Year: 2010

Gaming growth

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When the going gets tough, the tough get innovative. In a recession, there is a time to batten down the hatches, but those companies best placed for survival are those that utilise these turbulent times as a breeding ground to exploit new opportunities. The e-Gaming industry is no stranger to innovation and, despite being a young industry having never faced the challenges of recession before; on the whole, it seems to be coping better than other sectors. 

When it comes to the Isle of Man, the new business pipeline over the last year, of companies looking to relocate was of course impacted by a reduced availability of investment funding, particularly for start-up ventures. Having said this though, the Isle of Man saw the contraction in new enquiries last only a few months during the summer. The recession, however, has resulted in only the sounder and robustly funded projects getting as far as thinking seriously about relocating.
 
Of the companies relocating to the Isle of Man in the last 18 months there has been a number of success stories. Most recently, Mahjong Logic was accepted for a licence in the Isle of Man. Mahjong Logic is a leading software developer of the real money player-to-player mahjong network, and is one to watch closely as the current market lends itself to this type of game. In addition to Mahjong, there have also been a number of Asian-based businesses that see the Isle of Man as the best place to base themselves to move into new markets in the surrounding area and time zones. These include online sports books 188bet and SBOBet (Celton Manx’s European sports book operation).

Innovation and creativity have been a regular feature of the businesses that the island has formed relationships with over the last 18 months. The convergence of technologies and use of social media have been major developments. The mobile marketplace has moved forward significantly as a whole with the introduction of the iPhone and similar devices which are really the first generation of handsets that are user friendly enough to encourage wide-spread use for many applications, including gaming. 

The most exciting developments however have been those which break the mould and bring something brand new to the industry. Concepts which are hybrids of what might be seen as ‘traditional gambling’ and more leisure-based games are the ones which won’t have to compete with the existing punter’s pound but will attract new customers into the e-gaming arena. Customers are savvy about using bonus-led promotions to get as much free as possible so ultimately as the industry matures, operators have to look beyond short term price led acquisition and concentrate on developing product and brands which customers share some affinity with, really want and are prepared to pay for. 

Live Casino output from studios has also been growing in popularity and in 2009 SBOBet was granted approval to launch a ‘Live Dealer’ casino by the Isle of Man Government’s Gambling Supervision Commission (GSC) – the first on-island operator, Asian or otherwise, to do so. However, from Live Casino has now grown a new format of dealing − live dealing as a TV feed from terrestrial casinos. This is more of a challenge to regulate but it will be interesting to see how it evolves in 2010.

The Isle of Man’s close public/private cooperation also means that new innovative ideas or developments in gaming from companies already on the island or those looking to relocate can be quickly considered and actioned. The island’s flexible approach in terms of regulation means that complex legislation can be amended, where appropriate, to accommodate a new business that may be wishing to licence in an area the Isle of Man’s secondary legislation does not presently cover.

Outside of this, companies wishing to relocate also recognise that being on the OECD ‘white list’ is a stamp of approval for the island and further highlights that the island meets the OECD’s international standards on tax transparency and co-operation. The Isle of Man has now also signed 18 tax agreements with other countries that meet OECD standards, and are committed to continuing this program of engagement as well as entering further agreements. This along with its membership of the World Trade Organisation and strong links into the City of London are of particular appeal to e-Gaming businesses.

Over the past 12 months some companies in the e-gaming sector have certainly experienced challenging times with loss of share capital and some major rights issues. However despite the economic downturn the e-gaming industry has shown little signs of slowing and we have been witness to this in the Isle of Man where companies that innovate, seek new developments and move into new markets have prospered.

Garth Kimber is head of e-Gaming development at the Isle of Man Government

Considerations on the Greek economy

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Greece has been in the spotlight recently following its weak and derailed fiscal position. The consolidations of public finances have become the number one priority of the government and measures to tackle the ballooning budget deficit and rising government debt have been scrutinised by the investment community. The Investment Bank of Greece, the leading brokerage arm of Marfin Popular Bank Group, is cautiously optimistic on Greece’s macro outlook for 2010.

The main concerns for the Greek economy relate mainly to the consolidation of public finances and the fiscal position of the country. More specifically, the increasing budget deficit and the constantly rising government debt have been in the spotlight of attention, as well as the necessary structural reforms required for the enhancement of the economy’s competitiveness. Moreover, the sharp slowdown in credit expansion, the fall in consumer confidence and relatively high inflation, could lead to a further slowdown of domestic demand in the coming quarters. Looking forward, a successful implementation of the government’s plan to tackle fiscal imbalances and de-escalate government debt, as well as proceed to the necessary restructuring of the public finances, would restore the country’s credibility towards the investment community and the market’s players and ease increasing concerns on the possibility of the country defaulting. Nonetheless, the time lines are very strict and the pressures by the markets extremely high for immediate results and specific initiatives, implying that the coming quarters will be an important milestone for the effectiveness of the proposed measures, as outlined in the Stability & Development Programme. One should take into consideration that in 2010 Greece would be the first Eurozone country to enter the second stage of the Excessive Deficit Procedure (par9 article 104 of the EC treaty).      

Market players seem to welcome government’s targets to reduce the deficit but appear concerned with respect to the effectiveness of the measures. The main point of concern relates to the fact that a large portion of the deficit contraction will be based on rising revenues. The bears argue that measures which are based on increasing revenues might prove ineffective, as economic activity is projected to continue its contraction this year. Moreover, market players seem to ask for more specific and bolder measures by the Greek government in its efforts to sustainably reform public finances, and basically they put pressure on cost cutting, as they consider this action would be more effective and a permanent measure in reducing government spending.

Indeed, revenue enhancement in a contracting economy seems very difficult to achieve. However, having a closer look at the state’s finances could prove the opposite. In more detail, the FinMin has revealed that 94 percent of Greek citizens reported that their personal income level was below the Ä30k mark in FY08 and that Greece’s total taxation revenues (as a percentage of GDP) stood at the low end of its peers, coming in at just 19.8 percent vs. 26.2 percent of EU27 average. This was the case despite the fact that Greece’s individual and corporate tax rates are at the same level of the EU average. In other words, given the high level of tax evasion, revenue enhancement could be achieved, even in a declining economy, if measures to tackle the problem of tax evasion are successful.

As a result, we believe that the measures, announced so far are in the right direction as processes and attempts that are based solely on “cost containment” (wage reductions, increase in taxation, etc), could hurt the economy’s growth path and consumption, ultimately leading to lower revenues for the state. Hence, measures that aim to reduce spending without altering the growth path of the economy should be viewed as positive, in our view.
       
In terms of political and economic conditions, we believe that the relatively newly elected government (the current government was elected in October 09), has a fresh mandate and an ample parliamentary majority, that allow itself to take advantage of the emergency conditions and tackle the structural problems of the economy. One should also bear in mind, that in implementing long-term reforms of structural character, the government has to seek support from social partners, guarantee social cohesion and try to prevent unrest from discomforted income groups, such as wage-paid employees and pensioners. To that extent, the new government has a comparative advantage, as it is closer to the labour unions.   

