Author: Ashton Wenborn

Indian state elections see markets jump

Posted on by Ashton Wenborn

This weekend saw India’s ruling Congress party suffer bruising defeats in many state elections, hinting that it may be in for a tricky general election at the beginning of next year. The news was welcomed by investors in the country, who pushed the stock market up to a record high in early Monday trading.

India’s leading opposition party, the Hindu nationalist Bharatiya Janata Party (BJP), enjoyed three significant state victories, and it appears investors hope that this will translate on the national stage next year. The more business friendly BJP, led by Narendra Modi, has performed well in opinion polls over the last few months, although the result of 2014’s national election is expected to be close.

India’s benchmark Sensex index reached 21,387 in early morning trading, surpassing November’s previous high mark. Investors appear keen on a change in government after years of Prime Minister Manmohan Singh’s Congress Party ruling with indecision, heightened bureaucracy and stagnating growth.

Despite investors hoping that India would see the sort of double-digit economic growth seen in China over the last decade, the country has slumped somewhat in recent years. Businesses have been turned off the country by its notoriously complex bureaucracy, as well as relatively high levels of corruption.

Speaking to the FT this morning, KPMG India’s deputy chairman, Dinesh Kanabar, said that the country’s economy is ready to take off; it just needs a decisive government to kick-start growth. “I strongly feel that the fundamentals of India’s economy are very much in place, that the growth story which was evident three years back is just as relevant today.

“A decisive government, of whichever party, will put this period of policy paralysis behind us…I am not making light of some of the structural issues, but am convinced that a stable government can deal with them and put India back on track for eight percent growth or more.”

HSBC considers floating in London

Posted on by Ashton Wenborn

It has been reported that HSBC has been approaching investors about potentially floating its UK arm on the London Stock Exchange. The move would cash in on its position as Britain’s largest bank, and address new regulations that demand retail banking operations are ring-fenced from investment banking.

The Financial Times has reported that over the last few weeks the bank has been asking investors if they would be in favour of a potential sale of a considerable stake in the UK arm of HSBC. The newspaper also suggested that the matter had been raised informally at board level.

It has been estimated that a floatation of the UK arm of the bank could be worth up to £20bn. It has been speculated that the potential floatation, which is said to be in its early stages, could be of up to 30 percent of the total UK retail and commercial operation.

New EU state aid penalties imposed after the series of government bailouts have led to a series of banks, including Lloyds and RBS, to announce upcoming floatations of their subsidiaries. The so-called Vickers Rule demands that banks ring-fence their retail operations, including customer deposits and small business loans, from any sort of investment banking activity.

Though formal separation is not compulsory under the rule, the many large banking institutions are taking it one step further and floating their retail businesses. There have been suggestions that Virgin Money and Santander could float part of their retail operations soon.

“Given the trouble you have to go to to establish a self-contained operation, with its own capital and governance, you might as well go the whole hog and spin it off,” one executive who knows HSBC well told The Daily Telegraph.

HSBC has been vocal about its distaste for the ever-increasing costs of being a regulated bank in the UK. Because of the sheer volume of its UK operations, it is expected that HSBC will contribute up to 40 percent of the industry bank levy imposed by the Treasury – a figure to the tune of £900m this year. Recently the bank has even suggested moving its headquarters from London to Hong Kong, though that seems to be largely off the table for now.

The FT suggests that executives believe that a UK floatation would also make sense in terms of upcoming valuations as it would mean the bank could capitalise on the investor interest in its shares, which could in turn be converted into better ratings for the whole group.

Autumn Statement 2013: Sensible or stagnant?

Posted on by Ashton Wenborn

Just six months ago, economic growth in the UK was stalling. At the budget announcement in March, Chancellor George Osborne was forced to strike a somewhat sheepish tone when he announced that the Office for Budget Responsibility – a group he helped set up – predicted that growth for 2013 would be a measly 0.6 percent – just half the previously forecast 1.2 percent. Osborne was ridiculed for his insistence on making severe cuts to the UK’s budget, stifling any signs of economic growth and prolonging the stagnation of the economy.

However, when Osborne rose from his seat at December’s delayed Autumn Statement, he did so with renewed confidence and a sense of justification. Britain’s economy appears to be back on track, with growth forecasts being raised to 1.4 percent this year. Although many expected him to crow about how he was right all along to pursue austerity – while also handing out a few pre-election gifts to get the electorate back on side – Osborne in fact struck a more cautious tone.

Budget cuts to continue
Dampening the mood, he announced that budgets would continue to be cut over the next three years, signalling a continuation of the austerity measures that got him criticised in the first place. However, this time Osborne has been praised for sticking the course and taking a more responsible attitude towards ensuring the UK economy is balanced and sustainable. How sustainable the recovery is remains to be seen.

Critics have said that a boom in consumer spending and soaring London property prices has buffeted growth. While that may be part of the story, the insistence on streamlining government departmental budgets is certainly helping to create a more sustainable recovery.

Other initiatives announced in the Autumn Statement are also sensible strategies for the country. The bringing forward of the rise in pension age is needed and fair, in light of improving health standards and the ageing population. Bringing foreign property owners into the capital gains tax net is also a welcome move, helping to stem the rampant flow of foreign money into London’s vastly inflated property market.

Signs of life, but there’s still room for improvement
Although Osborne should be applauded for getting the UK’s deficit under control, there is much more than can be done. Ever since the coalition government came to power in 2010 it has promised to invest in the country’s creaking infrastructure. Each year, eye-watering budgets have been announced for projects that include motorways, high speed rail, high speed broadband, and airport expansion. However, each year little progress has been made on any of these projects.

High speed rail has suffered protests and delays, only recently getting parliamentary approval. Funding is yet to be raised – although the Chinese government has signalled it might be willing to invest – and is unlikely to be finished before the mid-2030s. The government should either fully commit to building it – and paying for it – or divert the money towards improving the existing rail network.

Similarly, the woefully inadequate amount of airport capacity in the southeast of England has seen no progress, instead being kicked into the long-grass in the form of Sir Howard Davies’ Airport Commission. Instead of giving the green light to improving Gatwick Airport’s train station and conducting a ‘feasibility study’ into improving links to Heathrow, Osborne should make firmer commitments to expanding capacity at one of the airports.

An idea mooted by London Mayor Boris Johnson to build a hub airport in the Thames Estuary may seem fanciful and expensive, but it is the sort of transformative investment that would attract global investors, and radically improve the UK’s connections to the rest of the world. Constant delaying of a decision on airport expansion is only allowing Britain’s European rivals to storm ahead in connecting to lucrative markets in Asia.

Encouraging signs and sensible decisions have underpinned Osborne’s delayed Autumn Statement, but he must make bolder attempts at building a new infrastructure network in the UK, helping to create a country fit for the 21st century.

China bans banks from handling Bitcoin transactions

Posted on by Ashton Wenborn

Bitcoins have been the talk of the town over the past few months, and have seen their value surge since a US banking commission heard the virtual currency can be useful as a mainstream financial tool. But Chinese officials have now issued a notice banning financial institutions in the country from handling any sort of transaction in which Bitcoins are involved. The value of the digital currency has since taken a stumble after months on the increase.

