Jacques-Olivier Thomann Honorary President Geneva Trading and Shipping Association (GTSA)
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Transcript of Jacques-Olivier Thomann Honorary President Geneva Trading and Shipping Association (GTSA)
Jacques-Olivier ThomannHonorary President
Geneva Trading and Shipping Association (GTSA)
Role of Switzerland as a hub for commodity trading and finance What Switzerland can bring to Arab financial institutions and commodity houses ?
Trends and Developments
Jacques-Olivier ThomannBoard member Geneva Financial Center
Honorary President GTSA Geneva April, 3rd 2014
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A unique positioning with a true cluster effect
No other international centre can match Switzerland for the strong positions it holds across all key areas of the commodities sector
Commodity trading companies Trade finance Banks Ship chartering Legal Inspection and certification Commodity sectorial Associations
10,000 jobs relating to the sector Over 400 companies 3,5% + of GDP
Role of Switzerland as a hub for commodity trading and finance
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Geneva Trading and Shipping AssociationFounded in 2006, GTSA regroup the commodity sector players: Trade Finance Banks, commodity traders, shipping companies, brokers, security and inspection companies
Zug Commodity Association
Lugano Commodity Trading Association
and soon a SWISS COMMODITY TRADING FEDERATION
The Lake Geneva Region, the centre for commodity trading
Key dates
Players in the sectorTrading companies
• Several hundred billion in combined revenue• Approx. 400 companies including Cargill, Mercuria, Vitol, Trafigura,
Louis Dreyfus, Totsa,Bunge, Addax, Gunvor, Metinvest, Sucafina …Banks
• Aprox. 15 including BNPP, Crédit Agricole, ING, Société Générale, Credit Suisse, UBS, the cantonal banks, Arab Bank, National Bank of Abu Dhabi,BCP…
Shipping companies • Over 1,200 million tonnes of commodities shipped• MSC, Geogas, Promar, Riverlake...
Certification and inspection companies SGS, Cotecna…. Service companies
• Lawyers, insurance brokers, auditors... Association : Geneva Trading and Shipping Association, GTSAUniversity : Master, Diploma, ++
First World War
Second World War First oil
crisis
International organisations
Egyptian cotton
producers
CIS tradingcompanies
Collapse of Soviet Union
International traders
1950 1973 1990
End of the oil majors’ monopoly
2000 2010
Positioning Oil:
• Number 1 : 35% of world oil traded• 75% of ex-USSR exports
Steel• Traders: 10% of global exports• Banks: 60% of exports
Soft commodities• Number 1: cereals and vegetable oils 35%, coffee 50%, sugar
50%, cotton, cocoa• 60% of Russian and Ukrainian exports
Positive momentumFollowing the financial crisis
• Very pragmatic financings• Secured financing of real and physical goods
The commodities sector is part of the real economy• Ensures logistics for and movements of commodities• Ensures that markets are well supplied with strategic products• Contributes to the development of the emerging markets
6Inspection and Certification : Worldwide leader
What Switzerland can bring to Arab financial institutions and commodity houses ? Trends and Developments
With an extremely restrictive regulatory framework : Basel III…….. Liquidity ratio: liquidity coverage ratio (LCR) Funding ratio: net stable funding ratio (NSFR) Capital ratio: leverage ratio (LR) from 4% to 7%, 9% and above
…..and political uncertainties in a debt crisis environment Fall in USD money market funds cheap liquidity "Nationalist" pressures
European banks must take exceptional measures Deleveraging their balance sheets and improve their ratios Downsizing their USD funding requirement Looking for alternative sources of funding
This situation creates a particularly favourable environment for investors, innovative banks and trading companies, indeed
Commodity Trade financing structures will be moving to non-banking type of facilities such as
• Trade finance funds• CLO’s• Securitisations
These investment models are uncorrelated to traditional asset classes, generating good return to investors with a wide range of risk profile
Thank you for your attention
Jacques-Olivier Thomann