From another perspective and despite the gloomy outlook on the Greek economy, we highlight the fact that European economic authorities, which constitute the responsible counterparts of the Greek government (and not the rating agencies), have repeatedly expressed their confidence that the new Greek government will proceed to the necessary reforms in order to improve its public finances. The European Commission and the European Council have already indicated that Greece will face a higher surveillance and more detailed controls than other countries under the second stage of the Excessive Deficit Procedure, where it would be very difficult for the government to diverge from budget’s targets. In addition, the Finance ministry has not excluded the possibility of submitting a supplementary budget within 2010, in case this is needed.

GDP
Having experienced a decade of strong growth of four percent on average, the Greek economy has contracted in 2009 for the first time in 16 years, marking a negative growth rate in every quarter, with estimates for FY09 ranging from -1.1 percent to -1.7 percent. According to the latest data from the National Statistical Service (NSS), Greek GDP in Q309 shaped at Ä45.7bn, posting an annual rate of decline of 1.7 percent (vs.-1.2 percent year on year in Q209 and -0.5 percent in Q109). Regarding the upcoming period, Q409 economic contraction is seen at around one percent, according to our estimates, while for FY09 and FY10 many international organisations as well as the Greek government estimate that the economy will suffer negative growth rates, before recovering gradually in 2011. More specifically, according to the Finance Ministry’s December forecasts, the decline in national income could reach the rate for 1.5 percent for 2009, decelerating to 0.3 percent this year and rebounding to positive grounds in 2011 (+1.5 percent). The recession in the Greek economy has not been and is not projected to be as deep as in other European countries, but the period of economic contraction − albeit at low levels − is expected to last longer compared to other European peers.

Budget deficit
According to the December 09 forecasts of the Finance Ministry, budget deficit amounted to 12.7 percent of GDP in FY09 or over Ä30bn (vs. 7.7 percent of GDP in 2008), with the government aiming to reduce the relevant ratio by 4pp to 8.7 percent of GDP in 2010, and by c. 3pp for each year from 2011 onwards (below six percent of GDP in 2011, and below three percent of GDP in 2012), following the suggestions of the BoG to gradually lower the relevant index to below the three percent EU benchmark in a period of three to four years. The increase in budget deficit is attributable to the lag of revenue collections compared to initial targets, as well as to higher government spending. More specifically, data show that revenues declined by c.4.3 percent year on year in FY09 (while initial targets forecasted an increase of 18.5 percent) and spending (primary expenditure + public investment expenditure) increased by c.13 percent year on year (against a target seven percent increase).
 
Government debt
Addressing the issue of the rising government debt is another challenge for the Greek economic authorities. According to the December 09 FIMIN forecasts, the overall figure amounted to c.Ä300bn, 113.4 percent of GDP in 2009 (vs. 99.2 percent of GDP in 2008, +14.2 percent year on year), with the Greek government estimating that the ratio would reach 120.8 percent of GDP in the current year, thus maintaining its number one ranking among its European peers in terms of indebtedness. Accordingly, FY09e interest spending is seen amounting to c.Ä12.3bn (i.e. 5.1 percent of GDP) and is forecasted to reach Ä13bn this year (i.e. 5.3 percent of GDP), while compound interest should lie to Ä20bn levels.

In terms of funding needs, the Finance Ministry has said that borrowing requirements for 2010 will reach Ä53-54bn (vs. c.Ä66bn issued in FY09, exceeding initial targets by c.Ä20bn). In the long-run, the government plans to stabilise government debt to c.124 percent of GDP in 2011 and 2012, and start reducing it by 2013 to 121 percent of GDP. On the positive side, we have to underline that Greece has one of the highest maturities in its debt (among its peers), meaning that it will have no problems funding itself in 2010, in our view.   

Michael Andreadis is Deputy General Manager at Investment Bank of Greece

Yuan-sided argument for change

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While today, BOCI is truly a well positioned leading investment bank in the China and Hong Kong markets, Bank of China’s investment banking efforts have come a long way since being a small player just a couple of years ago.
Marshall Nicholson, MD and Global Head of Equity Capital Markets at BOCI, says new leadership at BOCI has brought those changes – and the benefits are clear to see: the bank has fine-tuned its strategy and core product offerings. “The new leadership, headed by CEO Wang Yan “Max”, along with parent support from BOC, made significant changes in strategy, personnel and product offerings adding to areas like structure finance, private equity, derivatives and private banking. BOCI has worked very hard to upgrade our entire platform to follow a strategy of building a fully integrated investment bank with lending and advisory capabilities like Deutsche Bank or JP Morgan.”

And while many of its competitors were wheeling from the impact of the financial crisis during 2008 and 2009, BOCI – with little exposure to the sub-prime mess – was able to continue to build and thus consolidate its business model further.

“Its taken time of course,” says Nicholson. “With no ECM transactions in 2005, we started with and executed only IPOs in 2006 and then, in 2007, we added equity placements to our ECM platform capabilities and combined with our strong IPO capabilities, finished #4 and #5 for ECM overall in Hong Kong and China respectively. From an institutional sales distribution perspective, in 2007, we’ve started to look increasingly like a Western bank, developing very strong investor relationships not just in China and Hong Kong but also in the UK, Singapore, Europe and the Middle East and then the US markets.” It should be noted many of the largest US institutional investors are already located in Asia, particularly in Hong Kong and Singapore, which BOCI already covers.

BOCI clearly takes a diversified approach to its sales efforts: institutional funds (Western and Chinese); corporate investors (Hong Kong and China), an award winning private bank and very large Hong Kong based brokerage arm. There also remains a lot of Chinese money held offshore, for which BOCI is a natural repository.

Building relationships
Strong corporate relationships are essential to BOCI’s revival. Nicholson says BOCI has the strongest corporate relationship access of any Chinese investment bank due to its parent’s stature as one of the largest commercial banks in China. This access is useful for IPO issuers as well as global institutional investors.

Although 2008 was a bad year for many banks due to the global financial crisis, BOCI’s consistency of building its platform and offering a wide range of services for its clients, positioned BOCI well when markets came back. “While the markets have been volatile over the past years, in the Hong Kong market, we have remained consistently ranked for IPOs (#3) and combined, IPO and placements (#4) over the past four years. Also, over this same time period, BOCI clearly became the leading Chinese investment bank for ECM in Hong Kong, surpassing its leading historical rival, CICC not only in capital raising but substantially executing more transactions (BOCI (47) vs CICC (18)). And, as the financial crisis starting to end, BOCI ECM in 2009 ranked #5 overall for proceeds raised and #3 in terms of overall transactions handled. We were in the right position so everything really came together for us. It clearly helps that we have a big sales distribution platform that is both English and Chinese backed up by dual language research report system capability for Hong Kong and China listed equities– not everyone provides that.”

