denotes premium content | Jan 7 2009 Trade & Forfaiting Review magazine archive
Volume 8 Issue 3
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.
I look forward to continuing her excellent work and to developing TFR’s strong relationship with the trade-finance community. And on a more personal note, I’d like to take this opportunity to thank her for her support over the past few weeks as I’ve settled into my new role.
And so we move on to – or rather look back at – 2004.
In this year-end issue, we review the topics and events that have dominated trade-finance news over the past 12 months. Oil prices rocketed and only recently fell back after reaching record highs in October. Russian banks and corporates remained in the headlines, with Yukos, for instance, in yet more trouble; as TFR went to press, the oil giant had filed for bankruptcy after being hit with new back-tax bills.
China, too, continues to be a hot topic. Our front cover includes a photo of Chinese premier Wen Jiabao arriving in Moscow last September in a bid to secure future supplies of Russian oil for its burgeoning economy. And then there’s the weakened US dollar, hitting record lows across the board. On 2 December 2004 it fell to its lowest level in nearly five years against the Japanese yen, and concern over the US’s huge current-account and budget deficit continues. Also worth mentioning is the recent political unrest in Ukraine following November’s rigged presidential elections; one trade-finance transaction has already suffered the fallout from the political uncertainty it created (see Deals, this issue).
On a lighter note, TFR is currently accepting submissions for the outstanding deals of 2004. Winners will be announced in February, so this is your last chance to nominate. Best of luck to all those in the running. In the meantime, may I wish you a happy and successful 2005.
Michele Martensen, editor
Features
Legal spotlight 2004
There have been some significant legal developments in 2004, both through statutory changes and court decisions, which will impact financiers and other participants in the trade-finance market. Trevor Clark, a partner in the banking practice at Linklaters in London, takes a look at four of these developments and examines how they affect trade finance.
The thrill of the chase
Thin margins, increased competition and fewer transactions have left many structured trade and export financiers aggressively chasing after business in 2004. Consequently, much of the market has been forced to come up with new and innovative financing solutions to stay in the race. Erika Morphy takes a look at recent trends and assesses the challenges ahead.
Higher returns
The commodity-finance market was dominated by price during 2004. While record highs spelt good news for producers, it also led to fewer deals as new banks rushed to enter the market. Erika Morphy talks to some of the key players and discovers that they’re focusing on a lot more than just price issues.
Forfaiting: a dying art?
Despite the gritty determination expressed by many forfaiters, classical forfaiting is fast earning itself a reputation as a dying art. While the industry struggles with exactly how to redefine itself, there is broad consensus that unless it does, the chances of survival are slim. Kathleen Williams speaks to several players about the current situation and what lies ahead.
Regulars
Country Risk Appetite – December 2004
The analysis from Standard Bank London:
Emerging-market debt pricing
Omni Whittington Commentary, November 2004
Arrangers of trade-finance loans by region
The amounts are calculated on an apportionment basis and deals are elgible for league-table credit/inclusion when a loan agreement has been signed and fees (where applicable) are paid. For purposes of clarification, Eastern European borrowers include Russia. Amounts in US dollars.
Personal profile: The young guns of trade finance
There is a perception that trade finance isn’t a young man’s, or young woman’s, game – and it is partly true. Yet a new generation is coming up through the ranks, bringing fresh ideas, a different way of doing business and a more daring approach to risk that might ultimately change the industry. Courtney Fingar reports on the under-35 crowd.
Company profile: Understanding the market
Few banks operating in the trade-finance arena have the local knowledge or the commitment necessary to be successful on transactions in the Arab markets. Few, except Arab Banking Corp perhaps, which has an acute sense of the region and its risks. Amr El-Ashmawi, head of ABC’s trade-finance and forfaiting division in Bahrain, talks to Courtney Fingar about plans to develop this expertise.
60-second interview: Gregory Bernardi
It has been over a year since FimBank (UK), part of the Malta-based First International Merchant Bank (Fimbank), purchased London Forfaiting Company.
The long awaited acquisition – market watchers said London Forfaiters had been on the auction block for some time – provided the necessary capital and support for the iconic forfait house to continue operations. The purchase also opened new avenues to FimBank, which was clear in its intention to grow its own forfaiting business.
TFR sat down with Gregory Bernardi, president of London Forfaiting Americas in New York, to discuss the changes the new regime has brought for both LFC and FimBank.
Letter from Hong Kong: David Sullivan
This has been conference month for me. I have been giving presentations in different locations with the conferences being organised either by professional organisers or banks. I am normally talking about China, enthralling everybody with my knowledge about what is going on or not going on in this market. Of course the main reason for doing this is to promote my company’s activities and to put myself in front of all those organisations who do not wish to employ me.
Market view: Jeremy Peat
No less a body than the International Monetary Fund recently estimated that global GDP growth in 2004 was set to be the fastest since 1973. The continuing oil-price spike has taken some of the gloss off the global gingerbread. Nevertheless, 2004 has been a far better year for international trade and the global economy than any year since the US went into recession at the turn of the century. The probability is that 2005 should be another decent year. However, trends will vary by region and there are a host of uncertainties remaining.
