With the first month of 2016 already behind us, it is with great pleasure that I am writing this second newsletter of the year, as I am sure that the upcoming months will not only bring with it challenges but will also provide us with a number of opportunities. And what a start to the year we’ve had so far!
If we thought that the worst of the market correction and volatility in emerging markets and commodities in the latter trading sessions of 2015 was over, we were mistaken. Markets woke up to a crude awakening in the first six weeks of 2016. From weakness in the Chinese economy to lower commodity prices and global economic data persistently disappointing to the downside, markets witnessed a marked increase in risk aversion as the capital flight to safety caused a widespread correction in equity and corporate bond markets.
Markets were offered some respite following market-friendly statements from the European Central Bank, US Federal Reserve and Bank of Japan towards the end of January, only to resume their downward trajectory shortly thereafter.
The market for short-term trade receivables has, nevertheless, remained fairly resilient. And for good reason. These receivables are low-risk, as the recently published ICC Trade Register has shown, SME-friendly and compatible with many sanctions regimes. It is possibly for these reasons that we are seeing much new or renewed interest in forfaiting from Russia and Africa.
Turning to this issue of the ITFA Newsletter, Edward George - Head of Group Research at Ecobank, takes us through the challenges the African continent is facing with a wide trade finance gap, and what needs to be addressed to narrow it down significantly.
May I take the opportunity to remind you all that, as promised, the ITFA Events Calendar for 2016 has now be launched and can be viewed on our ITFA website. We encourage our members to access this page on a regular basis, in order to be informed of all upcoming ITFA events. Watch this space for more.