denotes premium content | Jan 10 2009 Trade & Forfaiting Review magazine archive
Volume 10 Issue 5
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.
Conversely, Vikas Arora at Deutsche Bank in Singapore examines the role of global banks in the Asian trade finance market where he reveals that of transactions between the top ten global trading partners utilising letters of credit to secure trade payments, 87% are intra-Asian. At the same time, he notes, seven of the top ten LC-backed exporting countries globally are Asian – China, Hong Kong, Japan, Taiwan, Korea, India and Singapore (see ‘Local banks given a global edge through partnering’).
Elsewhere, TFR assesses the future prospects for Sub-Saharan oil finance and questions how seriously bankers and oil majors should take the risk of nationalism and expropriation in the region. Will it take hold there in the same way it has in Russia and Latin America, for instance? (‘Fields of gold’).
Finally, Stephen Kemp gives us a detailed tour of the market’s most innovative structured trade finance transactions in ‘From Sonangol to ZCCM – A history in cases’. And Adi Bachar-Reske at Misys reviews the ‘challenging’ relationship between banks and corporates in trade services (‘Power relations’). We hope you enjoy this issue.
Michele Martensen, Editor
Features
Power relations
How can technology improve bank-to-corporate relationships in the trade services world? Adi Bachar-Reske, product marketing manager at Misys Banking Systems in London, shares her views.
Fields of gold?
Just as oil finance in Africa was getting interesting, bankers and oil majors wonder if nationalism and expropriation will take hold there as it has in Latin America and Russia. Erika Morphy reports.
Due West
Once primarily devoted to their domestic client base, Japanese banks are reaching out to service new markets, new clients and provide more global products, writes Erika Morphy.
Regulars
60-second interview: Elliot J. Feldman
Elliot J. Feldman, now a partner with the law firm Baker Hostetler in Washington, DC knows a thing or two about free trade negotiations: he represented the provincial government of Quebec in the North America Free Trade Agreement negotiations during the 1990s. So pay attention when he says it is looking doubtful that the ongoing US-Korean free trade talks will close successfully [Editor's note: written prior to the 31 March deadline]. These are not ordinary free trade talks either. Feldman says it is arguably the first time the US has been in a free trade negotiation – outside of its free trade agreement (FTA) with Canada – with a developed country that has a lot at stake in the outcome. Trade & Forfaiting Review spoke with Feldman about why he thinks the talks are likely to end without resolution on 31 March – the date US president George Bush’s fast track negotiating authority ends – and what that means for the European Union.
Bullish news-flow keeps prices inflated
Natexis Commodity Markets – a subsidiary of Natixis – reviews the base and precious metals markets for the first quarter 2007, and outlines its forecasts for 2008.
Local banks given a global edge through partnering
Vikas Arora, Asia-Pacific regional head of trade finance sales for financial institutions at Deutsche Bank in Singapore, examines the role of global banks in the Asian trade finance market.
Letter from Hong Kong
We have discovered in our limited time in the equity-raising business that venture capital and private equity firms are only prepared to invest in Chinese companies that can easily become foreign, writes David Sullivan at Trade Finance Corporation in Hong Kong.
The challenge of Iran
By Sean Edwards, co-chairman of the International Forfaiting Association’s Market Practice Committee and European legal counsel at Sumitomo Mitsui Banking Corporation in London.
