Dear Members and Friends,
As we put this newsletter to bed, the tragic news of the Paris attacks began to appear on, and then dominate, our television screens. We are not aware of any fatalities or injuries amongst our Paris-based members, a blessing to our close-knit market. ITFA condemns terrorism and the use of violence in all circumstances. One of the often cited reasons for alienation amongst those perpetrating terrorism is poverty. I have always believed that responsible business is the greatest antidote to poverty and that, in the less developed and emerging world, this is best encouraged through the development of international trade. Enabling this business is our business as trade financiers and is, in particular, the vocation of our own market which provides fast, liquid and simple solutions to enabling trade. This was the clear conclusion I took away from the Afreximbank Advanced Structured Trade Finance Seminar held last week in Nairobi (more on this in the next newsletter) where an ITFA team was invited to speak.
Looking at the markets, we are into the final stretch of 2015, a year which has clearly had its challenges not only for the adverse market conditions within which we have had to contend with for pretty much the greater part of the year, but also for the less benign outlook which is seemingly hampering economic growth within the emerging market (EM) economies.
Emerging Markets (EM) have been pretty much in the limelight for the best part of H2 2015. The year-long depreciation of EM currencies from mid-2014 up to the beginning of September was highly volatile at times. However, many of the major EM economies managed to withstand the negative spill-over effects in the past year. EM are more robust and better equipped to deal with crisis, however, there remains lingering structural risk from the massive build-up in foreign currency liabilities and weakness in capital inflows. Furthermore, banking systems are more robust whilst financial regulatory has improved markedly. This has enabled EM currencies (and subsequently their respective underlying economies) to be less susceptible to crisis.
During the month of October, EM benefited from large inflows in credit markets and a relief rally ensued. Asset classes which had sold off in August and September, particularly the energy sector (oil & gas), as well as the mining and metals sector were amongst the best performers in October. Apart from investors wanting to take advantage of beaten down valuations, this positive performance came on the back of supportive and accommodative central banks in China and the Eurozone, and a seemingly clearer path of interest rates as dictated by the US Federal Reserve. Since October, the picture has been mixed, however, with the Paris attacks adding to volatility.
My appointment as Chairman to the ITFA board has coincided with this period of uncertainty.. I think that volatility and weakness is to remain the new normal for some time, but I can assure you all, that as far as ITFA is concerned, both the Board and the team behind the scenes will strive to achieve the best position for all members of our growing Association. The trade receivables market contains much untapped supply, as we saw in Nairobi, and bringing our members closer to those markets is, and will continue to be, one of our major goals.
May I remind you all that with the Christmas season just around the corner, the ITFA Board is pleased to invite all ITFA members to attend the yearly informal gathering; the ITFA Christmas Cocktail Party. As previously communicated, we would greatly appreciate if you could RSVP on email@example.com by latest 25 November 2015. The event is being held at The Roof Garden, Kensington, London on Monday 7th December 2015 at 19:00 hrs. To view the invite please click here. As always, we encourage you all to attend this valuable networking opportunity, so please…save the date! As a reminder, this event is open to members only.
We look forward to hearing from you with any feedback you may want to share with us by sending an email to myself, any of the Board Members or to our general email, firstname.lastname@example.org.
Best wishes,Sean Edwards