Monday, 5 December 2016

CHAIRMAN'S MESSAGE - Sean Edwards, ITFA Chairman / Head of Legal at SMBC

Dear Members and Friends,

As we come to the end of this pivotal year, let me first take the opportunity to thank all those members and guests who attended our Christmas Cocktail Party, which was held earlier on this month at the remarkable Victorian Bath House. This hidden gem in the middle of the hustle and bustle of London was host to one of the most enjoyable (I still hear the ringing in my ears) seasonal parties we have yet put on, giving us all the opportunity to further cement those friendships and relationships which are, I think, unique for a financial market and reminisce on the challenges faced in 2016. For the ITFA Board, this event was an opportunity for us to thank you, our members, for your continuous support of this association. To view photos of the event, please click here.

As I write this final message for the year, I cannot but emphasise enough how busy the year has been. Brexit, the US Presidential Elections, the Italian Referendum, tensions in Turkey, the Fed and ECB meetings coupled with the endless list of sometimes surprising economic data across all regions of the world: the improvement of US economic data; an uptick in inflation in the Eurozone; the strong recovery in EM (in the first 9 months of the year); the continuous slowdown in Chinese economic activity; the strong dollar; a strong recovery in commodities and the stability of the price of oil. These are all but a few of the events which characterised and continue to shape what’s left of 2016.

To say that markets have been topsy-turvy ever since Donald Trump emerged victorious is a bit of an understatement. What surprised many, however, is the way markets reacted. And one of the largest movers has been the US dollar as the greenback has proven its worth, with Trump’s pro-business policies pushing the currency towards new year-to-date highs against major Emerging Market currencies.

The dust is still settling, but in the meantime, the administration in waiting is drawing up and short-listing its candidates to take over key roles and is currently in the process of meeting US allies and has already indicated that it is trying to bridge gaps with those countries whose diplomatic ties with the US has turned sour over recent years. Emerging markets are inevitably going to be impacted with this transition in US leadership, in what way and magnitude is still uncertain but the situation is expected to be fluid, at best, in the coming months.

As announced in last month’s newsletter, the regular feature: our ‘Chart of the Month” contributed by Dr. Rebecca Harding of Equant Analytics, has a Christmas twist to it this month: ‘’Imports Roasting on an Open Fire’’. Chris Hall writes about another ITFA event hosted in collaboration with Bank of China (Singapore), and which took place in Singapore last month. Also, for those who were unable to attend Agnes Alderson's presentation at the ITFA Annual Conference in Warsaw, ITFA has provided you with some insights into its sister association, ATFA.

Even as the year comes to an end, we have been busy by taking up the cudgels on behalf of the SCF industry and meeting with Moody’s to seek clarity on their methodology for rating the debt of companies using this form of finance. This follows on from their now slightly notorious paper on Abengoa’s use of these arrangements. Some useful clarifications were given by the ratings agency but further discussion needs to take place and we will let you know when we can report more concrete findings.    
In other news, may I remind you all that we are currently finalising the venue for next year’s ITFA Annual Conference. And, as some of you might have already heard, next year’s location takes us to Edinburgh, Scotland’s capital. This magnificent, enchanting and historical, but completely contemporary city awaits us. The dates are now confirmed - the conference will be held between 6-8 September 2017, so please start savouring the tartan moments ahead of us and save the date!

Let’s all hope that the tumultuous events of 2016 translate into the opportunities of 2017. In the meantime, I wish you all the very best for the festive season, sacksful of presents and joy and a new year full of health and prosperity.

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,  

Best wishes,

Sean Edwards

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