BOCI’s renaissance path is all the more impressive considering it didn’t have to let go any staff during the global credit seizure. So this Chinese investment bank has much reason to feel confident. “People trust us,” says Nicholson, “we have a fine investment bank with top tier ECM capabilities and offer a full range of other services; we know how to leverage our strengths. While we don’t win every deal, we are a leader executing successful deals including many large IPOs and equity placements on a sole basis. The old saying use to be ‘hire a Chinese investment bank for restructuring or PRC work and one or two international banks for sales distribution’. Today, we don’t need the international banks as we have built in some cases, an even larger equity sales distribution platform capability than the international banks. We’re truly successful at what we do.”

Flexibility, speed and privacy
There’s no issue about BOCI’s future place in the market either says Nicholson. “We are absolutely relevant. We have a lot to offer. We’re very smart about the way we use our relationships and allocations, for example. Our sales distribution platform is extensive and we are now #2 for trading volume in the Hong Kong market. That’s impressive.”

A key strategy is BOCI maintaining large trading volumes in all size companies. That’s really a benefit, explains Nicholson. “For many it’s much better for our clients to trade through BOCI to achieve better average buying or selling costs as an investor wants to trade through a firm that has a lot of volume. With BOCI having one of the largest platforms of sales and trading, it is easier to hide your movements. “Our size protects you as an investor. Essentially better average buying or selling costs for that institution or individual,” says Nicholson.

BOCI has assiduously worked hard at reaching out for new institutional relationships asserts Nicholson. “Our CEO made it a priority to be a lot more Western in terms of overall advisory and execution capabilities. To truly be a top tier ECM house in Hong Kong, you need to bring more deals to market and you need a strong sales distribution platform; the combination is a circular process that makes us stronger.

Winning deals is a relationship and/or capabilities assignment and our investment bank and capital markets units usually take the lead. Our market share continues to grow and all areas of our investment bank and diversified sales distribution platform benefit.”

Looking ahead
The pressure is on though for places like Hong Kong. Shanghai may well open an international board for companies like China Mobile and HSBC in future. And while Hong Kong is under pressure, Nicholson believes progress with a Chinese international board will go slower than many people think. “Priorities may be given to HK-listed Chinese companies”, predicts Nicholson. Companies with large China exposure or operations, like HSBC – which has 144-year-old roots in Asia – will inevitably return home to China, keen to raise its profile with retail investors. For companies that don’t have a China angle to play, “it could be many years from now when that happens and priority would naturally be given to high quality large cap global names,” says Nicholson.

Hong Kong’s future
Marshall Nicholson says that Hong Kong has an assured future as a financial and investment centre. Nicholson says, “While Hong Kong has to be concerned about China, it’s also about the opportunity to go out there and continue to build itself as Asia’s leading regional stock exchange. Hong Kong has an established infrastructure base of institutional investors, private equity, investment and commercial banks, lawyers, accountants and research support. This is not easy to replicate.”

“Hong Kong is an international investment hub. There are plenty of companies and opportunities out there − a strong Chinese business, an Asian angle or even a global business (commodities, shipping, etc) will find Hong Kong attractive” Nicholson says. “But Hong Kong will have to work hard to capture these opportunities. I am quite positive both China and Hong Kong can co-exist.”

That’s born out by the figures. In 2009 $100bn was raised in IPOs globally – but almost 50 percent of that amount was raised in Hong Kong and Shanghai stock exchanges. An impressive achievement at a very uncertain time.

Although much of China money flows internally, what does go offshore goes mostly into Hong Kong. “While there are plenty of other stock exchanges, Hong Kong, due to its proximity to the mainland, its large stock exchange and breadth of services, tends to attract more business than other Asian stock exchange,” says Nicholson. “I truly believe Hong Kong and BOCI have a very solid and exciting future ahead.”

BOCI in brief:
– Experienced financial professionals with a broad institutional and retail sales distribution network
– Comprehensive global management operation
– Offers a genuinely wide range of investment banking services to clients including…
– Securities underwriting, mergers & acquisitions, financial advisory
– Equity securities sales trading and research, equity derivatives, fixed income, asset management
– Wealth management, private equity investments, leveraged & structured finance

About BOCI
BOCI, headquartered in Hong Kong, specialises in investment banking and is a wholly owned subsidiary of Bank of China Limited (“BOC”). Founded on 10 July 1998, its presence can be traced back to 1979 when China Development Finance Company (HK) was established to offer investment-banking services to its clients in Hong Kong. BOCI has subsidiaries in China, Hong Kong, London, New York and Singapore.

For more information contact: marshall.nicholson@bocigroup.com; tel: +852 2230 8205

Europe’s new gas supply on track

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Nord Stream is a pipeline that will transport natural gas from the vast gas fields of northern Russia to the EU. A project familiar to regular readers of World Finance, Nord Stream is a project of four major companies, OAO Gazprom, BASF, Wintershall AG and E.ON Ruhrgas. Once completed, Nord Stream will consist of two parallel lines that run for 1,220km on the seabed of the Baltic Sea making it Europe’s longest underwater pipeline and one of the continent’s most important infrastructure projects of recent decades.

2010 will be a pivotal year in the history of the project with construction of the first line due to commence in early Q2. Transport capacity of the first line will reach around 27.5bn cubic metres a year (bcm) with completion due in 2011. The second line will double annual capacity to around 55 bcm per year providing enough energy to meet the demand of more than 26m European households. World Finance takes a close look at the recent progress of the project as Nord Stream gets set to build a new gas supply route for Europe.

A successful end to 2009
The final few months of 2009 saw Nord Stream achieve significant success with permits for construction being awarded to the project by Denmark, Sweden, Finland, Russia and Germany. There is currently only one permit remaining – the water permit, which is issued by the Western Finland Environmental Permit Authority. The permits obtained were the result of many years of hard work invested in planning the pipeline and mean that the national authorities are satisfied that the project fulfils the stringent environmental and economic conditions of the five countries whose waters the pipeline will pass. Estonia, Latvia, Lithuania and Poland were also involved in the international consultation process setting a new benchmark for international cooperation. In fact, detailed surveys and research of the potential environmental and socioeconomic impacts of the Nord Stream pipeline started back in the 1990s. In total, Nord Stream has invested more than Ä100m into environmental impact studies to ensure that the routing of the pipeline is environmentally safe and sound.

Whilst permitting processes are time-consuming and demanding, all the permits have been granted well within schedule. The Russian and German permits were granted in the final weeks of 2009 meaning that all the basics are in place to allow for the start of construction in April 2010 according to plan. The second and final German permit granted on December 28, 2009 leaves only the second Finnish permit outstanding. The consortium has already received the Finnish EEZ permit and the permit for the 50km section of the pipeline in German territorial waters and landfall in Lubmin near Greifswald.