The People’s Bank of China (PBC) issued a notice this week stating that the virtual currency has no legal status in the country and should therefore, never be used as currency. The notice stopped just short of outlawing the Bitcoin in China, and said that though individuals had the right to buy and sell it, they were doing so at their own risk. The Bank also sought to underline the connections between Bitcoins and money laundering, fraud and criminality.

The PBC said it was banning the virtual currency because it is not subjected to any regulation and is not backed by any government and central authority.

“Although there are people calling it a ‘currency’, it is not issued by the monetary authority, it does not possess the attributes of a currency such as legal repayment and enforcement ability,” the bank said in a statement.

“Judged by its nature, Bitcoin is one particular kind of a virtual product. It does not have the legal status of a currency, and it cannot and moreover should not be allowed to circulate in the market as a currency.

“We have clearly stipulated that at the present moment all financial institutions and payment institutions cannot develop any business related to Bitcoin.”

This position by the PBC puts China at odds with many central banks around the world, which are slowly moving to embrace the Bitcoin. Last month a US Senate hearing was told of the concrete benefits the virtual currency can offer the financial system, despite its link to money laundering and criminal activity. After the hearing, a number of retailers and online merchants started accepting Bitcoins, and its value soared to over $1,100.

However, the Chinese policy reflects the views of many commentators. At the end of November, Alan Greenspan, former US Federal Reserve Chairman, described the soaring value of the Bitcoin as “a bubble” adding that the exchange rate was at an “unsustainable high”, in an interview with Bloomberg.

“There is no fundamental issue of capabilities of repaying it in anything which is universally acceptable, which is either intrinsic value of the currency or the credit or trust of the individual who is issuing the money, whether it’s a government or an individual.”

The PBC said that it would continue to monitor the development of the Bitcoin and it’s trends and risks but that for now, its main focus is to “guide people to correctly understand the concept of a currency as well as investment theory”.

Fed approves revised capital plans for JP Morgan and Goldman Sachs

Posted on by Ashton Wenborn

The US Federal Reserve has announced it has approved the revised capital plans submitted by JP Morgan Chase and Goldman Sachs, in a surprise move. The two banks have been pursuing approval for share buybacks and dividend payments, since March, when the Fed declared there were “weaknesses” in their buyback and dividend provisions. Since then JP Morgan Chase and Goldman Sachs have seen their ability to continue with buyback and dividend plans made conditional on the improvement of their processes.

Since the financial crisis, the Fed has developed a system of stress testing banks in order to determine their ability to resist a shock but remain able to distribute capital. The Fed has finally approved plans by the two banks, after reviewed processes passed these stress tests. In March, the Fed made it clear that it was not blocking plans by the two banks, but only pointing out that there were “significant enough to require immediate attention, even though those weaknesses do not undermine the quantitative results of the stress tests for that firm or the overall reliability of the firm’s capital-planning process,” it said in March.

JP Morgan has gained approval to raise its dividend to 38 cents per share, up from 30 cents in 2013. It has also gained approval to buy back up to $6bn in common stock, though it remains unclear if it will be exercising it.

JP Morgan CEO Jamie Dimon told reporters yesterday that he was “very pleased that the Fed has determined that our process improvements met their expectations. We are grateful to the hundreds of employees who worked tirelessly on our resubmission.”

Goldman Sachs has also acknowledged the Fed’s decision in a statement, but has not commented any further.

With the belated approval of JP Morgan’s and Goldman Sachs’ capital plans, the 2013 Comprehensive Capital Analysis and Review has now given the go-ahead to all 18 banks in preparation for next year’s submissions, due in January. JP Morgan and Goldman Sachs were among four firms forced to revisit their plans before being granted approval.

The problem with predictions

Posted on by Ashton Wenborn

Perhaps the hardest thing to forecast in the economy is turning points: where boom turns to bust, or vice versa. It is relatively easy to argue, for example, that an asset such as housing is overpriced or in a bubble, but much more challenging to predict when the bubble will burst – and still harder to make money on the bet. As John Maynard Keynes is attributed as remarking: “Markets can remain irrational longer than you can remain solvent.”

Indeed, the mere mention of the word ‘bubble’ is not without controversy. Believers in efficient market theory think bubbles are no more than an effervescent illusion, because everything is correctly priced. Eugene Fama – founder of the efficient market hypothesis – admitted in 2007 that “the word ‘bubble’ drives me nuts.” As behavioural economist Robert Shiller wrote in 2009, “you won’t find the word ‘bubble’ in most economics treatises or textbooks… the idea that bubbles exist has become so disreputable in much of the economics and finance profession that bringing them up in an economics seminar is like bringing up astrology to a group of astronomers.”

It is relatively easy to argue… that an asset such as housing is overpriced or in a bubble, but much more challenging to predict when the bubble will burst

Despite these caveats, let’s go ahead and make a prediction. Canadian housing is in a bubble, caused in large part by the existence of extremely low interest rates. The bubble has been assisted by government policy, valuations that boost prices, and a generally gullible media. Now, it’s about to deflate.

Canadian overvaluation
I am not alone in arguing that house prices in cities such as Toronto and Vancouver are looking a little frothy. Two typical ways to measure housing valuations are the price-to-rent ratio and the price-to-income ratio. Earlier this year The Economist wrote that Canadian house prices are overvalued by 78 percent in relation to rents (the highest in their survey of 18 countries), and 34 percent relative to income. An OECD report came up with over-valuations of 65 percent to rents and 30 percent to incomes.

The problem has in a way been the success of the Canadian banking system. In the years preceding the financial crisis, house prices followed a similar upwards trajectory as in the US. When the credit crunch hit, Canadian banks sailed through relatively unscathed. However, the central bank quickly lowered interest rates in concert with other countries, and kept them there to protect the fragile economy. It also extended mortgage periods to as long as 40 years, though that has since been scaled back to 25 years. The result was that house prices took a dip in 2008, but, unlike the US, quickly resumed their upward progress. Canadian housing prices used to track with US house prices, but now a gap of about 50 percent has opened up.

An accurate rating and appraisal system can act as a brake on prices by limiting mortgage availability – but this case may be different. In the 1990s, an automated program known as EMILI was created by the Canadian Mortgage and Housing Corporation (CMHC) as a quick way to determine whether a loan was at risk of default. The program was soon made available to banks for use in assessing mortgage applications.

The aim of the automated system was to make risk assessment quicker and easier. However, the program can be gamed in a number of ways – the easiest being to just enter false information (e.g. boost the square footage). As the Office of the Superintendent of Financial Institutions warned: “Automated models… have their drawback – primarily that they are driven by the sellers’ listings, which often inflates the value of the home.” As seen during the credit crunch, credit rating is a tricky game, where ‘quick and easy’ is no substitute for accuracy, and it might actually be worth visiting the property in question to get an idea of value.

Driven by predictions
The market has also been driven higher by predictions that the market will go higher, or at worst suffer a so-called soft landing. These predictions are supplied by banks and real estate organisations, and regurgitated by major media outlets.

A first question that should be asked about any prediction is whether the forecaster has an interest in the outcome. Financial firms and real estate companies have a lot to lose from a housing bust, so any of their statements should be taken with a pinch of salt (why on Earth would they predict a crash?). For alternative viewpoints you need to go to places like Capital Economics, which for a couple of years now has been predicting a 25 percent slump.

