JB's weekly round-up - 02 May 2014

 Download our free special report on commodities finance
Next week TXF will be delighted to host in excess of 150 delegates for our inaugural Natural Resources and Commodities Finance Conference in Amsterdam.
 
Alongside the conference we have also published our special report on commodity finance in 2014. The report will be available in print at the event, but you can also download it for free here.

 Happy, happy, happy…for now
The US Ex-Im Bank annual conference took place in Washington DC last week, bringing together well over a thousand attendees, and the usual mix of exporters, developers, sponsors, contractors, lawyers, underwriters, financiers, agencies, government officials, former ambassadors and general hangers on such as ourselves.
 
TXF hosted a training course and roundtable with CC Solutions, and exhibited at the conference for the first time.  We had our very own ‘Wall of Sound’ – a 6 foot wide graffiti wall for delegates to sketch on. The idea was simple: get anyone who visited our booth to suggest a song to include in our ‘2014 Ex-Im play list’. 
 
We were delighted to see so many folk get into the spirit of things and we had everything from jazz, opera and rock, through to the Wells Fargo wagon song and even some Mongolian pop.
 
Pharrell Williams’ ‘Happy’ was the most chosen song (at least on the first day) and there was also good representation on the board for the likes of Bob Marley, U2, David Bowie, ACDC and even the Worzels. 
 
You can view the entire list here, along with who selected what.
 
You can also listen to the playlist via Spotify
 
 Hochberg warns of a world without Ex-Im
If President Hochberg’s opening address at the 2013 Ex-Im conference was an opportunity to remind delegates of the significant achievements of the bank, the 2014 edition was more of a stark warning of the competitive challenges that face US exporters. 
 
US Ex-Im celebrates its 80th anniversary this year, but in the autumn President Obama will once again go to Congress to make the case for another five year reauthorisation of the bank, and a raising of the lending cap to $160 billion. 
 
With some of the figures Hochberg was able to quote during his speech, the fact that reauthorisation will once again be called into question is, from a non-American point of view, absolutely astounding. Remarks on the $1.57 billion surplus of the bank, the 0.25% default rate, and the creation of 1.2 million jobs through exports in the past five years; were lapped up by a supportive audience and demonstrated the critical role of Ex-Im to the US economy. 
 
But this speech was less about tub-thumping on the achievements of Ex-Im, and more about reminding delegates of the developments that have been made amongst America’s main exporting rivals. 
 
“Everyone is putting their foot on the gas”, warned Hochberg, citing the huge $100 billion export market of South Korea, which was winning large contracts at the cost of American companies as importers felt the political uncertainty meant they “could not rely on America”. 
 
Hochberg was keen to remind the audience that the playing field is far from level, and that some countries, “like China and Russia, are even throwing out the rulebook”. 
 
This was not the only time in the speech that tough rhetoric was directed towards old Cold War foes: “If we shut down, Russian and China would snap up the opportunity”.
 
It was clear that Hochberg was directing his remarks at those outside the auditorium, not the audience inside. But it was a stark warning to those looking to end government support for exports to be careful what they wished for. 
 
The speech ended with one short, simple statement: “supporting America in a global economy should not be controversial”. 
 
Watch the speech in full here.

 Ex-Im plenary highlights
The Ex-Im conference always attracts a strong line up of business leaders, economists and politicians as speakers. 2014 was no exception with insight from the likes of Secretary of State John Kerry, StanChart CEO Peter Sands, Aliko Dangote, Pemex CEO Emilio Lozoya Austin, former UBS CEO Robert Wolf, former Treasury Secretary Larry Summers, SpaceX CEO (and founder of PayPal) Elon Musk and the CNN presenter Fareed Zakaria.
 
Here are some of the most interesting bits:
 
Former Secretary to the Treasury Larry Summershypothesized that the US was showing some sign of fatigue as a world power, in particular in the reluctance to support certain international institutions, the difficulty in finding domestic political consensus to support international trade reforms, the failure to support US Ex-Im Bank and a reluctance to become involved in certain military incidents across the world.
 
US Secretary of State John Kerry cited economic development as the central tool to America’s foreign policy.
 
Pemex CEO Emilio Lozoya Austin cited the tremendous opportunities created for international and Mexican companies by the reform of Mexico’s energy sector. He also stated the potential opportunities for growth in trade with other Latin American counties such as Peru, Colombia and Ecuador, where high energy costs are a huge inhibitor to economic growth. The Pacifico Alliance trade agreement will aide this. 
 
He said Pemex might look to produce internationally at some point, but right now there were too many opportunities in Mexico to focus on anything else.
 
Africa’s richest businessman Aliko Dangote claimed his industrial conglomerate Dangote Group is expected to grow at 30% per annum (TXF heard it could be as much as double that).
 
Robert Wolf exclaimed that infrastructure investment is the fastest multiplier of GDP. Happy days then, as Fred Hochberg cited theMcKinsey report stating that $57 trillion in infrastructure investment is needed by 2030. 
 
You can view all videos from the event here
 
Have a great weekend.

Katy

Katy Rose
Head of Marketing & Communications