As far as the water permit is concerned the Western Finland Environmental Permit Authority will take into account the Uusimaa Regional Environment Centre’s evaluation of the Environmental Impact Assessment, along with the additional information provided by Nord Stream. According to the Western Finland Environmental Permit Authority, the decision for the water permit will be granted by the end of January 2010. The Munitions II permit application for the anchoring corridor will be submitted in time to ensure the permit will be received well before related activities start.

It is important to note that construction will only begin once all necessary permits have been issued. Nord Stream assumes it will receive the final outstanding permit to allow for construction to begin as planned in spring 2010. Renowned and experienced technical sub-contractors, who have already been commissioned, will continue the intensive preparation of construction activities as scheduled to enable construction to begin as planned.

Financing
Financing for the project comes from Nord Stream’s shareholders who are investing 30 percent of the Ä7.4bn (£6.7bn) required for the pipeline through equity contributions proportionate to their shares in the joint venture. The budget figure is calculated on the basis of the contracts for pipe production, logistics and pipe laying.

Some 70 percent will be financed externally by means of project financing from banks with substantial export credit agency support. Phase 1 of project financing is coming to an end – to date 27 banks have confirmed participation in the financing for about Ä3.9bn meaning that contracts should be finalised within a short time.

The timetable for the Nord Stream project is consistent with a project of this magnitude, with a Request for Proposals (RFPs) being issued to interested banks back in August 2009. It is clear from the response to Phase One funding that investors see Nord Stream as an excellent investment opportunity in spite of tough economic conditions. Indeed, there is genuine enthusiasm in the investment community about a truly pan-European project that will provide jobs and supply Europe with a reliable and secure supply of energy for many years to come.

Nord Stream will seek additional funding for Phase 2 in 2010. Yet, it is important to note that the construction contracts and the contracts with Saipem (for pipe-laying) and EUPEC (for the pipe-coating) are for both pipelines. The coating yards (covering both phases) are already built and operating and the steel order for the second pipeline (Phase Two) is planned for Q1 2010. Nord Stream foresees that the work done to develop documentation for Phase One will greatly shorten the financing process for Phase Two meaning that all the financing will be wrapped up by the end of 2010 at the latest.

Challenges ahead
The main challenges for 2010 lie in the construction phase, which will be the project’s primary focus this year. In preparation, Nord Stream has hired an experienced Deputy Director of Construction to oversee pipeline installation in close cooperation with the relevant authorities and in accordance with permitting requirements. In fact, preparations for construction began back in August when the first transshipment of pipes from Mukran to Karlskrona took place. Now the majority of the pipes needed for the first line of the pipeline are already in storage at strategically located marshalling yards.

Importantly, Saipem will start pipelaying activities in April 2010 with the Castoro Sei pipelay vessel; the Solitaire pipelay vessel will start working in September 2010. It is foreseen that the laying of the first line will be completed in 2011 – the laying of the second line is scheduled for 2011 and 2012.

Munitions clearance operations began at the end of November in Finnish waters and take the project another step closer to construction. Approximately 70 munitions in Finnish, Swedish and Russian waters were identified within the security and anchor corridors of the pipeline route. To mitigate any potential risk to the pipeline, Nord Stream together with BACTEC (a leading UK-based explosive ordnance and mine action company) and international and relevant authorities, has developed an environmental and safety management plan that establishes monitoring and mitigation measures related to munitions clearance in Finland and Sweden. In Russian waters, it will be the responsibility of the Russian navy to clear the munitions following their standard procedures for clearance. Mine clearance in the Baltic Sea is nothing new – since 1996 around 1,000 munitions have been cleared by navies of the countries bordering the sea.

Energy contribution
The prospect of additional and secure gas supplies through the Nord Stream pipeline comes at a good time for Europe. Currently, Europe is facing an acute energy shortfall as indigenous energy supplies run short and renewables are yet to be fully exploited. For example, additional gas supplies are particularly welcomed in the UK as gas reserves in the North Sea have dwindled changing the country’s status as a net producer of natural gas to become a net consumer. Significantly, the UK remains Europe’s largest gas market, a result of its heavy use of gas in electricity generation and it is estimated that the UK will need to import three quarters of its gas supply by 2015. By the time that both lines are operational in 2012 the UK will be piping gas directly from Russia for the first time. Already more than 4bcm of gas per annum has been booked for the UK market through Nord Stream equivalent to more than four percent of total UK gas demand of about 94 bcm per annum. The gas would be piped to Britain through the Netherlands and Belgium across the North Sea to a gas storage centre in Norfolk. As far as the European market is concerned natural gas delivery contracts have been signed between European and Russian companies through to the year 2035.

With all permits bar one received and crucial Phase One financing coming to a close in the next few weeks, 2010 will mark a crucial year for Nord Stream. With construction of the first line due to start in April, Nord Stream is on time and on track to supply Europe with gas from 2011.

For more information email: press@nord-stream.com; tel: Jens D Müller +41 79 295 96 08

More for less

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Time was when more than a few executives banked their salaries and lived off their corporate expenses. Not any more – such times are long gone.

The recognition that travel and associated expenses represent most organisations’ second-largest controllable expense is driving the quest for the vast opportunities for savings that can be found through a properly defined and controlled expenses management system.

There is now an acknowledged need for comprehensive Management Information (MI) systems that can spot and highlight out-of-policy spend.

Diners Club’s Global Vision MI tool provides spend information at the highest level yet can also drill down into subsidiary, cost centre, or individual cardholder spending data, highlighting non-compliance in class of travel, size of car rented or use of non-approved hotel chains. Some businesses are now only allowing so-called ‘revenue-producing travel’.

The use of low-cost airlines rather than scheduled carriers, the pro-active seeking of lower hotel rates and stricter control of the per diem spend related to meals and other services are all being targeted as means to lower overall costs.    

Many of these controls now being put into place will certainly continue going forward as they represent sound business practice. Sooner or later the economy will pick up and business will regain its health. Companies will have to get their people back out on the road to meet customers but the present demand for increased control over expenses will not diminish.

The current situation is nothing new. Since World War II there has been a rolling cycle of recessions and recoveries. When it comes to business expenses, economically-driven changes have been seen at the time of the outbreak of both Gulf Wars, in the immediate post-9/11 period, and during the SARS outbreak.

What has changed dramatically is the reaction time, which has accelerated enormously thanks to improved MI systems that can direct management to where cuts can be made and steer them towards the stricter controls that can be put into place.

It’s a vital element of succeeding in today’s ever more competitive business world. Companies have been forced to trim waste, to get more from less.

Corporate travel and procurement departments have had to reduce staff and make more efficient use of technology.

This has driven Diners Club’s increased number of joint projects with its clients, which aim to automate back office information feeds of card data into automated expense reporting tools and ERP systems.