As I argued in Economyths, fluctuations in housing markets are similar to long-term weather patterns such as El Niño. Both are driven by complex, global, interlinked factors. Both are very hard to predict using even the most sophisticated models (in fact simple models often do a better job). And while you might suspect that you are in an El Niño – that is, an overvalued housing market – it is less easy to know when the opposite phase – La Niña, or a fall in prices – will kick in.

The Canadian housing market has defied gravity for years. What will it take to pull it down? It may be that the process is already under way. One clue when analysing the dynamics of a system, be it the weather or the economy, is to look for properties which define a characteristic timescale. In the economy, such numbers are interest rates or inflation, which have units of 1/time (e.g. percent per year). A period with low interest rates and low inflation will often be associated with a lower sense of urgency and correspondingly slower timescales – leisurely booms which extend well past their best-by dates, followed by gradual declines.

As Shiller remarked last year: “I worry that what is happening in Canada is kind of a slow-motion version of what happened in the US.” Instead of a crash, expect a gentle sag. At least until interest rates go up, as they eventually will (an even safer prediction).

Project Finance Deal of the Year Awards 2013

Posted on by Ashton Wenborn

IPP Deal of the Year
$1.58bn – Carrington
ESB Energy International

PPP Deal of the Year
$983m – Via Parque Rimac
Invepar

Project Bond Deal of the Year
$1.69bn – Odebrecht Offshore Drilling Finance
Odebrecht Oil & Gas

Road Deal of the Year
$7.1bn – Prosperity Highways
ANI and BONUS
Banca de Inversion

Hydroelectric Deal of the Year
$774m – Chaglla Hydroelectric power
generation project
Odebrecht

Social Deal of the Year
$66m – Gran Museo del Mundo Maya
Grupo Hermes and the
Governor of Yucatan

Waste Deal of the Year
€135m – Western Macedonia PPP Waste Project
Greek Ministry for Development / PPP Secretariat
Government of Greece

Light Rail Deal of the Year
$438m – Ottawa Light Rail Concession
Rideau Transit Group

Airport Deal of the Year
€3.08bn – Privatisation of Portuguese
Airport Operator ANA
Portuguese Government

High Speed Rail Deal of the Year
$2.42bn – Nimes-Montpellier HSR
Meridiam Infrastructure/Bouygues

Education Deal of the Year
$4bn – Model School Scheme
Government of India

Healthcare Deal of the Year
$250m – Antofagasta Hospital Concession
Sacyr Concesiones Chile SA

MLA of the Year
African Development Bank

Correctional Facilities Deal of the Year
$2.6bn – Mexican Prisons PPP
Mexican Government

Mining Deal of the Year
$1.5bn – SCC
Grupo Mexico

Solar Deal of the Year
$513m – BOKPOORT
ACWA Power Consortium

Wind Deal of the Year
$135m – Chirnogeni Wind Farm
EPGE

Power Deal of the Year
$150m – Power Supply in Ghana
Volta River Authority

Oil and Gas Deal of the Year
$3.5bn – Reficar
Ecopetrol

Sponsor of the Year
Plenary Group

Cluster Deal of the Year
$1.3bn – Integrated Infrastructure
Projects Senegal
African Development Bank

Brownfield Deal of the Year
$5.25bn – Panama Canal Extension
Panama Canal Authority

Greenfield Deal of the Year
$200m – Kwale International Sugar Company
Pabari Investments & Omnicane

Petrochemicals Deal of the Year
$19.3bn – Sadara Chemical Company
Dow Chemical Company & Saudi Aramco

Bridge Deal of the Year
€270m – Henri Konan Bedie Bridge
Ministry of Economic Infrastructure, Cote d’Ivoire Government

Natural Gas Deal of the Year
BRL1.2bn – Parnaíba I
ENEVA

Privatisation Deal of the Year
€310m – Concession of the Tunnels of
Barcelona and Cadi
BTG Pactual and Abertis Autopistas España

Port Deal of the Year
$983m – Rotterdam World Gateway
DP World

Wastewater Deal of the Year
$792m – Atotonilco Wastewater Treatment Plant
Aguas Tratadas del
Valle de México

Refinancing Deal of the Year
€3.5bn – APRR
Eiffage

Insurance Awards 2013

Posted on by Ashton Wenborn

Australia
Non-life
CGU Insurance
Life
OnePath

Austria
Non-life
Wiener Städtische
Life
Finance Life Lebensversicherung

Bahrain
Non-life
Bahrain National Holding
Life
LIC International

Bangladesh
Non-life
Pioneer Insurance
Life
Pioneer Insurance

Belgium
Non-life
AG Insurance
Life
AG Insurance

Botswana
Non-life
Hollard Insurance
Life
Regent Life Botswana

Brazil
Non-life
Porto Seguro
Life
HSBC Seguros Brasil

Canada
Non-life
Economical Insurance
Life
Empire Life

Caribbean
Non-life
Guardian General
Life
Pan-American Life Insurance

Chile
Non-life
BCI Seguros
Life
Consorcio Seguros

Cyprus
Non-life
Trust International Insurance Company
Life
MetLife Alico

Czech Republic
Non-life
Çeská Pojištovna
Life
Komercní Pojištovna

Ecuador
Non-life
Seguros Equinoccial
Life
Seguros Del Pichincha

France
Non-life
Groupama
Life
Crédit Agricole

Gambia
Non-life
International Insurance Company
Life
Capital Express Assurance

Germany
Non-life
Allianz
Life
Zurich Gruppe

Ghana
Non-life
Union Assurance Life Company
Life
Glico Life

Greece
Non-life
Interamerican Group
Life
Euro Life ERB Insurance

Hong Kong
Non-life
AIG
Life
BOC Group Life

India
Non-life
National Insurance Company
Life
SBI Life

Indonesia
Non-life
Asuransi Central Asia
Life
Asuransi Jiwasraya

Italy
Non-life
Generali
Life
Poste Vita

Kazakhstan
Non-life
Eurasia Insurance Company
Life
JSC “Kazkommerts-Life”

Kenya
Non-life
Jubilee Insurance
Life
British American Insurance

Kuwait
Non-life
Gulf Insurance Group
Life
Al-Ahleia Insurance

Malaysia
Non-life
Etiqa Insurance and Takaful
Life
Allianz Malaysia

Malta
Non-life
Middlesea Insurance
Life
MSV Life

Mauritius
Non-life
New India Assurance
Life
Swan

Mexico
Non-life
Compartamos Banco
Life
Met Life Mexico

Mozambique
Non-life
Hollard
Life
NICO Moçambique Vida

Namibia
Non-life
Sanlam Namibia
Life
Old Mutual

Nigeria
Non-life
Leadway Assurance
Life
Staco Insurance

Norway
Non-life
Codan
Life
KLP

Oman
Non-life
New India Assurance
Life
National Life & General Insurance Company

Pakistan
Non-life
EFU General
Life
Adamjee Life

Peru
Non-life
Rimac Seguros
Life
Rimac Seguros

Philippines
Non-life
Standard Insurance
Life
Insular Life

Poland
Non-life
PZU
Life
Generali

Portugal
Non-life
Companhia de Seguro de Creditos (COSEC)
Life
Fidelidade Mundial

