Dear Members and Friends,
It
is really difficult to talk about anything else other than the dreaded Brexit
and the dire impact it is going to have on the global economy. Global Trading
activity heading into the infamous 23 June referendum had been gathering pace
since mid-February of this year. Investor sentiment was picking up and this was
being reflected in asset prices.
However,
closer to the date, investors became jittery and the increased uncertainty over
the results of the UK referendum kept the markets on their toes and risk
aversion spread quickly only to reverse in the days before the referendum as
polls once again indicated a Remain vote might just nudge ahead. However, on 24
June, markets woke up to mayhem, panic last seen in September 2008 (Lehmans'),
as the British electorate voted out of the European Union. Clearly, this was
not the result many international players were gearing for, and was evidently
not the most market-friendly outcome, as all risky assets sold off heavily,
with some percentage changes even reaching double digits on the day in major
equity indices. It is worth mentioning though that given the large swings,
emerging market credit came out relatively unscathed from all happenings in the
developed world.
One might argue that, on the positive side,
Brexit has brought about interesting opportunities but it would be too
premature to estimate the extent of damage and ramifications of the 23 June
referendum result, particularly on a global scale. The economic damage could be
in its infancy and will only start to show up in statistical economic data in a
couple of quarters’ time. The biggest dilemma for investors will be how to
tackle this transitory period, as long and even medium-term plays will look more
hazy.
Small crises have often been welcomed in
our markets but with worries of contagion and central banks having to intervene
heavily to steady the ship, this one could well prove just a little bit too
big. It is certainly unwelcome.
On
a more reassuring note, we are excited that preparations for the
43rd Annual Trade and Forfaiting Conference are well on track to ensure
another memorable ITFA event. To register on-line, to view the conference
programme and for any other informative details, please click here.
Please bear in mind that since the Early Bird Discount has
now expired, we encourage you to register by no later than 31 July in order to
avoid incurring the late registration fees.
In this month’s Newsletter, we present a
technical paper titled ''Market Comment on the Repercussions of Negative
Reference Rates (for example LIBOR)''. We also invite you to read an
interesting article prepared by Marian Boyle (Sullivan & Worcester) on the Insurance Act 2015 - Are you ready? Finally, the ITFA
Board is pleased to announce that ITFA is now registered as a non-profit-making
association in the Swiss Registry of Commerce.
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, info@itfa.org.
Best wishes,
Sean Edwards
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