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Simmering quietly
01 July 2001
With some of the emerging markets experiencing severe economic difficulties, capital goods imports to those countries have slowed right down and forfaiting is one of the trade finance sectors to bear the brunt of the fallout. And with the secondary market drying up forfaiters are looking for a better direction to move in. However, there are some positive signs, and some of the major players remain quite upbeat on future prospects. Michael Rowe examines the sector.
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forfaiting
trade
finance
trade finance
export
On the surface forfaiting is going through a quiet period, with
a reduction in trading everywhere. But underneath significant
developments are moving ahead. These include market concentration
and development of new trading procedures.
Recent tremors such as the economic problems in Turkey and
Argentina have damped down levels of activity everywhere, and the
secondary markets in particular have fallen into an apparent state
of torpor. ?There is currently a scattering of business with no
particular geographic emphasis. The markets are relatively quiet,
and we for instance are currently dealing essentially with good
established clients,? remarks Jack Wilson, managing director of
London Forfaiting Company (LFC), in London.Comments Daniel Vignial,
head of forfaiting at Crédit Agricole Indosuez in Paris: ?The
problem today is that margins have grown very thin because of the
large number of funds looking for deals in which to invest and the
small number of primary operations being generated by exporters.
Accordingly it is very difficult to structure a deal that...
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