QATAR
Non-life
Qatar Insurance Company Co
Life
Q Life Medical

Romania
Non-life
Allianz-Tiriac Asigurari
Life
Grawe România Asigurari

Russia
Non-life
RGS
Life
CiV Life

Serbia
Non-life
Delta Generali Osiguranje
Life
Delta Generali Osiguranje

Seychelles
Non-life
SACOS Insurance
Life
SACOS Insurance

Singapore
Non-life
QBE Insurance
Life
NTUC Income

South Africa
Non-life
Santam
Life
Momentum Group

Spain
Non-life
Mapfre
Life
Mapfre

Sri Lanka
Non-life
Sri Lanka Insurance Corporation
Life
Sri Lanka Insurance Corporation

Sweden
Non-life
If Skadeforsikring
Life
Skandia Liv

Switzerland
Non-life
Schweizerische Mobiliar
Life
Swiss Life

Taiwan
Non-life
Cathay Century Insurance
Life
Cathay Life Insurance

Tanzania
Non-life
NIKO Insurance
Life
Alliance Life Insurance

Thailand
Non-life
Viriyah Insurance
Life
Thai Life Insurance

Turkey
Non-life
Zurich Sigorta
Life
Anadolu Hayat Emeklilik

UAE
Non-life
ADNIC
Life
MetLife Alico

Uganda
Non-life
Lion Assurance
Life
GoldStar Insurance

UK
Non-life
RSA
Life
Standard Life

US
Non-life
Jackson National Life
Life
Lincoln National Corporation

Vietnam
Non-life
Bào Viêt
Life
Bào Viêt

Zambia
Non-life
Goldman Insurance
Life
ZSIC

Oil & Gas Awards 2013

Posted on by Ashton Wenborn

North America
Best Fully-Integrated Company
Chevron

Best Independent Company
Breitling Oil and Gas

Best Exploration & Production Company
Concho Resources

Best Downstream Company
Enterprise Oil

Best Upstream Service & Solutions Company
Schlumberger

Best Downstream Service & Solutions Company
CITGO

Best Drilling Contractor
Ensign Energy Services

Best Investment Company
Alaska Permanent Fund

Best Petrochemical Company
Exxon Mobil

Best Sustainable Company
Suncor Energy

Best EPC Service & Solutions Company
KBR

Best Piping Service & Solutions Company
Willbros Group

Best Port Facility
Houston Fuel Oil Terminal

Best Refining Company
Phillips 66

Latin America
Best Fully-Integrated Company
Petrobras

Best Independent Oil and Gas Company
Parex Resources

Best Exploration & Production Company
Pacific Rubiales

Best Downstream Company
YPF

Best Upstream Service & Solutions Company
Baker Hughes

Best Downstream Service & Solutions Company
Schlumberger

Best Drilling Contractor
Petroserv

Best Investment Company
Guggenheim Securities

Best Sustainable Company
Pacific Rubiales

Best EPC Service & Solutions Company
SoEnergy International

Best Piping Service & Solutions Company
Ismocol

Best Port Facility
GNL Quintero

Best Project
Puerto Bahía, Pacific Infrastructure

CEO of the year
Javier Gutiérrez Pemberthy, Ecopetrol

Western Europe
Best Fully-Integrated Company
Statoil

Best Independent Company
Genel Energy

Best Exploration & Production Company
Parkmead Group

Best Downstream Company
Shell

Best Upstream Service & Solutions Company
Seadrill

Best Downstream Service & Solutions Company
Alfa Laval

Best Drilling Contractor
KCA Deutag

Best Investment Company
Norwegian Government Pension Fund

Best Sustainable Company
SGS

Best EPC Service & Solutions Company
Proserv

Best Piping Service & Solutions Company
Galp Energia

Best Project
Enefit280, Enefit

Best Port Facility
SIOT Marine Terminal

CEO of the year
Paolo Scaroni, Eni SPA

Eastern Europe
Best Fully-Integrated Company
Gazprom

Best Independent Company
Irkutsk Oil Company

Best Exploration & Production Company
Novatek

Best Downstream Company
Bashneft

Best Upstream Service & Solutions Company
Hellenic Petroleum

Best Downstream Service & Solutions Company
Gazprom Neft

Best Drilling Contractor
Eriell

Best Investment Company
Gazprombank

Best Sustainable Company
MOL Group

Best EPC Service & Solutions Company
Aker Solutions

Best Piping Service & Solutions Company
TMK Group

Best Refining Company
PKN Orlen

Best Port Facility
Primorsk Oil Terminal

Best Petrochemical Company
Sibur

Middle East
Best Fully-Integrated Company
Saudi Aramco

Best Independent Company
Genel Energi

Best Exploration & Production Company
JX Nippon Oil & Energy Corporation

Best Downstream Company
Equate

Best Upstream Service & Solutions Company
OES Group

Best Downstream Service & Solutions Company
Gulf Petrochem

Best Drilling Contractor
Global Petro Tech

Best Investment Company
Al Rushaid Group

Best Refining Company
Petrixo Group

Best EPC Service & Solutions Company
Muhibbah Engineering

Best Piping Service & Solutions Company
Petro Gas Piping

Best Petrochemical Company
QAPCO

Best Port Facility
Port of Salalah

CEO of the year
Harib Al-Kitani, Oman LNG

Asia
Best Fully-Integrated Company
PTT Oil and Gas

Best Independent Company
Phoenix Petroleum Philippines

Best Exploration & Production Company
Tethys Petroleum

Best Downstream Company
Sinopec

Best Upstream Service & Solutions Company
China Oilfield Services

Best Downstream Service & Solutions Company
UMW

Best Drilling Contractor
Petrovietnam Drilling and Well Services

Best Investment Company
Shenton Energy Asia

Best Refining Company
Sinopec

Best EPC Service & Solutions Company
PTSC M&C

Best Piping Service & Solutions Company
Canadoil Group

Best Petrochemical Company
PetroChina

Best Sustainable Company
PTT Oil and Gas

CEO of the year
Farong Li, CNOOC

Africa
Best Fully-Integrated Company
Sonatrach

Best Independent Company
Oando

Best Exploration & Production Company
Kosmos Energy

Best Downstream Company
Addax Petroleum

Best Upstream Service & Solutions Company
Sasol

Best Downstream Service & Solutions Company
Nalco Africa

Best Drilling Contractor
Pacific Drilling

Best Investment Company
Diamond Bank

Best Refining Company
Sasol

Best EPC Service & Solutions Company
Chrome Group

Best Piping Service & Solutions Company
WorleyParsons

Best Petrochemical Company
SABIC

Best Sustainable Company
Sasol

CEO of the year
Yi Zhang, Addax Petroleum

Telecoms Awards 2013

Posted on by Ashton Wenborn

Africa
Best Fully Integrated Telecoms Provider
Tele-Enterprise

Best Wireless Provider
MTN

Best Fixed Line Provider
Vodafone

Best Broadband Provider
Vodafone

Best Mobile Broadband Provider
IPNX

Best Cloud Service Provider
Dimension Data

Best Innovation
Liquid Telecom Zimbabwe

Best Equipment Vendor
Neotel

