Dear Reader,
We are proud to have held Cash&Trade’s first roundtable discussion in the MENA region. More are to come based on the success of our first in the Kingdom of Saudi Arabia, at which transaction banking was the subject of discussion.
At this time, the importance of cash and trade solutions has never been so vital, competitive and demanding for both bankers and their customers.
With this in mind, Saudi banks continue to invest heavily in resources, products and technology to help meet their customers’ requirements when it comes to financing trade and managing their payments, collections and optimising their liquidity management in an efficient and effective manner.
With the support and infrastructure made available by the central bank, SAMA, Saudi banks have deployed technology most successfully, thereby stepping up services and adding value. Simultaneously, they have introduced tailormade solutions to the market to secure a bigger share of business from their customers. This has not just enhanced their revenue but has allowed them to compete with global banks.
Many challenges lie ahead in an uncertain global economy, but the representatives of the kingdom’s leading banks who attended are well prepared for what 2012 throws at them.
On the subject of the future, another article in this issue invited MENA corporate treasurers to gaze into a crystal ball. Global financial crises, Basel III and emerging market demand are just three big issues that they will have to wrestle with in the coming year.
Already, they are preparing for a busy time ahead by ensuring that their companies have adequate access to funding, as well as appropriate cash management and hedging strategies in place.
Increasingly, global issues, such as Europe’s sovereign debt crisis and the possibility of worldwide economic downturn, are adding to their concerns – despite having had an insignificant impact on regional economies so far.
“Generally, neither corporates nor banks in the MENA region are exposed to Europe so the eurozone crisis has had little impact,” said one, who noted that the region is still experiencing positive GDP growth, particularly in GCC countries, which is enabling high levels of investment.
However, he added, “Should there be a major global economic downturn, this could impact the price of oil, and this in turn would have consequences on the level of government spending, thereby affecting the growth of the region.”
Another also believed that external pressures could affect the price of oil. His view was that there were “two schools of thought. One is that if demand from China and other emerging market economies continues at the current pace, then this will keep the oil price where it is. The other is that if there is a meltdown as a result of the eurozone crisis, and demand falls overall, then this will reduce the price of oil. This could impact budgets and spending in the GCC region, but probably not in 2012”.
In this issue, we also look at the potential unforeseen impact that Basel III might have on trade, according to a report by the International Chamber of Commerce’s Banking Commission.
Based on the report’s key findings, the ICC hopes that new Basel regulations will not constrain trade finance supply and that standards-setters and policy makers should study, carefully, possible detrimental effects that Basel III changes might have on trade.
But, whatever is to come on the economic front, it is our hope that all our readers, personally, will enjoy a happy New Year.