Says Tom Edgerton: “Because of our global reach, ideas for improvement flow all the time from one country to another. What are emerging as ‘best practice’ strategies, involve such things as improved client communication, better and more highly automated customer service and new tools for the cardholder and the programme administrator. We also get very useful feedback from our client meetings and forums that help us keep on track with where we should be going with our products and the associated technology.

“For our global clients, customer service is performed at both the headquarters and subsidiary level.

“This provides the local subsidiary with local product knowledge language support while providing the same information tools that all other subsidiaries of the company can access.”

It is certain that the strong trends, towards global consolidation of spend data across international companies, will continue apace. This will put them in a stronger position when it comes to negotiating vendor agreements with major airlines, hotel chains and car rental operators.

The need for businesses to have a consistent card programme across all the countries in which they operate will narrow the field as to which global expense management companies they can work with.

Diners Club’s aim is to continually improve its products and services to ensure the client has a viable choice when considering changing from their current supplier to a different one or when planning the implementation of a new expense management programme.

Says Tom Edgerton: “We are in a state of constant evolution. The greatest challenge to us has always been in keeping up with the myriad regulatory changes that impact the services we offer. Taking on-board the suggestions of our clients, we have taken the tack of working directly with the regulators to anticipate these changes and keep ahead of them.”

The first credit card on the market – they launched in 1951 – and with more than 25 years of corporate credit card experience, Diners Club today can offer corporate payment solutions in more than 50 countries.

Adds Tom Edgerton: “We operate a Corporate Card programme that provides unmatched service from our dealings with the client’s headquarters right down to individual cardholder level.

“Our set of services is consistent across all the countries in which we operate. With more than 100,000 multinational, corporate and SME clients we offer a truly global solution.”

Big Pharma strikes again

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After a year of disappointment, news of a massive merger in what was once regarded as a key sector to stoke investor appetite has to be welcoming news. On January 4, Swiss pharmaceutical giant Novartis agreed to take full control of eyecare company Alcon in a deal worth nearly $40bn. Novartis will spend $28.1bn on raising its stake in the company to 77 percent, up from the 25 percent stake it bought from Nestle in 2008. It then plans to spend a further $11.2bn on buying the remaining 23 percent stake it does not own.

The acquisition is expected to help Novartis diversify its business away from prescription drugs. Several large drug companies have been eyeing acquisitions in other areas of healthcare as they begin losing patent protection of their own drugs. “The addition of Alcon will strategically strengthen our healthcare portfolio and our position in eyecare, a sector with dynamic growth,” said Daniel Vasella, chairman and chief executive of Novartis. He added that the two companies would be able to combine research and development operations, potentially saving them $200m over three years.

Even with the credit crunch, the pharmaceutical sector has been one area of massive investor interest. Between 1995 and 2009 an astonishing 11,207 deals took place in the sector, worth a total value of nearly $2trn. And mergers and acquisitions remain an integral part of Big Pharma’s strategy, contributing almost two-thirds of peer-set sales growth until 2014 according to market analyst Datamonitor.

The past decade has seen a wave of major M&A activity in the sector, from the creation of AstraZeneca and GlaxoSmithKline to the merger of Pfizer and Wyeth and Merck and Schering-Plough. To quantify how much sales growth has been driven by M&A versus how much has been self-produced through organic growth, Datamonitor analysed a 20-year sales dataset comprising 14 years (1995–2008) of company reported sales and six years (2009–2014) of forecast data. According to the data, Big Pharma’s sales were $84bn in 1995 and, based on organic growth only, are forecast to increase to $195bn by 2014. Furthermore, the analyst believes that M&A activity will lift 2014 sales to $381bn. As a result, between 1995 and 2014, M&A activity is expected to account for 63 percent of absolute growth. Datamonitor also notes that the mergers may help Big Pharma maintain its share of the total prescription pharmaceutical market.

Drug drug druggy
But the performance of some pharmaceutical and biotech company stocks has been mixed at best. G Steven Burrill, CEO of Burrill & Company, a San Francisco-based merchant bank specialising in funding for life sciences companies, says that the performance of some blue-chip biotech firms weighed down the sector’s performance on the stock market. He points out, for example, that both Amgen and Genzyme saw their share values decline and finish in negative territory to close the year down 1.7 percent and 26 percent, respectively. Amgen’s shares took a hit in the final quarter after the US Federal Drugs Agency said it wanted more information on the potential osteoporosis treatment Prolia. Genzyme shares were impacted as manufacturing problems slowed sales of its drug Cerezyme used to treat Gaucher disease.

“On the plus side, several companies saw their share values increase dramatically,” added Burrill. “Leading the charge was Affymetrix whose share value almost doubled, benefiting both from an improvement in its quarterly sales performances and a general resurgence of interest in genomics and tools companies during 2009.”

“The spectre of personalised medicine is gaining traction thanks to Big Pharma adjusting their business models from discovering blockbuster drugs to developing targeted medicines. Advanced tools to uncover genetic information will be central to this new strategy,” says Burrill. “The drive to slash the cost of genomic sequencing to $1,000 has also focused attention on advances under way in next-generation sequencing, which is one of the reasons why the share values of companies such as Illumina, Life Technologies and Helicos BioSciences, who provide various sequencing tools, performed so well during the year.”

Helping pad these gains was the dramatic year-over-year share increases of companies such as Human Genome Sciences (1,370 percent), Compugen (1,000 percent), Athersys (821 percent) and Targacept (524 percent), whose share values were driven by positive clinical trials data and/or the signing of lucrative partnerships with pharmaceutical companies.

Burrill also points to corporate fundraising levels as a positive indicator for the sector in 2010. He says that despite the tough economic environment, the biotech industry in the US raised, through public and private financings and partnerships, over $55bn in 2009 – setting a new record. “Partnering was on a tear through much of the year with the industry raising almost $37bn in total deal values – a record for the industry. With $55bn raised, this will go down in history as our industry’s largest financing year, albeit during one of the most difficult financing environments ever,” says Burrill. “The message is: when companies have to raise capital, companies do, even when the cost of capital is unfavourable.”

“It also reflects the urgency that Big Pharma’s place on accessing biotech innovation as their ‘patent cliff’ gets ever closer,” says Burrill. “The number of deals inked in the year is unprecedented. What did come as a surprise to many was that they did not acquire biotech companies at the rate that was predicted,” he adds.

Pondering property owners
As a wave of patent expiries on major products approaches Big Pharma’s shores, industry observers are calling 2010 the year of the patent cliff. Companies will continue to look for partners and purchases, both big and small, to offset the looming decline in sales.

Among the drugs facing generic competition this year are Pfizer’s Alzheimer’s treatment Aricept, Merck’s hypertension medicine Cozaar, and Sanofi-Aventis’ breast cancer drug Taxotere. And by 2012, several firms will have lost protection on their most lucrative products, including Eli Lilly (Zyprexa), Bristol-Myers Squibb and Sanofi-Aventis (Plavix), and AstraZeneca (Seroquel). Most critically, Pfizer will face competition on Lipitor, the cholesterol-lowering drug that raked in nearly $13bn in 2008.