Best Infrastructure Project
African Telecommunications Union

Best Infrastructure Company
Bluwan, Somcable and Globecomm Systems

CEO of the Year
Nick Read, Vodafone

Best Project Finance
Emerging Africa Infrastructure Fund

Best Diversification Strategy
Vodacom

Asia
Best Fully Integrated Telecoms Provider
StarHub

Best Wireless Provider
China Mobile

Best Fixed Line Provider
Indosat

Best Broadband Provider
Hong Kong Broadband Network

Best Mobile Broadband Provider
NTT Communications

Best Cloud Service Provider
Korea Telecom Corp

Best Innovation
SK Telecom

Best Equipment Vendor
Cisco

Best Infrastructure Project
SingTel Mobile

Best Infrastructure Company
Asian Development Bank

CEO of the Year
Napoleon Nazareno, Smart

Best Project Finance
US Export Import Bank, AsiaSat Comms Indonesia

Best Diversification Strategy
Smart Communications Indonesia

Australasia
Best Fully Integrated Telecoms Provider
Telstra

Best Wireless Provider
2 Degrees

Best Fixed Line Provider
iPrimus

Best Broadband Provider
Motion Telecom

Best Mobile Broadband Provider
Virgin Mobile

Best Cloud Service Provider
Datacom

Best Innovation
Tasman Global Access Cable

Best Equipment Vendor
Ericsson

Best Infrastructure Project
New Zealand Government, Rural Broadband Initiative

Best Infrastructure Company
LendLease

CEO of the Year
David Thodey, Telstra

Best Project Finance
LendLease

Best Diversification Strategy
Optus Mobile

Eastern Europe
Best Fully Integrated Telecoms Provider
Netia

Best Wireless Provider
Magyar Telekom

Best Fixed Line Provider
Netia

Best Broadband Provider
Mobitel

Best Mobile Broadband Provider
T-Mobile

Best Cloud Service Provider
Neostratus

Best Innovation
Ericpol

Best Equipment Vendor
Nokia Solutions and Networks

Best Infrastructure Project
Datagroup

Best Infrastructure Company
RTEC

CEO of the Year
Miroslav Rakowski, T-Mobile

Best Project Finance
ING CB

Best Diversification Strategy
MTS Russia

Latin America
Best Fully Integrated Telecoms Provider
Oi

Best Wireless Provider
Tim Brasil

Best Fixed Line Provider
Telmex

Best Broadband Provider
Telmex

Best Mobile Broadband Provider
Sky Brasil

Best Cloud Service Provider
Telefonica

Best Innovation
Telmex

Best Equipment Vendor
Ericsson

Best Infrastructure Project
Tim Fiber

Best Infrastructure Company
América Móvil

CEO of the Year
Hector Slim Seade, Telmex

Best Project Finance
HSBC

Best Diversification Strategy
Telecom Italia Mobile

Middle East
Best Fully Integrated Telecoms Provider
Integrated Telecom Company (ITC)

Best Wireless Provider
Batelco

Best Fixed Line Provider
Saudi Telecom

Best Broadband Provider
Du

Best Mobile Broadband Provider
Etisalat

Best Cloud Service Provider
Cloudex

Best Innovation
Etisalat

Best Equipment Vendor
3M Gulf

Best Infrastructure Project
Cyan Inc

Best Infrastructure Company
Integrated Telecom Company (ITC)

CEO of the Year
Ghassan Itani,
ITC

Best Project Finance
3M

Best Diversification Strategy
Vodafone Qatar

North America
Best Fully Integrated Telecoms Provider
AT&T

Best Wireless Provider
Verizon

Best Fixed Line Provider
Sprint Corporation

Best Broadband Provider
Comcast

Best Mobile Broadband Provider
One Zone Network

Best Cloud Service Provider
Verizon Terremark

Best Innovation
Cricket Wireless

Best Equipment Vendor
Pics Telecom

Best Infrastructure Project
Verizon

Best Infrastructure Company
Cisco Systems

CEO of the Year
Lowell Mcadam, Verizon

Best Project Finance
Urban Green Energy

Best Diversification Strategy
AT&T

Western Europe
Best Fully Integrated Telecoms Provider
BT

Best Wireless Provider
KPN

Best Fixed Line Provider
TDC

Best Broadband Provider
Kabel Deutschland

Best Mobile Broadband Provider
Vodafone Germany

Best Cloud Service Provider
Rackspace

Best Innovation
Comptel

Best Equipment Vendor
Alcatel Lucent

Best Infrastructure Project
Clarke Telecom

Best Infrastructure Company
Alcatel Lucent

CEO of the Year
Guy Laurence, Vodafone

Best Project Finance
European Investment Bank

Best Diversification Strategy
BT

Hedge Fund Awards 2013

Posted on by Ashton Wenborn

Europe

Best Distressed Securities FOHF
Morgan Stanley AIP Distressed Fund (Morgan Stanley Alternative Investment Partners AIP)

Best Diversified FoHF
Headstart FOHF (Headstart Advisers)

Best Emerging Markets FoHF
Finles Lotus Fund (Finles Capital Management)

Best Event Driven FoHF
HSBC Special Opportunities Fund (HSBC Alternatives)

Best Fixed Income FoHF
Morgan Stanley AIP Select Mortgage Fund (Morgan Stanley Alternative Investment Partners AIP)

Best Global Macro FoHF
GHF Sicav Global Macro Fund (Thalìa)

Most Innovative FoHF
Areca Value Discovery Fund (Ayaltis AG)

Best Long/Short Equity FoHF
AlphaGen Perseus Fund (Henderson Global Investors)

Best Market Neutral FoHF
FRM Equity Alpha Fund (Financial Risk Management)

Best UCITS-Compliant FoHF
Dynamic Alternative Strategies (Goldman Sachs)

Best Institutional Fund Provider
The Man Group

Best Managed Platform Provider
dbSelect

Best Managed Futures CTA FOF
Abbey Global (Abbey Capital)

North America
Best Managed Futures CTA FoHF
JLC Managed Futures Fund (JLC Futures Management)

Best Distressed Securities FOHF
Alternative Investments International (Alternative Investments International)

Best Diversified FoHF
Magnitude US Partners (Magnitude Capital)

Best Equity Long/Short FoHF
Biema Value Fund (van Biema Value Partners)

Best Fixed Income FoHF
Corbin Opportunity Fund (Corbin Capital Partners)

Most Innovative FoHF
Arden Alternative Strategies Fund (Arden Asset Management)

Best Institutional Fund Provider
Arden Asset Management

Best Managed Platform Provider
AlphaMetrix

Asia Pacific
Best Equity Long/Short FoHF
Asian Capital Holdings Fund (Banque Privee Edmond De Rothschild)

Best Institutional Fund Provider
MCP Asset Management

Best Private Client Fund Provider
Value Partners Group

Best Diversified FoHF
Vision Asia Maximus Fund (Vision Investment Management BVI)

Offshore
Best Distressed Securities FOHF
Antarctica Credit and Distressed Fund (Antarctica Asset Management)

Single Funds

Europe
Best Arbitrage Fund
ABCA Opportunities (ABC Arbitrage Asset Management)

