denotes premium content | Dec 5 2008 Trade & Forfaiting Review magazine archive
Volume 10 Issue 1
Attending the International Forfaiting Association’s (IFA) 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. IFA chairman Lucio Matassoni, who was up for re-election alongside three fellow board members (see ‘IFA members re-elect board’), was sworn in for another three years – a testament, it seems, to the unity among IFA members and the current board’s insight into key market issues. Sean Edwards gives an informed view in ‘The IFA in Istanbul’.
But re-election victory has not come so easily elsewhere. In Brazil, president Luiz Inácio Lula da Silva’s failure to secure an outright win earlier this month means the country faces a run-off election on 29 October. More worrying, perhaps, as one banker notes in this month’s cover story, ‘Latin liquidity’– during the past 20 years, Brazil has suffered a crisis every four to five years. And with the last one in 2001, 2006 could well be the next. “If you are into statistics then you would be very worried this year,” says the source.
That said, market talk that Brazil could soon become investment grade is gathering momentum. There has been a huge bonanza of bonds issued by Brazilian corporates and going into investor markets in Asia, Europe and the US, says Rick Torken at ING in São Paulo.
Meanwhile, the resounding theme of this month’s issue remains, ‘Liquidity, liquidity, liquidity…’ (to quote London Forfaiting Company’s Simon Lay from Trade & Forfaiting Review’s July/August edition). The trend dominates our cover story, but also surfaces in our hedge fund profile ‘Inside Rosemount Capital’; in our article on factoring which centres on injecting new liquidity into the supply chain (‘Factoring in the supply chain’); and in our report on local currency financing, ‘Local funding gains currency’.
Elsewhere, Matt Gersper and James Meehan give an in-depth account into optimising global trade processes in ‘Creating a competitive advantage in global trade’. And in this month’s legal focus, Denton Wilde Sapte’s Richard Garvan and Nick Grandage assess the primary factors affecting borrowers looking to raise acquisition finance in the commodity sector (‘Financing acquisitions’).
Michele Martensen, editor
Features
Inside Rosemount Capital
It has been nine months since Rosemount Capital launched its first hedge fund devoted entirely to trade finance, joining the handful of such funds that have been established in recent years. A look inside the normally secretive world of the hedge fund shows that, for Rosemount at least, while the format might be new the structure is very similar to a bank’s operations. Amanda Greene reports.
Financing acquisitions
With increased activity in the acquisition finance market in the commodity sector over the past year, Richard Garvan and Nick Grandage, partners in Denton Wilde Sapte's London office, look at some of the factors affecting borrowers looking to raise acquisition finance.
Creating a competitive advantage in global trade
Global Data Mining’s Matt Gersper and James Meehan give an in-depth guide into increasing revenues, reducing costs and optimising global trade processes.
Factoring in the supply chain
A multinational has any number of financing options available to it, from a bank’s balance sheet to the capital markets. So why are many of these corporates turning to factoring – a tool that is generally perceived to be tailored for mid-market companies with fewer resources available? Erika Morphy reports.
Local funding gains currency
Despite the growing liquidity in many emerging markets, local currency funding has been rarer than it ought to be. But that may be changing as export credit agencies, trade banks and development agencies focus on addressing the challenges that to date have hindered these lending programmes. Amanda Greene reports.
Latin liquidity
Latin America is awash with liquidity. For corporates that means a wealth of new funding options from such sources as development banks, hedge funds, local banks and, of course, trade finance banks. For these, the liquidity presents new challenges – as well as some new options. Erika Morphy reports.
SMEs: Where’s the love?
By Erich Michel, senior vice president, head of trade & export finance, at BBVA in New York.
In the spotlight: The IFA in Istanbul
Sean Edwards, co-chairman of the International Forfaiting Association’s Market Practice Committee and European legal counsel at SMBC, examines the role of the IFA following the success of its 33rd annual conference in Istanbul.
Regulars
Country risk appetite
With the exception of Iranian developments there has been little significant change in outlook since our last commentary. A positive tone prevailed at the well-attended annual IFA meeting in Istanbul, where it was apparent that more forfaiters are embracing the trade-related loan product to supplement inventory for sale to investors...
Emerging market debt pricing
The Georgian minister of finance, Aleksi Aleksishvili, recently elaborated on the country’s objective to significantly reduce its foreign debt by 2010. Bilateral (mostly Paris Club) debt stands at approximately $600m, with Russia, Austria and Germany as main creditors. Commercial debt therefore accounts for only a very limited amount. These statistics and developments are no-doubt positive for any outstanding debt and the general sentiment towards Georgia seems rightfully optimistic...
60-second interview
Andrew Underwood, head of political risk at Hiscox Syndicates, on risk coverage in Latin America.
Letter from Hong Kong
Hong Kong is worried about the onslaught of Chinese companies doing things the Chinese way, writes David Sullivan, but in fact they fail to examine the way they have been handling corporate governance and lending practice for many years...
Market view
2006 is on course to complete the best three-year period of global growth in a generation. This has been a superb environment for trade despite the various geopolitical tensions and subsequent pressure on energy prices, writes Andrew Wilson, deputy group chief economist, Royal Bank of Scotland.