Companies are using a range of tactics to stem the pending revenue drain. Last year brought three high-profile deals meant to buttress portfolios and pipelines: Pfizer paid $68bn for Wyeth, Merck bought Schering-Plough for $41bn, and Roche forked over $47bn for the 44 percent of Genentech it did not already own.

Yet even with this latest round of merger and acquisition activity, no single firm commands more than eight percent of the global prescription drug market, notes Burrill. “That would generally indicate that we have a ways to go on consolidation,” he says. “There’s definitely a couple of large M&A events left in Big Pharma,” agrees Simon King, senior analyst at Datamonitor.

King points to two companies that sat out the merger frenzy of the past decade. Managers at Lilly and Bristol-Myers focused on smaller biotech acquisitions and swore they were not interested in bigger deals. However, they are now the smallest of the top-tier players, and King sees a potential shift in strategy going forward.

Throughout the year, big companies will continue to mine the pipelines of small biotechs to help sustain growth. In a positive twist for Big Pharma, the challenging funding environment for small firms will create some bargains.
Burrill notes that 2009 turned out to be the second-largest financing year in biotech history. Still, gloomy markets meant that small firms, unable to raise cash from stock offerings or venture capitalists, were forced to accept less favourable terms from partners or acquirers. In 2010, those harsh realities will persist. Also this year, drug companies will continue to look to emerging markets for growth, Datamonitor predicts. In addition to India and China, where many firms increased their stake in 2009, Latin America, Central and Eastern Europe, and Turkey are to be important acquisition locales for Big Pharma.

In December last year GlaxoSmithKline (GSK), the world’s leading vaccine producer, said that it plans to outpace its rivals in the race to emerging markets as revenue from traditional Western pharmaceutical markets continues to slow. Abbas Hussein, London-based GSK’s head of emerging markets, said that the company will pursue acquisitions and alliances in the region, although he cautioned that targets are scarce and prices being demanded by some businesses are unreasonable.

Hussein said that GSK is focusing on a combined pool of branded generics, vaccines and traditional patented medicines to beef up its exposure to emerging markets, which currently account for 13 percent of group sales. “I think it’s very, very reasonable to say that my ambition is that we will beat the market growth rate,” he told reporters ahead of an analyst and investor briefing.

Healthcare information group IMS Health has forecast 13 percent to 15 percent growth in pharmaceutical demand in emerging markets over the coming decade, compared with just one percent to three percent for mature markets. For example, China’s domestic vaccine production market is expected to expand quickly in the years ahead as investors look to capitalise on the nation’s healthcare reforms and enhanced public awareness about inoculations.

Analysts expect that the country’s vaccine sector will grow, up to 25 percent annually, according to a report from Zero2IPO, a Chinese venture-capital firm. In 2012, the size of the market will reach “8bn yuan”, the report says. Attracted by the growing vaccine market, “investors from home and abroad will be piling into China”, said Zheng Yufen, senior manager for healthcare at the investment banking division of Zero2IPO.

Talk of foreign investment in the country’s growing pharmaceutical industry has already spurred rallying of some companies’ share prices. For example, at the start of this year shares of China’s Sinopharm Group jumped on fund buying fuelled by hopes for more merger and acquisition deals as China’s largest pharmaceutical products distributor moves to expand its revenue base. “We have a very bullish view on the stock as the company is in one of China’s booming, high entry barrier industries. More M&A deals are expected as it grows through acquisitions,” says William Lo, analyst at Ample Finance Group. “Since it is the market leader in this low-risk distribution segment of the medical industry, we don’t expect to see any competition from rivals and that also fits the appetites of many investment funds,” Lo says.

Reforming China’s healthcare
China is the world’s largest vaccine manufacturer, and most of the companies in the sector are privately owned. The local vaccine market has enjoyed strong growth worldwide, but vaccine sales accounted for only less than one percent in the nation’s healthcare industry, according to figures from CITIC Securities. “That number is comparatively low considering China’s large population base,” said Zheng.

Ongoing healthcare reform is giving the vaccine sector a boost because the Chinese government is expected to spend 26bn yuan on improving public healthcare services before the end of 2011. According to Zero2IPO, the gross profit rate for vaccine companies on average is 70 percent. But challenges do exist. “Compared with their foreign counterparts, Chinese vaccine makers lag behind in innovation and management,” Wang said.

Nationwide, China has over 40 vaccine manufacturers. Other than state-owned companies like Shanghai-listed Tiantan Biological Products and US-listed Sinovac Biotech, many of China’s vaccine makers are private and still small in size. “Money is their biggest concern when they plan to expand,” said Zheng.

Drug companies are battling to win a large piece of the pie as they look for substitute revenue in the face of increased competition for patented drugs in the US and Western Europe. Drug sales in emerging markets are expected to double by 2015 from the current $81bn thanks to a number of factors, including a high birthrate and a swiftly increasing middle class. “By 2020 you are looking at emerging markets in size being equivalent to the US market and the major five in Europe,” says GSK’s Hussein.

In 2009, a batch of international pharmaceutical firms entered the vaccine sector through mergers and acquisitions. In late 2009, Novartis International, the world’s sixth largest pharmaceutical company said it agreed to acquire an 85 percent stake in a Zhejiang-based private vaccine producer. And last year GSK wrapped up two deals in China to establish vaccine manufacturing joint ventures with two local firms committed to researching and developing vaccines in various categories. “We have great confidence in China,” says the firm.

Increasing GSK’s reach in the region would provide a key “third leg” to its existing US and European businesses, he added. Hussein said that GSK remained alive to acquisitions and tie-ups in the region following its purchase of assets from Bristol-Myers Squibb Co., Belgium’s UCB SA, and alliances with South Africa’s Aspen Pharmacare Holdings Ltd and India’s Dr Reddy’s Laboratories Ltd.

Hussein said that alliances were a “great way to go as you are sharing the risk, and it makes good financial sense,” while acknowledging they can be more complicated than a straightforward acquisition. GSK expects operating margins in the region to remain at current levels of around 35 percent of sales. But he adds that GSK is unwilling to pay over the odds for any potential deals. “I think the pace will continue,” says Hussein. “On the other hand, I think it’s fair to say there are very scarce targets and some of the valuations of the promoters are very unreasonable.” 

Predictions for 2010
G Steven Burrill, CEO of Burrill & Company, a San Francisco-based merchant bank specialising in funding for life sciences companies, outlines his thoughts on what is likely to happen in the pharmaceuticals sector over the coming year.

Biotech consolidation to continue
The large universe of small public companies and private companies looking for venture capital will still face challenges as they try to find ways to extend their runway and stretch out their remaining funds. Expect to see further consolidation in 2010 although at a slower pace that we saw in 2009.