Best Credit Fund
Alcentra

Best Distressed Securities Fund
Argo Distressed Credit Fund (Argo Capital Management)

Best Diversified Fund
Portland Hill Overseas Fund (Portland Hill)

Best Emerging Markets Fund
VTB Capital Russia and CIS Equity Fund (VTB Capital Investment Management)

Best Event Driven Fund
OVS Capital Fund, (OVS Capital Management)

Best Fixed Income Fund
Triple Opportunity Fixed Income Fund (Finanz Konzept AG)

Best Global Macro Fund
North MaxQ Fund (North Asset Management)

Best Long/Short Equity Fund
Trias L/S Fund (Entrepreneur Partners)

Best Managed Futures CTA Fund
V-Pro Volatility Program (Quaesta Capital)

Best UCITS-Compliant Product
Hadron Alpha Select Fund (Hadron Capital)

Best Market Neutral Fund
Jackdaw Real Estate Fund (Jackdaw Capital)

North America
Best Distressed Securities Fund
Hildene Opportunities Fund (Hildene Capital Management)

Best Fixed Income Fund
Perella Weinberg Partners Asset Based Value Fund (Perella Weinberg Partners)

Best Global Macro Fund
MKP Opportunity (MKP Capital Management)

Best Long/Short Equity Fund
Nokomis Capital Master Fund (Nokomis Capital)

Best Managed Futures CTA Fund
Global Diversified Fund (FORT LP)

Best Relative Value Fund
Phalanx Japan Australia Multi-Strategy Fund (Phalanx Capital Management)

Latin America
Best Emerging Markets Fund
BAF Latam Trade Finance Fund (BAF Capital)

Best Long/Short Equity Fund
Brazilian Equities (Pollux Capital)

Best Managed Futures CTA Fund
Quantum Leap (Quantum Leap Capital Management)

Best Relative Value Fund
Long Only (Perfin Investimentos)

Best Global Macro Fund
Alpha HG Fund (Credit Suisse Hedging-Griffo)

Best Fixed Income Fund
Moneda Latin American Corporate Debt (Moneda Asset Management)

Asia Pacific
Best Fixed Income Fund
RV Capital Asia Opportunity Fund (RV Capital Management)

Best Diversified Fund
Segantii Asia –Pacific Equity Multi-Strategy Fund (Segantii Capital Management)

Best Event Driven Fund
Pengana Asia Special Events (Pengana Capital)

Best Global Macro Fund
BIA Pacific Macro Fund (Ballingal Investment Advisors)

Best Long/Short Equity Fund
Thai Focused Equity Fund (Quest Management)

Best Managed Futures CTA Fund
Asian Markets Alpha Strategy (Cambridge Strategy Asset Management)

Best Emerging Markets Fund
Looks Absolute Return Fund (Looks Asset Management)

John O’Rourke on PPPs | Plenary Group | Video

Posted on by Ashton Wenborn

Taking pride in adopting a holistic approach to delivering projects, Plenary Group is an international infrastructure business with large, experienced management teams in the Americas and Asia Pacific region. John O’Rourke, Principal of Plenary Group, discusses some of their ongoing developments.

World Finance: Let’s begin with an overview if you would of the PPP markets in Australia, Canada, and the US.

John O’Rourke: Well, let’s start with Australia, which is where Plenary kind of grew up. It’s a very sophisticated, aggressive bidding market for PPPs, it always has been on both the consortia side and from a government perspective. And it probably really punches above its weight in terms of competition for a relatively small number of projects that come to the market.

Canada has been a fabulous market for us, it’s got all the same characteristics around infrastructure and the way infrastructure is procured. I think what they’ve done particularly well in Canada is that the policy commitment to PPPs has been strong, and that’s led to a very consistent pipeline of projects, and that’s allowed industry to really develop up around it. So you’re now seeing the first of the Canadian projects come into operation, and really seeing some outstanding outcomes I think coming from those projects.

The US is still prospective, we’ve followed it for a long time, but I think my North American colleagues are much more optimistic that its time is coming and there’s some momentum building around some jurisdictions, and we are keen to selectively pursue opportunities in the US market.

“In Canada, bond markets were quick to take advantage of the long duration, senior debt, lower risk opportunities that were available”

World Finance: You mentioned the similarities between the Australian and Canadian models, what are the differences in the debt and equity project finance markets there, and what lessons, if any, can they learn from each other?

John O’Rourke: I think probably a key difference that we’re seeing is around debt and the bond markets.

The Canadian market recovered very strongly post-GFC, and bond markets were quick to come back to the infrastructure space and take advantage of the long duration, senior debt, lower risk opportunities that were available. We haven’t seen the bond market come back into PPP in Australia, and at the moment there doesn’t appear to be that appetite. So we’re reliant on the bank debt market, which is OK, but it’s a market that’s limited by tenure, and therefore there’s additional risks for equity in refinancing.

So if you said what’s a key lesson, I think it’s well, what are the factors that have led to the bond market being rejuvenated in Canada, and can we apply some of those incentives and learnings in Australia and reactivate that market? I think it’s very important for the pipeline coming forward.

World Finance: So what challenges do project sponsors face in these markets?

John O’Rourke: As a project sponsor at Plenary, I think the biggest challenge is just the unrelenting commitment that’s needed to hard work across these processes. They are very complex projects, long lead times, lots of different risk issues: through the bidding phase, construction and into operations. And as a sponsor I think it’s moved way beyond the days of saying we’re here to arrange a transaction. As a sponsor your role is to provide leadership and support to a whole array of consortium partners.

But to be able to pull all that together and deliver to government in a coherent way, a single value for money bid, we invest equity in every project that we participate in. And therefore it’s not just about winning projects, it’s about making them sustainable, and making them work in the long term to deliver the investment returns. So there’s a lot of rolling up of the sleeves to bring all of that together.

“They set a bar of saying they want this facility to be ranked top 10 in the world. That is a high bar in Australian terms”

World Finance: Let’s talk about one of your actual projects then, the Victorian Comprehensive Cancer Centre. A very exciting project, very interesting; what did the state want from it, and how did Plenary Group work to achieve that?

John O’Rourke: Yeah it is a very exciting project, it was born out of the state government saying that Melbourne, the City of Melbourne, has particular strengths in healthcare and medical research, and how could it leverage those into a single cancer facility? And they had a very high aspiration, they set a bar of saying they want this facility to be ranked top 10 in the world.

That is a high bar in Australian terms. We came at that in saying well, we needed a consortium that first and foremost is going to be robust across all of the disciplines, so financially strong but also technically capable across all of the elements that are required to bring a project like that together. And I think the other important thing that we did was to bring in some creative thinking into the consortium, including people that hadn’t necessarily been involved in PPPs before, to give the project that spark that met the aspiration of the state.

World Finance: The theme of collaboration was very important for this project, how did that influence your approach?

John O’Rourke: Yeah absolutely, from the government’s perspective it is all about collaboration. They were relocating six public institutes into one facility, so the task on the consortium side was to say, how are we going to integrate that in a functional, efficient, cost-effective way? So the focus on teamwork around that, and then applying that to the government client, was really crucial.

