September 2016 Credit Management magazine

NEWS IN BRIEF >
GLOBAL STUTTER
BARGAINS IN ICELAND
IT’S been a long time since the Icelandic
crisis, and now Moody’s is reviewing
Iceland for a possible upgrade. Unlike
some countries, Iceland seems to have
restructured to avoid the vulnerabilities
that caused the 2008 crash, and it also has
a great natural resource base, favourable
demographics and a well-funded pension
system.
It’s also got something very rare in Europe
these days – real GDP growth, running at
five percent this year. Add to that a small but
UNCHARTED TERRITORY
A 52 percent vote in favour of Brexit is
not making life easy for exporters. Many
have already seen customers looking
for alternative sources of supply as the
uncertainty of the weeks preceding the
referendum looks likely to continue in the
medium term. Exporters who are looking
for long-term project business within the
EU – for instance in civil engineering –
will be particularly badly affected, as it
is now impossible to tell how long the
disentanglement will take and what type of
exit it will be – ‘Norway’, ‘Canada’, or simply
WTO status with tariffs imposed on all EU
trade.
MEDICAL equipment manufacturer Rober
is now selling its innovative pressure
mattresses into India – a massive and fast
developing healthcare market. Its mattresses
can help immobile and critically ill patients by
preventing pressure injuries such as ulcers
from developing, and even have comfort
settings to maintain the right temperature.
Rober is selling both its highest specification
relatively wealthy population, and the omens
are good for consumer brands wanting to
export – particularly since many Icelanders
like to do their shopping in the UK! Industrial
supplies and capital goods are also key import
sectors, with a huge number of projects in
areas such as geothermal power, and big civil
engineering works in the pipeline, as well as
high tech and pharmaceutical industries that
are expanding.
Just be prepared to put up with a bit of
ribbing if you mention international football...
There are a few silver linings though. For
those exporting to emerging economies or
to the US, the fall in sterling will have made
their products more price competitive, and
as long as they’re not depending on EUwide
trade agreements (or the Government
manages to shore up the agreements in
short order) they can take advantage.
For those working in the finance function,
there is also one cast iron certainty; whatever
happens, currencies are going to be very
volatile. If you’re going to navigate the next
couple of years successfully, you really need
to be tracking currencies on a daily basis,
because otherwise you’re going to trip up.
IN COMFORTABLE HEALTH
NoDec range, and the cost effective AirFlex
mattresses – the Indian market supports both
international standard teaching hospitals and
affordable healthcare providers, and Rober
can supply products for both.
India isn’t the easiest market to get into,
but with a good distributor, it’s possible to
do well. And it’s a massive market – so well
worth putting in the initial effort.
A recent report from Euler Hermes makes
sobering reading. It’s expecting to see a
rise in corporate insolvencies – the first
increase since the credit crunch. The US
looks like reversing its recovery, with a three
percent increase in busts forecast after six
successive years of reduced bankruptcies,
and that’s at a time when its GDP growth is
already decelerating to about two percent.
Asia-Pacific and Latin America will
do even worse, with rises of 13 percent
and 17 percent respectively in business
insolvencies. That leaves Europe as the one
bright spot in the global map – but then
of course we’re not going to benefit much
since we’ll be Brexiting at just the wrong
time.
HELP WITH YOUR BREXIT
IT’S worth noting that though the Institute
of Export can’t do anything about the
major uncertainties facing its members, at
least it can help them plan for the various
eventualities. Its post Brexit Workshops
explore issues such as how to explain
Brexit to your export customers and foreign
partners, as well as looking beyond the EU
and securing your supply chain. Workshops
are open to non-members, too, though
members get a heavily discounted rate.
Preferential rates are also available to
CICM members.
CURRENCY UK
FOR THE LATEST
EXCHANGE RATES VISIT
CURRENCYUK.CO.UK OR
CALL 020 7738 0777
Currency UK is authorised and regulated
by the Financial Conduct Authority (FCA).
HIGH LOW TREND
GBP/EUR 1.2092 1.1598 Down
GBP/USD 1.3459 1.2941 Down
GBP/CHF 1.3189 1.2594 Down
GBP/AUD 1.7752 1.6791 Down
GBP/CAD 1.7526 1.6790 Down
GBP/JPY 142.7853 131.0755 Down
The recognised standard
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