Capital
Over $15bn will be raised by US biotechs; partnering/M&A will again trump financings and in total $35bn will be raised. The industry’s market cap will grow from its present level of $350bn to $400bn, despite significant consolidation and attrition as valuation is lost through M&As. There will be significant funding available for public companies through secondary financings and registered direct offerings, especially after they report good news.

Partnering
To deal with their impending patent cliffs, Big Pharma will continue to keep a robust pace of partnering deals. Both Big Pharma and Big Biotech will compete for companies with advanced product pipelines, as well as important land grabs of technology. There will also be new players competing for technologies – such as major medical devices, instrumentation and healthcare IT companies, and even generics companies will be acquirers. The traditional sector lines of pharma, biotech, devices, diagnostics, healthcare IT, services, and generics/biosimilars will blur as we see converging technologies (and companies) responding to new market opportunities that present themselves as we move a system focused on treating sickness to one that seeks to maintain wellness.

Mergers & Acquisitions
Big Pharma consolidation will continue as these companies position themselves for the new market realities and competitive pressures from the generics world. Pharma will also start to adapt from a vertically integrated business model to one that reflects virtual integration. Companies will build dedicated business product units with their own management structures and decision making processes.

Healthcare reform
President Obama’s State-of-the-Union address in January reported on his new healthcare reform bill. The reform would stimulate ways to move the system from one based on cost to one based on value. Providers will look for ways to reduce costs by improving healthcare delivery and rewarding behaviour that promote healthier lifestyles. But most of the impact of this healthcare reform bill will be on reforming the insurance industry and who pays for a largely dysfunctional system. Healthcare reform II will begin immediately, trying to fix what still remains as a broken system.

Business as usual or a new way forward?

Posted on by itsupport

As the dust settles over the economic turmoil of 2009, across the globe, many businesses are expecting – or at least hoping − that 2010 will prove to be a turning point in their fortunes. GDP in most major markets is expected to improve following a year of weak sales, corporate layoffs, idle plant and scant investment. Productivity should follow suit as the wheels of production again begin to turn to restock depleted inventories.

Despite these expectations of a turnaround, everything is certainly not ‘gung ho’. Unlike the heady days of earlier years, when it seemed as if businesses could do little wrong − and when they did, the economy was so strong that it was remarkably forgiving − we aren’t on cruise control. Far from it. Despite the ‘green shoots’ of recovery, history shows us that, in 2010, as in previous recovery years, we will continue to see high unemployment and corporate failure rates. So, as the economic recovery gradually gains momentum, the watchword for companies – if they are to survive and plan for renewed growth – is ‘caution’.

Throughout the recession, limited, if any, access to bank financing and tighter restrictions on credit insurance confirmed that it was certainly not business as usual. A truth that soon became apparent to all those engaged in domestic and international trade was that past experience – of both markets and customers – could no longer be relied upon as an accurate indicator of the path that future trade would take. Seen in that context, the response of banks, in demanding to see more sturdy business plans from potential borrowers, and of credit insurers, in requiring the most recent financial information available before providing cover on their customers’ buyers, should be expected.

But, despite the often harsh new realities of the marketplace, the value of credit as a medium of successful trade is, if anything, greater than ever. Credit serves many purposes. It creates demand in a flagging market place; it gives suppliers the edge over competitors who offer less attractive terms; and, as buyers’ access to bank finance continues to be in short supply, it gives buyers breathing space to pay for the goods and services purchased from their suppliers.

So, while in tough economic conditions, suppliers’ initial reflex may be to withdraw credit facilities from their customers, this would be short sighted – and potentially damaging to hard earned business relationships.

Credit is vital if trade is to flourish. And provided that there is good reason to believe that payment will be received on time, offering credit should not adversely affect suppliers’ cash flow. But that means that credit must be accompanied by a heightened focus on best practice in credit management. Credit management – not credit control. They are very different. While credit control has negative connotations, credit management encourages continued sales on credit to trusted customers, and is instrumental in building and maintaining profitable business relationships. In the future it will require greater transparency – especially in terms of the latest financial information that can be provided by buyers − who are, thankfully, beginning to understand that such transparency is essential if they are to keep their supply channels open.

And credit insurance should be central to any credit management strategy. By its very nature, credit insurance imposes a discipline on credit sales, ensuring that new customers are properly vetted and existing ones continue to be monitored for changes in payment behaviour that may signal financial problems. It makes available the recovery expertise that can address those problems before they escalate. It provides the market intelligence that helps in the suppliers’ decision making process. And, in the last resort, it is the safety net that protects the supplier’s bottom line when the unexpected happens.

So how do we summarise the outlook for 2010? Business as usual? Hardly – and certainly not while the aftershocks of 2009 continue to reverberate. But that’s no reason to be pessimistic.  While 2009 has been a salutary experience, it’s also brought to the surface exactly what is important to successful and profitable trade.

That’s transparency – transparency between all the parties involved: supplier, buyer, bank and credit insurer. That way, each can understand the risks and opportunities associated with each business relationship and act accordingly – and in a way that always seeks to maintain valuable relationships and avoid undesirable financial loss.

Simon Groves is a senior manager of corporate communications and marketing at Atradius Credit Insurance NV

Of olive oil and transmission fluid

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Tucked away along the eastern mediterranean coastline, nestled at the crossroads of three continents, Syria has steadily covered ground on its ambitious development journey. Over the last decade or so, economic reforms have begun to pay dividends and the country has demonstrated that it can nurture natural growth, relying less on it’s dwindling oil revenues and more on the actual substance of an economy that was far behind on its own people’s needs.

Economic initiatives were implemented that carved out enclaves of liberalisation and created room for private sector development after decades of central planning and stagnation. In the early stages, there were very few Syrian institutional players and the majority of businesses were more casual operations than structured corporations. For the most part, families created informal structures that performed the functions of whatever business endeavour was at hand and morphed effortlessly depending on the requirements of the economic landscape.

Within such a molten framework, it is quite the challenge to both adapt to a changing legal environment as well as to understand how to best capture the opportunities presented by a country’s liberalisation process. By actively pursuing new ventures as the supporting regulatory foundations are laid, local companies facilitate the very development process such new laws aim to achieve; different sectors and industries begin to evolve and grow as they are targeted by reforms from one end and brought to life by actual brick and mortar businesses from the other.

The Khwanda Group has thrived in this respect, consistently negotiating the changing economic terrain of Syria and seeking voids to fill with investment and creativity. As the name suggests, this family-operated venture has grown to become a group of companies with diverse interests spread over differing levels of the economy.

Despite its agrarian roots of working the lands of the Syrian coast and pressing olive oil in a traditional mule-driven mortar, the Khwanda Group made its name as the exclusive distributors of Mazda automobiles in Syria under the patronage of its founder, Mehran Khwanda.