And then I think you look at the whole and then say, again, the aspiration is high and it needs to be a really significant architectural statement. There’s a budget, we have to meet the budget, and have a finance structure around it, but the building needs to look beautiful. And I think that’s what we’ve achieved, it’s a really significant site and it’s a project that I think is going to win a lot of awards, beyond finance and PPP.

World Finance: Where is the project right now, how far down the timeline are you?

John O’Rourke: We have a target completion date at the end of 2016, so we’re about a year and a half into construction, and so far so good. It’s all on track, on time, and on budget.

“We’re very keen to see whether our skills as a sponsor can be translated into those technically challenging projects”

World Finance: And finally, looking to the future: what innovations, what projects, do you have to look forward to?

John O’Rourke: Around innovations I think an exciting development has been governments – both in Australia, and in our North American markets – looking to see whether the availability model that has been successfully applied in social infrastructure projects like the cancer centre, can also be applied in the civil space around major transport projects. Rail particularly, and road. So we’re very keen to see whether our skills as a sponsor can be translated into those technically challenging projects, but very large volume opportunities, so we’re very excited about that. And probably lastly the US, as I mentioned, our North American colleagues; the next 3-5 years is going to see some real momentum and we’re excited to pursue those.

World Finance: John, thank you very much.

John O’Rourke: Thanks Paul.

Shehu Dikko and Mohammed Audu | Deanshanger Project Limited | Video

Posted on by Ashton Wenborn

Deanshanger Project Limited is comprised of three companies that focus on all aspects of project development, finance, and investment. Its CEO Shehu Dikko, and COO Mohammed Audu, discuss some of the challenges and risks involved in infrastructure development in Nigeria.

World Finance: Shehu, first tell us about Deanshanger and what you offer your clients?

Shehu Dikko: Basically we are a project development, finance, investment, and management company, with core interests in the areas of social development, real estate, energy, agriculture, and PP projects.

At the moment we have quite a number of projects in place in the footfall of the company. What we bring to the table basically is the expertise and the diverse experience of the group, there from the Deanshanger Limited. We are coming from a diverse group from the finance world, from the project management side, from the inter-relations side, and we come together. And so, we bring a diverse experience, and above all the commitment of the group and the partners to most importantly show that whatever we do we add value.

We are involved in projects that will add value to society and to the system, above all. And to ensure we deliver our projects professionally, within the context of the specifications, and the time frame that we envisaged, and above all the budget required and in place for the project.

“One of the biggest challenges that we have is the government being able to meet their obligations”

World Finance: Mohammed, what are the risks involved with PPP projects, and what options are there to mitigate these risks?

Mohammed Audu: The framework of the PPP projects ensures that the private sector makes the initial investment, then the public sector helps the private sector to recoup this investment afterwards. One of the biggest challenges that we have is the government being able to meet their obligations. In light of the fact that there are loads of projects on the hands of the government, and they have limited resources to execute these projects.

The second issue is the issue of political risk. Back in Africa, of course you know, government policies change with governments. If the government who is in power now has encouraged PPP and these kinds of projects, and they leave power after a few years, there’s every likelihood that the policy of the next government could change. If this happens there is potential danger for PPP projects because there is no continuity. But what has been done is that the government has come up with an institution called the Infrastructure Construction Regulatory Commission.

This commission is in charge of ensuring that the government meets its financial obligations, and has provided some sort of contingent liability in their budgets. And then where there is a change of government, they ensure that the policy change is controlled in such a way that it doesn’t affect PPP projects. This has been the way that Nigeria has been able to deal with these risk factors.

World Finance: Shehu, one of your core areas of business has been in infrastructure development, tell us about some of the opportunities offered by the private sector.

Shehu Dikko: There are diverse opportunities available, certainly within the context of the Federal Capital Territory Administration. Under the present transformation agenda of the federal government of Nigeria, within the FCT is a city being developed under the federal capital of Nigeria. There are a lot of opportunities to develop the city.

Within the last 35 years or so, only around 30 percent of the city has been developed. So there are huge, huge opportunities to get the private sector involved with the public sector. In addition to that, the city has investment opportunities within the railway sector – they are trying to develop the light railway within the city of course – and other investment opportunities develop with that. Therefore what the private sector needs to do, is to come together to put their acts together to see how they can partner with the public sector, by putting out the right business case, to make the project available, realistic, get the right finance involved and in place, and also get the right technical and managerial capabilities to deliver projects.

“On the international scene, we have the risks of the foreign exchange fluctuations”

World Finance: Mohammed, if you can talk also about the challenges you’ve faced in financing local and international infrastructure development?

Mohammed Audu: The first challenge, a local challenge, is with local banks. PPP is more or less a new concept in Africa, so local banks don’t really have the capacity to understand what the framework of the PPP is, and as such, make it very difficult to put together the project and be able to fund the project.

Now, on the international scene, one of the things that we have is the risks of the foreign exchange fluctuations, because local currencies back in Africa are very volatile, and if you don’t have hedging instruments to hedge against these enormous fluctuations, it may become very difficult to fund, because it may not be profitable for the banks and the projects may potentially run into financial trouble if it’s not done. So what the Central Bank of Nigeria is doing is trying to put together a hedging instrument, you know, to mitigate against these kinds of situations, so that people can borrow money at a fixed amount even for the future.

World Finance: Mohammed, finally, what are some of the difficulties that can arise in the operation and management of PPP projects, and how do you overcome these?

Mohammed Audu: A few of the difficulties come from issues like the government trying to come together to do business with the private sector, and these are distinctly different because the culture of the public sector is different from the culture of the private sector.

What we have been able to do in this case is to hire an independent consultant on behalf of the public sector, to be able to keep up with the speed of the private sector, because if you don’t do that the process of deciding what to do in a situation might take a very long time and this may impact on the financing.

There’s one second issue which is quite important, which is the issue of resettling people who have been in an area. For instance, if you’re doing an infrastructure development like we’re doing, the people who have been there have been there for 50 or 100 years and that’s where their livelihood has been, their farmlands are there, and everything. Now having to relocate them from that place is very difficult, but what we’ve been able to do in our case is that we’ve been able to go into the community, warm up with the community, with the community leaders and everything, and employ some of them, give them jobs with the projects, and then at the same time try as much as possible to compensate them adequately for whatever trees, economic crops, and anything that is taken away from them, so that they don’t feel the pinch of having to relocate from that place. And then the government has also provided a resettlement grant for them, so those houses have been built already by the government, so what we do is aid the process of relocating them from one place to where the government has provided for them. This is how we have been able to deal with the issues.

World Finance: Mohammed, Shehu, thank you.

Mohammed, Shehu: Thank you very much, thank you.

Russell de Mel | National Development Bank | Video

Posted on by Ashton Wenborn

NDB Bank has been one of the largest sources of medium and long-term project finance in Sri Lanka since 1979. In 2001, NDB entered commercial banking by acquiring ABN Amro Bank’s SL operations. Discussing the development of NDB Group is Russell de Mel, CEO of NDB Bank.

World Finance: So introduce us to NDB and describe the evolution of the company.

Russell de Mel: When we initially got into banking, we felt that being a late entrant into this sector, which is highly competitive, we would someday have to operate to a differential business model, and that there ought to be some functions that need to supplement banking. And it was capital markets that we opted for, and also supported by insurance.

