, another rears its ugly little head. It’s all difficult enough for your average techie, but for the technophobes among us (hello, forfaiters), it’s enough to make a person nostalgic for the days when a fax machine was the height of technological advancement.
Volume 7 Issue 7
- Editor's foreword
Just before this issue went to press, the powers-that-be at the World Bank and International Monetary Fund (IMF) concluded their annual spring meetings by sending a stern message to Latin America to get its act together once and for all. The prescription included everything from tax and energy reforms to that old favourite, fiscal prudence.
Volume 7 Issue 6
- Editor’s foreword
Collaboration is one of those woolly business buzzwords that can mean anything and nothing at the same time. Most simply, it just means working together. But with whom and how?
With regards to trade finance, it means insurers proving more willing to participate in bank deals (and being asked to do so more often). It means credit insurance being used in innovative ways to supplement capital-market trade transactions. It means the capital markets getting involved with risk mitigation. It means reducing costs and minimising risks in structured trade and commodity finance through co-ordinated support to traders/producers by banks, insurance companies, and through credit support and collateral management.
Volume 7 Issue 5
- Editor’s foreword
Perhaps more than any other region in the world, the Middle East suffers from a slightly unfair risk perception. The wide disparities between the various countries are often overlooked, and geopolitical developments in a handful of Middle Eastern countries often cast a very large shadow over the whole of the region. Of course, it all depends on where you’re coming from; there are different perceptions of Middle Eastern risk in different parts of the world. Sitting in, say, the US, perhaps the whole of the Middle East looks like one big risk. An exporter or financier based in the Middle East itself might be concerned about a couple of countries but is comfortable with most of them. And financial institutions that have a constant focus on the Middle East, like ABC International Bank or Europäisch-Iranische Handelsbank, know the real picture and, thankfully, scare less easily.
Volume 7 Issue 4
- Editor's foreword
Choosing the best deals of the year is difficult. Deciding the appropriate criteria is the toughest part. In the end – if readers will pardon the unseemly comparison – it is much like the US Supreme Court’s famous comment on pornography: it is difficult to define, but you know it when you see it. While creating an exact methodology for choosing the year’s most exciting deals is challenging, some deals are obviously winners, for a whole range of reasons. They can’t all be measured by the same yardstick.
Volume 7 Issue 3
- Editor's foreword
In some ways, this year was characterised as much by what didn’t happen as what did. Certainly, 2003 lacked the trauma of a September 11th or the drama of an Argentine-style default. When it came to forfaiting in particular, what was lacking was volume, continuing the rather unpleasant trend of 2002. Despite signs of recovery in Brazil and some hope that Argentina’s President Nestor Kirchner can set his country on the right track, Latin America is still a bit shaky and it looks like it will be quite some time before Argentina can post the big numbers and provide reliable business for forfaiters and other trade financiers.
Volume 7 Issue 2
- Editor's foreword
If the 20th century was the American century, the 21st century, it is believed, will be dominated by China. Indeed, the numbers tell quite a story: 8.2% GDP growth in the first half of this year, US$33.35bn of foreign direct investment in the first seven months of the year, a US$8.9bn trade surplus in the first eight months, a current US$103bn trade surplus with the US, and US$298bn in foreign-exchange reserves. China is now the world’s second largest economy, measured in purchasing-power parity.
Volume 7 Issue 1
- Editor's foreword
Most news coming out of Russia these days is good. A few high-profile investments by Western energy companies have been reported recently. Royal Dutch/Shell said it would invest US$1bn in Russia’s Salym field with its partner Sibir Energy, and the investment is going ahead even though the company failed to win the tax breaks it wanted. ExxonMobil and ChevronTexaco are reportedly interested in taking a 25% stake in Yukos-Sibneft. Earlier this year BP agreed to a partnership with TNK, striking the largest corporate energy deal in Russia, and Shell got the green light to develop Sakhalin II, clearing the way for the single largest direct investment in the country at US$10bn. And in the capital markets, Gazprom’s £1bn bond, the largest euro deal by an emerging-market corporate issuer, was well received.
Volume 6 Issue 10
- Editor's foreword
Industry players, forfaiters in particular, frequently tell me that they are tired of gushing profiles and fluff pieces in the trade-finance trade press – they want a realistic, warts-and-all depiction of the market. Most of all, they want to know, as one forfaiter told me recently, “who’s doing what to whom”. But passionate feedback from a recent controversial item in our newsletter suggests that readers both welcome and fear daring, critical news coverage.
Volume 6 Issue 9
- Editor's foreword
With structured trade finance’s Russian heyday seemingly drawing to a close, many trade financiers are casting a cautious yet interested eye towards Latin America – even those who might have thought “never again” after the most recent Argentine fiasco. For all its warts, the crisis-prone region is indeed tempting and, due to Latin America’s short economic cycle, investors typically forgive and forget its follies a bit easier than those of, say, Asia. The problem is, at the first hint of trouble, they tend to rush out again as quickly as they rushed in.
Volume 6 Issue 8
- Editor's foreword
As this issue went to press, Romania received some good news from the European Union when enlargement commissioner Guenter Verheugen said the country could conclude accession talks by the end of October 2004 and expressed optimism that it could join the union by 2007.
Volume 6 Issue 7
- Editor's foreword
Our focus this month is vibrant, fascinating and rapidly changing India. Since its makeover as a free-market economy in 1991, India has made noteworthy progress in liberalisation.
Volume 6 Issue 6
- Editor's foreword
Volume 6 Issue 5
- Editor's foreword
Volume 6 Issue 5
- Editor's foreword
Volume 6 Issue 4
- Editor's foreword
Having been back at the office for nearly a fortnight, I think most of us would agree that the Christmas festivities seem a world away. I’d like thank all of you who were kind enough to send Trade & Forfaiting Review cards and gifts. In particular, a big nod to the sender of a certain guide to London restaurants, as well as to an e-commerce solutions provider that couldn’t go wrong with chocolates.
Volume 6 Issue 2
- Editor's foreword
Our focus for the November issue of Trade & Forfaiting Review is the exciting developments in China, where economic advancement has been linked to a shift towards a market economy in many goods and services, as well as openness to global trade and investment. Meanwhile, accession to the World Trade Organisation (WTO) has initiated a significant new chapter in the process of market reforms.
Volume 6 Issue 1
- Editor's foreword
Welcome to this month’s edition of Trade & Forfaiting Review. In this issue, we shall be looking at the ever-strengthening economy of Russia and some of the business being carried out on the structured pre-export finance side, where tenors have increased to as much as five years.
Volume 5 Issue 10
- Editor's foreword
Welcome to the latest, revamped edition of Trade & Forfaiting Review. The new look reflects the fresh ideas of a new team, which includes publisher Andreas Silbermann, consulting publisher Steven Metcalf and myself as editor. We very much hope you enjoy both the style and content.
