April 2016 Credit Management magazine

INTERNATIONAL TRADE NEWS
BREXIT NIGHTMARES
I admit it, I want the UK to stay in Europe. I
think exporters do well out of being part of
the EU and I'd like to see it stay that way.
Your views might differ. But one thing's
certain, whichever way the country votes;
the markets don't like uncertainty and
investors are voting with their feet. That's
led to a serious weakening of sterling. Not
SUGARING THE PILL
THIS year was Sidhil’s sixth Arab Health
expo, and its largest. It’s increased the size
of its stand every year, featuring its bedside
pressure monitoring facility, low beds, and
dynamic mattresses – technology that
can help look after very high-risk patients.
With 75 new leads, the show should
contribute to the company’s order book
and demonstrates how crucial it is to build
FOREIGN EXCHANGE SPECIALISTS
HIGH LOW TREND
GBP/EUR 1.2992 1.2628 Up
GBP/USD 1.4569 1.3840 Down
GBP/CHF 1.4305 1.3736 Up
GBP/AUD 2.0560 1.8893 Down
GBP/CAD 2.0283 1.8688 Down
only has the pound lost ten percent against
the euro over three months and seven
percent against the dollar, but it’s also hit a
post-2011 peak of volatility.
Whatever happens, in the run-up to the
referendum you’re going to have to keep
a close eye on your currency exposures –
wherever you export to.
ATRADIUS’ TOP PICKS
ATRADIUS has picked its top countries for
growth in 2016. If you thought emerging
markets were dead, you’re in for a surprise.
Admittedly India remains top of many
people's lists even though the other
three BRICs have fallen by the wayside.
But Atradius also picks Colombia, Peru,
Vietnam, Bangladesh and the Philippines,
Kenya, and Tanzania.
What links these countries? All of them
have a growing middle class – appealing
to consumer goods exporters and services
companies – and, at least to some
extent, stable politics. And they’re mostly
commodity importers, so they should
benefit from low oil and metals prices.
Colombia comes in with the lowest
growth rate, at 2.7 percent, and Peru at 4.9
percent – all the other countries should see
growth for 2016 above six percent.
Are all these markets on your radar?
Maybe they should be.
up your presence in a market steadily over
time.
But Arab Health is also Sidhil’s best
chance to meet its distributors in the area
and talk about emerging opportunities and
how to plan for them. Exhibitions aren’t
just about new business – they’re about
keeping the business you’ve already got
rolling along.
FOR THE LATEST
EXCHANGE RATES VISIT
CURRENCYUK.CO.UK OR
CALL 020 7738 0777
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by the Financial Conduct Authority (FCA).
NEWS IN BRIEF
NEWS IN BRIEF
A TINY RAY OF LIGHT?
IN all the gloom, you might miss a little
positive news. It's early days yet, but the
Baltic Dry Index – a useful lead indicator
for world trade – ticked up markedly in mid
February.
True, the BDI bounced twice on the way
down since August 2015 – but I wonder
if this is a sign that the stock markets
and economic commentators are actually
getting a bit too gloomy, and world trade
is on the way back up again? I'm going to
be keeping a close eye on this indicator in
the next few months. Let's hope it goes the
right way!
MONITORING MADE EASY
MOST of us are used to having to look
up four or five different sources when
we're assessing the risk of exporting to a
particular country. But broker AU Group
has simplified the task by boiling down
information from Euler Hermes, Atradius,
Coface and Credimundi to produce what
it calls a G-Grade, together with basic
information on economic trends, each
country on a single page infographic.
You might not want to base your
entire export credit strategy on this handy
document, but it makes it far easier to
refresh your memory or perhaps browse
through potential export opportunities.
IRAN OPENS THE DOORS
Sanctions on Iran have finally been lifted,
and the doors are open to exporters. A
four percent GDP growth forecast makes
Iran look attractive, particularly since
businesses need to ship in new equipment
to update their facilities and make up for
lost time. Euler Hermes reckons the country
could import $4 billion of machinery and
equipment by the end of 2017 – a huge
opportunity for capital goods exporters.
The problem, though, is how Iran’s going
to pay for it all. The price of its major
export, oil, is close to a ten year low. And
practicalities are also an issue, since
relatively few banks are up and running on
the ground. You may need to do a bit
of extra work if your firm plans to
take advantage of this opportunity.
GBP/JPY 167.5211 154.9245 Down
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