denotes premium content | Jan 9 2009 Trade & Forfaiting Review magazine archive
Volume 8 Issue 8
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.
Over the past year the commodity-finance arena has been awash with both new players eager to enter the market as well as existing players looking to reinforce their expertise. Some, such as ABN Amro, are going one step further and exploring financing solutions outside the recognised commodity-finance sphere. For example, as Prabhat Vira explains in our lead story, 'The sky's the limit', the bank is expanding operations beyond its traditional target market to include financing solutions for corporate end users as well.
Meanwhile, in this month’s company profile, Trade & Forfaiting Review (TFR) looks at UFJ’s trade-finance capabilities ahead of its pending merger with Mitsubishi Tokyo. Having been courted by Japan’s banking giants throughout 2004, UFJ is now on course to become part of the world’s largest bank. But where does this leave its trade-finance business?
Also in this issue, ICC Banking Commission technical adviser Gary Collyer reviews the current state of play in the UCP500 revision, while David Hennah of Misys Banking Systems examines the changing nature of trade services. And as new currency regulations come into force in Russia this month, Gide Loyrette Nouel’s Grigory Marinichev and SG’s Massimo Ruocco take an in-depth look at the pros and cons of conducting export-finance business in the country, with comment from EvrazHolding’s financial director Pavel Tatyanin.
TFR is also in the process of putting together a new Global Contacts Directory, which we hope to develop into the definitive guide to the trade-finance industry. If you would like your business listed in the directory or are interested in sponsorship opportunities, please give TFR’s commercial manager, Oliver Wheatley, a call on + 44 (0)20 8785 5968 or email him on: owheatley@ark-group.com
Looking ahead, online voting is currently underway for the second annual TFR Awards and we’ll be announcing the winners next month. In the meantime, I hope you enjoy this issue. As always, we welcome your ideas and feedback. If you have any comments or suggestions, please contact me on mmartensen@ark-group.com
Michele Martensen
Features
The sky's the limit
Record high commodity prices are not only enticing new players to the commodity finance arena, but also inspiring global banks to tap new business and expand existing lines. Erika Morphy reports on a dazzling market that simply refuses to lose its shine.
M&A games
With M&A activity among metals producers reaching peak levels, banks are starting to look at new ways to create financing opportunities in the mining and metals sector. Erika Morphy takes a look at the consolidation trend and assesses where the market is heading.
Maintaining the risk-reward ratio
Following a year of record grain harvests, sky-high prices, and stretched trade-finance lines, Kathleen Williams speaks to several banks about the effects of falling prices, stock surplus and financing requirements in what has become an increasingly liquid and competitive market.
The Russian connection
As new currency control rules come into force in Russia, Grigory Marinichev, associate at Gide Loyrette Nouel in London, and Massimo Ruocco, head of export finance at SG CIB in Milan, examine the mechanics of conducting export finance business in the region and discuss how the country’s restrictive regulatory framework impacts trade transactions.
Revision of UCP500 gathers pace
Gary Collyer, director and global product manager, traditional trade services and trade finance at ABN Amro, reviews the latest developments in the UCP revision. As technical adviser to the ICC Banking Commission and chair of the UCP revision group, he explains why the revision is taking so long, what changes are being contemplated and estimates when the trade community can expect implementation of the new rules.
A new world of banking
David Hennah, product marketing manager at Misys Banking Systems, reviews the growing relationship between trade and technology and highlights the opportunities for growth in developing markets.
Regulars
Sailing smoothly between a rock and a hard place
Guy Brooks, global head of distribution for trade finance at Deutsche Bank, tackles market scepticism over the future of Eastern European trade finance from both ends of the spectrum.
Market View: Greg Potts
A few years ago, one of the witty remarks addressed to lawyers focusing on Russia was that Russia essentially had no laws, and that was a major reason for its problems. Of course, for those in the know, a shortage of laws was never the problem. On the contrary, the Russian legal system was characterised by a myriad of contradictory laws, decrees, regulations and instructions, which made the practice of law in many cases simply a matter of educated and informed guesswork...
Letter from Hong Kong: David Sullivan
Last month I was talking about some funny things that happened in China and I forgot to mention the best story of all. It took place just after the merger of MeesPierson and Generale Bank (Fortis)...
60-second interview: James Burgoyne
One of GE’s more recent financial units is GE Commercial Finance Energy Financial Services. Based in the US, it has largely focused on its home market, investing about $3bn annually in energy-related projects. Now, though, the division is expanding its presence in global markets in Europe and Asia...
Banking on a merger for a competitive edge
Despite 2004 being a good year for UFJ’s trade-finance team, its ambition to raise its market profile to that of a major player remains. Yohihiro Kubo speaks to Kathleen Williams about the bank’s pending merger with Mitsubishi Tokyo, which would not only create the world’s largest bank, but might also allow UFJ to realise its goal by finally gaining a competitive edge on its European counterparts.
Emerging-market debt pricing
Omni Whittington Commentary, June 2005
Country risk appetite
The analysis from Standard Bank Plc