So over the years, the banking segment has expanded to take on commercial banking and retail banking, from the project finance banking and SME banking that we had initially. On the capital markets side, we’ve expanded into investment banking, stockbroking and wealth management. We had an investment in insurance which we divested recently, but we still have a product offering on bancassurance.

And now we are positioned to what we always wanted to be: a one stop shop for all business and financial needs of the country, and we’ve very successfully accomplished this. And I think the times are very opportune for us to really leverage ourselves and forge ahead.

“We are unique in terms of a human resource and we position ourselves in fact as a knowledge hub”

World Finance: So amid this expansion, how have you differentiated yourselves from your competitors?

Russell de Mel: Well, we have a unique group structure as I just mentioned. The combination of banking with capital markets, and that’s supplemented and supported, ably supported, by a very unique human capital base.

On the one end we have the professional bankers, at the other end we have the high end CFAs, and in between we have lawyers, accountants, engineers, stockbrokers, wealth planners. So we feel that we are unique in terms of a human resource and we position ourselves in fact as a knowledge hub. There is quite a distinct advantage when you focus on advisory, because we feel that transaction will always follow.

Sri Lanka is emerging, and investment is very vital to promote growth, and we can play a vital role in directing the right investment into the right sectors, and providing the right advice. So we look forward to very interesting times. You know the one stop shop concept, coupled with the knowledge hub, we lead a great advantage vis-a-vis RPS.

World Finance: Against the emerging growth of Sri Lanka’s economy then, where do you place NDB, and what’s the growth story there?

Russell de Mel: All banks have a moral obligation to be an integral part of this growth phase, but the NDB Group has a bigger responsibility given our strength and core competencies.

Today Sri Lanka is planning to achieve rapid economic growth, and as I said, growth is spurred by investments: both locally and taken with a local entrepreneurs, as well as bringing the foreign investments to the country, which is much desired.

We have an investment bank in Bangladesh, we have an MOU with DBS Singapore, we have a leasing company in the Maldives. What foreign investors are looking for today is a trusted portal. Once you have an idea to start an investment or a project, the series of activities that go along with it from the conceptualisation stage to preparation of the feasibility, identifying investors, raising the finances and if anyone wants to exit to the stock market, or “play the stock market” and exit, no other entity of within our peers can offer this range of activities. And we feel that this is the cutting edge, and we are very well placed to capitalise on the emerging situations, emerging activities, and forge forward.

“All banks have a moral obligation to be an integral part of this growth phase”

World Finance: You talked earlier about developing your business lines, how important is it to merge both wealth management and capital markets with core banking?

Russell de Mel: Through our wealth management entity, we are offering the investors a range of products, because today investors are very intelligent. They know what their risk appetite is, so what we have done is coupled risk appetite with the commensurate returns, so the investor would know this is my risk appetite, with this kind of risk appetite, this is the kind of return I can expect. And then maybe if I invest on this product, and some of these products are driven online so he or she can monitor the progress the investments over a period of time.

We manage large funds, and wealth management is imaginably one of the best corporates within the NDB Group, so as I said earlier, capital markets with wealth management and insurance, insurance also has different products, we are in a position to really position NDB Group way above our peers.

“We spend a lot of time training our people and guiding them towards a group we share”

World Finance: Finally, what’s the strategic vision for NDB over the next few years?

Russell de Mel: Well, we’ve been growing ever since we were formed in 1979, in fact I’ve been very much involved in this change process, and one thing that I need to respect within the group is that when a change takes place, it’s not when the balance sheet records your investment but it’s when the people and the people believes in the change that the real change takes place.

So we spend a lot of time training our people and guiding them towards a group we share, and that we’ve accomplished now. When a client walks in, our vision is to help them sign one mandate which is shared right across the group, across all the products, and at the end of the month, he or she will receive one statement giving the transactions on the assets and the liabilities. This is not a far fetched dream, we started on it many years ago, we are finding the IT platform because it has to be driven by information technology, and we are heavily leveraging on IT, so that is my dream and I am sure that the NDB Group will be achieving this dream very soon.

World Finance: Russell, thank you.

Russell de Mel: Thank you so much Nick.

Mengxi Guo on the changing landscape of forex | OctaFX

Posted on by Ashton Wenborn

OctaFX provides forex brokerage services to its clients in over 100 countries around the world. Talking about the current market realities and some of the latest developments at OctaFX is Mengxi Guo, Head of the Asia Pacific Region Development Department at OctaFX.

World Finance: The European crisis has obviously had an impact on the forex industry, what challenges has it presented for you?

Mengxi Guo: Well, more liquidity and more volatility, and also prices involved both for brokers and traders. It might also cause some kind of panic attack, especially when things were not that good in Spain, Greece and Cyprus. So our challenge was, and remains, to let our customers know that things are eventually going to be all right.

“The STP broker models that we implemented make our clients risk-covered”

World Finance: And how do you plan to overcome these challenges?

Mengxi Guo: When we talk about the crisis, actually it’s not a big problem, because the STP broker models that we implemented make our clients risk-covered and also off-setting the interim bad market, so we have our clients completely backed up. And also, when we talk about risks for one it might be threatened, but for others it might be the great opportunities, and there are lots of success stories in the market.

World Finance: Opportunities you mentioned there, so tell us about the opportunity for the Asian financial market.

Mengxi Guo: Well, I can talk for ages about that, and we know that the world has become indeed global, and more and more people are interested in investment, including the forex trading, so now we are getting huge demand from the Asian market, and we expect rapidly to fulfil this market.

“It’s no longer the world of single traders”

World Finance: Tell us about some of the ways that you think the foreign exchange industry and market has changed over the last few years.

Mengxi Guo: There is a remarkable trend for networking betraying traders, and now it’s possible for them to communicate and also learn from each other, with mobile and also some stationary devices, at any time and at anywhere and also at high speed. And this really changes the whole picture because now the interaction becomes truly instant and the time of grosses has gone. So it has never been so easy to share the trading signals and also even some particular trades.

So now we are in 2013, and it’s no longer the world of single traders. It’s an immense global community, so we are actually doing our best to make sure that all the opportunities are explored and offered to our clients. And I can’t tell you how excited I am about the future of forex trading in general.

World Finance: So what do you say to those who doubt the viability of forex as an investment option?

Mengxi Guo: We need that indeed, the forex trading is quite risky, so there’s no doubt that it must be taken very seriously and responsibly. But on the other hand, we know the forex market is the most volatile market in the world, and lots of success stories speak for themselves. So we think that reasonable, responsible, and rational forex trading might be one of the best investment options that our clients ever had. So actually, I can’t hardly imagine some other investment approaches are as global or as easily accessible to our clients as forex trading.

“In general customer services are becoming better and better”

World Finance: Finally then, what are some of the latest developments at OctaFX?

Mengxi Guo: The industry is growing rapidly and now we see the customer service levels has reached its height, which is really hard to imagine five years ago. In general the customer services are becoming better and better, and also more easily accessible to our clients. So I’m really proud to work in brokerage which is at the cutting edge of these changes.

World Finance: Mengxi, thank you.

Mengxi Guo: Thank you Nick.