January 2016

World trade growth is slowing. Its future may depend on internal trade within a handful of discrete, powerful regions—especially Asia. 

Bulgaria’s multilingual workforce attracts foreign investors, but corruption is a problem.

Traditional banks are pulling back from lending to small and midsize businesses. Just as happened in the US, funds are filling the void.

Corporate treasurers are parking more cash in separately managed accounts, which can be customized to their investment needs—and often beat money-market-fund returns.

The $5 trillion-a-day foreign exchange market is changing rapidly, as electronic execution platforms control the bulk of trading and bank dealers streamline operations in response to growing pressure from regulators to cut trading risks and boost capital. 

Q+A
David Newns, global head of State Street’s Currenex, says the diversity and liquidity provided by ECN (electronic communications networks) trading are keenly important to banks.
 

Profiles of the 2016 FX Award Winners by Region and Category

Criteria for choosing the winners included transaction volume, market share, scope of global coverage, customer service, competitive pricing and innovative technologies. Global Finance also considered input from a panel of experts and feedback from industry analysts, corporate executives and technology specialists.

The $5 trillion-a-day foreign exchange market is changing rapidly, as electronic execution platforms control the bulk of trading and bank dealers streamline operations in response to growing pressure from regulators to cut trading risks and boost capital. 

Q+A
Richard de Roos, global head of foreign exchange, Standard Bank, says a deep understanding of client needs comes over time, with continuous engagement and constant feedback.

Q+A
Marc Zaffran, head of FX sales at Societe Generale Corporate and Investment Banking, says clients are looking more closely at how and why they hedge.

Q+A
Michael Curran, head of foreign exchange, BNY Mellon Markets Group, sees blockchain technology as the FX market’s key innovation.
 

Tom Manning, affiliate partner at Waterstone Management, has been advising global companies on China, and vice-versa, for years. The onetime CEO of Ernst & Young Consulting Asia, Capgemini Asia, Cerberus Asia and Indachin, and former senior partner at Bain, sat down with Global Finance to discuss the nation’s quiet innovation revolution.

Kuwait Financial Centre (Markaz) has been among the Arab region’s leading asset management and investment banking institutions since 1974. Speaking with Global Finance, CEO Manaf Alhajeri explains that economically challenging times have a bright side: a chance to find value for long-haul investors.

In November the European Investment Bank published its latest Bank Lending Survey for Central Europe and Southeastern Europe.

Unlike some of its Eastern European neighbors, the Czech Republic has shunned joining the eurozone and has surprised many with its stable and healthy levels of economic growth. However, progress is still needed on business transparency. 

The country’s dominant bank sees future growth coming from the small-business market and from regional customers.

Riding a wave of government spending, Kuwait’s financial institutions are thriving despite the drop in petroleum revenues—for now.

The prospect of the lifting of economic sanctions against Iran has investors excited about the return of this market to the global economic community. But the message is: Proceed with caution.

The axe fell on Brazil heading into 2016 as it suffered a downgrade to junk status by Fitch Ratings, heightening the air of crisis as the beleaguered nation grapples with political turmoil and recession.

In Myanmar, Asia’s odd man out and a global pariah for decades, small signs of progress mean a lot. So the early December launch of the Yangon Stock Exchange (YSX) was a big deal—even if no stocks trade there yet.

The International Monetary Fund decided last month to alter its long-standing policy of not lending to countries with arrears to official creditors—national governments or agencies they sponsor—thereby enabling it to continue lending to Ukraine should it fail to repay on time a $3 billion bond due to Russia.

The opposition party in Venezuela won the majority of seats in the National Assembly (Venezuela’s parliament) in national elections early in December.

Turkey
When the Justice and Development Party (AKP) swept elections in November, financial markets were focused neither on prime minister Ahmet Davutoğlu, nor on president Recep Tayyip Erdoğan. All eyes were on new deputy prime minister Mehmet Şimşek, the former Finance minister, who may be the only reformer within the largely statist AKP.

Burkina Faso
There’s been big change in the small country of Burkina Faso. On November 29, the West African nation of 17 million held its first free elections in almost three decades.

Argentina
The appointment of Alfonso Prat-Gay as Argentina’s new Finance minister was a clear sign to international investors that president Mauricio Macri, sworn in December 10, was serious about unraveling the populist policies of the previous government.

Corporate Governance | Management
Selling the assets could improve BTG’s net worth by 20 billion reais ($5 billion). 

Monetary Policy | Capital Markets
Casting aside concerns about the strong dollar and weakness in economies abroad, the Federal Reserve achieved an historic interest rate liftoff in mid-December.

Taxation | Capital Markets
In December 2015, 10 European Union members agreed on key aspects of a harmonized financial transaction tax (FTT).

FinTech | Trends
The launch of the blockchain-enabled asset trading platform Nasdaq Linq, Goldman Sachs’ filing of a patent for a securities settlement system based on a new virtual currency called SETLcoin, and the continued rise of blockchain banking consortium R3 all point to a race by financial institutions to harness the power of the blockchain.

Dealmaking | Capital Markets
Global merger and acquisition prospects for 2016 seem likely to exceed the pace of activity in 2015, although the reasons are likely to differ from region to region.

Foreign Exchange | Capital Markets
The renminbi’s entry into the International Monetary Fund’s basket of currencies, the Special Drawing Rights (SDR), will require China to have a more flexible exchange rate.

Security Risks | Management
Recent terrorist events around the world, from California to Paris, have forced multinational companies to think more seriously about security and nonmarket risks, and the impact of threats on their operations and business continuity.

Corporate Charity | Trends
Billionaire philanthropy may be growing, but it is also giving rise to a new trend that could change the face of charitable giving.