Once Investment Law number 10 was passed in the early 1990s, the one office operation transformed into a trans-national presence affecting the lives of thousands of Syrian families. The law, allowing foreign co-ownership of companies and providing tremendous tax-breaks, paved the way for the Kadmous Transport company to be formed. Today, this passenger transportation business has evolved into a cargo, freight, and money transfer service that employs over 2,500 staff.

From that critical point of Syria’s economic history, the Khwanda Group ventured into a wide array of activities ranging from agricultural farms to phosphate mining, from private banking to restaurant management, even investing in one of Syria’s first holding companies. Importing everything from air conditions to heavy construction machinery, this company began to complement its import activities with forays into Syria’s emerging private sector. As Syria’s economy began to change, the makeup of the companies that the group managed also began to change. Where the economy and the nation’s reforms allowed the private sector to satisfy a certain demand, Mr Khwanda would oftentimes see possibilities and opportunities to positively affect both the company’s bottom line as well as the relevant stakeholders of Syria’s population.

The fundamental idea was to pursue activities that enable the business community and the people it serves to move hand in hand towards a better standard of living. Often, companies in emerging markets may lead economic growth on a macroeconomic level but do not speed up the process in which an increase in GDP eventually leads to an amelioration of a country’s lower class economic and living situation.

    “Our focus is on businesses that have a development angle to them; we try to target opportunities that benefit and provide a service to the country and hopefully improve the average Syrian’s standard of living,” explains Mr Khwanda’s son, Ahmad. He offers the transportation and money transfer company as an example of this: “The margins are lower but Syria’s large lower economic class benefits. We offer our clients services that they would otherwise not be able to afford.” Kadmous Transport’s services are significantly cheaper and considerably less bureaucratic than the alternatives. Compared to formal financial institutions, transfers are made virtually instantaneously with no account setup necessary and for a fraction of the cost.

By being a low-cost leader while remaining competitive on the products and services offered, Khwanda Group has demonstrated how a company can directly affect positive change in the economy in which it operates.

Providing harvest refrigeration and low-cost automated olive oil pressing services for rural farmers are but two examples that may seem miniscule compared to other investment opportunities but do in fact make a significant difference to the clients whose livelihood is directly hinged to such affordable options.

On a larger scale, the group has made every effort to maintain its own expansion pace at the level at which the Syrian economy is mutating. With banking reforms being implemented, substantial investments in the private financial sector were made alongside investors whose aim was to establish the monetary backbone that would support Syria’s development.

The group’s dedication to development does not stop with the goal of job creation and operating within the Syrian economy. Its support extends to cultural and educational endeavours in the community as well as other charitable causes. As part of its socially responsible ethos, the Khwanda Group has supported local emerging musicians, the Syrian National Children’s Orchestra, as well as an annual Syrian Jazz Festival. The group works closely with the Syrian Trust for Development in identifying and tackling important social and cultural issues that need the support of the local community in order to progress. In the past, the group has provided the financial backing necessary for local schools to stay open in the summer time in an effort to provide additional learning opportunities for rural residents and even implemented a programme that offered the necessary materials and assistance for coastal villagers to dig their own water wells.

As firm proponents of various civil society efforts within the country, the group continuously supports organisations that aim to connect expatriates with their local counterparts. In this capacity, the group is a recurring sponsor of the British Syrian Society’s conferences and activities and has contributed positively to the message the outside world receives about Syria.

The Khwanda Group is a prime example of how one can achieve their own business objectives while extending a hand to others around them as part of an intentional effort for everyone involved to benefit and progress. Its successful participation in multiple sectors of the economy as well as its positive effect on Syria’s social and cultural landscapes are undeniable and demonstrate how local efforts can become catalysts for nationwide development. It is these initiatives that effectively take economic development reforms from regulatory theory to real-world practice and translate them into an actual positive difference in the everyday lives of the average citizen.

Shipping Awards 2010

Posted on by Ashton Wenborn

Wherever their clients operate, Shipping Finance teams have the knowledge and the experience to provide definitive advice. Our winners have proven their excellence in this field, working closely with clients to provide commercial, cost-effective solutions that help to maximise returns, manage risks and adjust to cyclical peaks and troughs. They help to organise their clients’ businesses, solve day-to-day problems and settle disputes. And above all they have proven themselves equal to the multinational nature of their business and the need to take advantage of the opportunites inherent in every marketplace in which they operate.

World Finance’s editorial board are pleased to announce the winners for 2010.

Best Shipping Finance Teams

Germany
HCI Capital

Greece
Marfin Egnatia Bank

India
Bank of India

Netherlands
Credit Europe Bank

Singapore
DBS Bank

Switzerland
BNP Paribas

Turkey
Akbank

UAE
National Bank of Abu Dhabi

UK
Sumitomo Mitsui Banking Corp Europe

Global Pension Fund Awards 2010

Posted on by Ashton Wenborn

The pension landscape is changing fast which makes it even more crucial to choose the right pension. The World Finance awards aim to recognise schemes that show the highest level of service to members. Our editorial board have selected country-specific corporations that have demonstrated outstanding products and services.

Pensions and their investment officers were researched and judged on their administrative skills and foresight, and their service and asset gathering. Consultants were judged on the quality of their advice and fund managers for their investment ideas and decisions. Congratulations to the winners.

Pension Fund of the Year, Austria
APK Pensionkasse

Pension Fund of the Year, Belgium
Amonis

Pension Fund of the Year, Brazil
Fundação CESP

Pension Fund of the Year, Canada
OMERS

Pension Fund of the Year, Caribbean
NCB Insurance Company Limited

Pension Fund of the Year, Chile
AFP Cuprum

Pension Fund of the Year, Colombia
Porvenir S.A.

Pension Fund of the Year, Czech Republic
AXA

Pension Fund of the Year, Denmark
Pension Danmark

Pension Fund of the Year, Finland
Varma
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Pension Fund of the Year, France
AG2R

Pension Fund of the Year, Germany
Bayerisch Apothekeversorgung

Pension Fund of the Year, Hungary
OTP Mandatory Private Pension Fund

Pension Fund of the Year, Italy
Fondazione ENPAM

Pension Fund of the Year, Mexico
Afore BBVA Bancomer

Pension Fund of the Year, Netherlands
Philips

Pension Fund of the Year, Norway
Folketrygfondet

Pension Fund of the Year, Poland
Aviva

Pension Fund of the Year, Portugal
BPI Pensoes

Pension Fund of the Year, Russia
Sberbank

Pension Fund of the Year, South Africa
ABSA

Pension Fund of the Year, Spain
Caja Madrid

Pension Fund of the Year, Sweden
Lansforsakringar

Pension Fund of the Year, Switzerland
Pensionkasse SBB

Pension Fund of the Year, UK
University Superannuation Scheme

Pension Fund of the Year, USA
Wisconsin Investment Board

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