Corporate Trade Landscape

As Asian corporations continue to grow globally, they will have to deal with more trading partners, more complicated supply chains and higher volumes of cross-border activities. They will need to gain greater real time visibility into their trade transactions in order to better manage risk from conducting business in today’s volatile operating environment.

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Asian Currencies

Expect Asian currencies to be relatively more resilient than other emerging market currencies in view of their stronger external liquidity position with current account surpluses in most countries (notable exceptions are India and Indonesia); stronger fundamental growth drivers which can continue to support capital inflows; and ample FX reserve coverage of many central banks.

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Steps to Get China Bond Market Up and Running

The following are a number of steps to be taken before China can say its bond market is fully functioning and efficient.  This includes the development of benchmark sovereign rates to facilitate pricing, a classic bond repo market, high quality, efficient and cost effective electronic price discovery, market friendly regulations and taxes, clear guidance around disclosure and an active domestic and foreign investor base.

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The Collapse of Easter Island – Example of Bad Leadership in Society

Whether or not a civilization survives a crisis has to do more with whether its leaders make the correct decisions in time.  Leaders became so fixed in their traditional values that they were unwilling to alter them, even if it meant destruction.  One of the best-known examples of a collapsed society is Easter Island.  On Easter Island, the ruling class developed a tradition of building enormous statues as a way of proving their legitimacy.  The bigger the statue, the more status it gave the chief who had it erected.
Unfortunately, the process of erecting these statues required huge amounts of timber and rope (made from tree bark), not to mention human labor.  As a result, over a period of three hundred years, the Easter Islands cut down their forests until every last tree was gone.  This drastically reduced their food supply.  No more trees meant no more fruit, nuts or other wild foods.  It meant no more canoes with which to fish in deeper waters.  And it caused soil erosion, which lowered crop yields.

 

Looking at the Eater Island collapse today, we cannot help feeling dismayed by the sheer stupidity of it.  Did they not realize what they were doing?  Could they not have abandoned their statue building in time to save their food supply?  Even today’s Easter Islanders have had a hard time admitting their ancestors were so shortsighted.  Yet it seems the leaders of Easter were too entrenched in their ways to willingly change.

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Call Center Best Practice

Most call centers have scripts and force their reps to try to upsell customers to generate additional revenue.  The best practice is to not measure call times and don’t force a conversation into an upsell opportunity.  It should happen naturally.  Managers should just care about whether the rep goes above and beyond for every customer.  Don’t use scripts and trust your employees that they will use their best judgment when dealing with each and every customer.  Give the reps the ability to let their true personalities shine during each phone call so that they can develop a personal emotional connection with the customer. 

Use the telephone to do consultative sales.  Reps should be trained to know your products / services.  They should also be trained to research competitor’s websites.  If your company cannot provide what the customer is looking for, the reps should guide the customer over to the competitor.  In these situations, you will lose the sale.  However, what you will have gained is a relationship built on trust that can last a lifetime.  Relationships are built one phone call at a time. 

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Asian Hedge Funds Becoming More Sophisticated

Asia’s record level of bond issuance is luring the region’s start-up hedge funds into fixed income, altering a focus on equities and signaling that Asia’s hedge-fund industry is slowly maturing.  Hedge funds in the region have traditionally been largely what are known as equity long/short funds, which bets that some stocks will fall and the others will rise.  In Europe, and the US, where the industry is more mature, funds are a more-diverse mix of strategies.  So called macro funds, for example, bet on large economic events, and multi-strategy funds employ a combination of investment methods.

Historically Asia has certainly been a more equity-focused region, but the relative important of equities has diminished over time.  According to EurekaHedge, Asian fixed-income hedge funds have returned 7.8% year to date, compared with 3.4% for equity long/short funds.  The share of assets under management in Asian hedge funds in equity long/short funds has also fallen to 37% this year from 60% in 2006, and the share of money in fixed-income funds has grown from 3.2% to 6.6%.

Though the primary issuance of debt has been robust, the secondary market for bonds in Asia is still relatively illiquid.  One reason is that the range of investors is less diverse that in the West, where participants range from asset managers who buy hand hold debt securities, to hedge funds and other market makers who actively trade credit products.

Both in Asia and the West, banks, which act as dealers in the market, are less active than they used to be as they become more mindful of limits on their balance sheets and risk management.  Banks act as market makers to maintain liquidity for clients by buying and selling securities.  Dealers encourage people to make markets for clients, but they themselves are no great repositories of risk.

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ABC’s Unique Position and Strategy

Becoming a top-notch commercial bank has always been a solid aspiration at the heart of Agricultural Bank of China (ABC).  In order to achieve this goal, ABC’s strategy is to facilitate agricultural development, tap into urban and rural synergies, integrate into the international community and provide comprehensive and diversified service. 

Based on its traditional and unique competitive edge in serving rural areas, ABC takes a “two-pronged approach” with equal emphasis placed upon both urban and rural areas.  This “two-pronged approach” fits in well with ABC’s clientele and channel structure, and is completely aligned to the future trend of integrated urban-rural economic and social development in China.  This strategic move is helping ABC ride the tide of the strong development momentum in China.  At the same time, in accordance with China’s further openness to the outside world, ABC continues to engage in the overseas markets, following its own clients and reinforcing its global service capability.  It also strives to provide a package of comprehensive and diversified financial services to foster growth. 

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