AKA Investors' Meeting 2015

From Washington to Mao. The rise of the renminbi – outlook and consequences for the global economy

Business model, first-half figures and business outlook for AKA Ausfuhrkredit-Gesellschaft mbH

Exactly 111 guests accepted the invitation to AKA’s second Investors’ Meeting, experiencing an informative and entertaining afternoon on the bank’s rooftop terrace after a reception. First of all, Beate Bischoff, who had replaced Rüdiger Eggert in AKA’s management, and her colleague Marck Wengrzik, described the business model pursued by the bank, which specialised in trade finance. Together, they also presented the latest first-half figures, outlining AKA’s goals for the future. The immediate focus of the bank’s conservative and profitable business model was to remain on providing finance for trade in Europe and the emerging markets. The bank particularly wants to grow by widening its European footprint and establish its structured finance activities.

“AKA registered a historically high number of inquiries in July/August. Contracts worth EUR 900 million are waiting in the pipeline.”

AKA achieved record figures in 2014 despite the challenging underlying conditions. Thanks to strong growth in its core ECA-covered finance business and the dynamic market for structured finance, management is confident of being able to achieve its full-year targets for 2015 as well. According to the forecast, the return on equity as well as gross profit will remain stable at a high level. Throughout the coming year, AKA will devote more attention to the opportunities arising from the digital transformation. Activities with European export credit agencies are to be stepped up in an effort to widen AKA’s European footprint. A further aim is to widen the share of medium to long-term structured finance transactions in the portfolio.

You can download the presentation here.

Keynote “From Washington to Mao. The rise of the renminbi – outlook and consequences for the global economy.”

Urs Schoettli

Keynote speaker Urs Schoettli, a journalist for Neue Zürcher Zeitung and an independent consultant specialising in Asian affairs, outlined the underlying economic conditions in China in a very entertaining fashion. Based on the topic of the event “From Washington to Mao. The rise of the renminbi – outlook and consequences for the global economy”, he set out his appraisal of the future outlook for the renminbi.

“China has never had a better chance of establishing the renminbi as a global reserve currency. But first it must overcome a number of internal and external obstacles.”

In particular, Urs Schoettli cited the absence of the rule of law and transparency as barriers to the international recognition of the renminbi as a reserve currency. Moreover, it did not yet enjoy the full trust of investors. Generally speaking, the Chinese financial markets were not yet as mature.

Discussion on “From Washington to Mao. The rise of the renminbi – outlook and consequences for the global economy.”

Moderation: Andreas Scholz

The ensuing discussion was particularly illuminating due to the different stances taken by the panel participants who debated the matter in a heated, yet invariably objective manner. Moderator Andreas Scholz, a consultant to the Stuttgart stock exchange and the issuer of International Bankers Forum, proved adept at keeping the panel participants on the ball. The panel comprised Bernd Meist, managing director of the Frankfurt branch of the Bank of China and a member of the Frankfurt RMB Initiative, Michael Hannig, managing director of Voith Finance GmbH and Ulrich Leuchtmann, Head of FX+EM Research at Commerzbank AG.

"Once again, the second AKA Investors’ Meeting presented the right topic at the right time. On the day of the US Fed’s FOMC meeting, the focus was on the state of the Chinese economy, the consequences for the global financial markets and the role of RMB. This afternoon, the participants gained valuable insight into what is really going on in the markets." 
Andreas Scholz, moderator

“The inclusion of the renminbi in the basket of special drawing rights would only serve to increase its prestige.” 

The question as to how reliable macroeconomic data from China is together with diverging views on market intervention by the government and the opportunities for the renminbi to become a global reserve currency triggered a lively debate.

All the participants agreed that the current slump being experienced by China was presumably due to baseline effects, that it was only a temporary phenomenon and that the government would take corrective steps. Although the downside pressure on the renminbi would continue for the time being, the currency would grow in importance by virtue alone of China’s trading might. An inclusion in the basket of special drawing rights was a question of prestige more than anything else.

Conclusion over a Chinese buffet 

During the ensuing get-together held in a casual atmosphere over a Chinese buffet, all the guests had an opportunity of discussing these issues in smaller groups, of establishing contacts and of talking to AKA’s management. As a parting gift, all guests received a personally signed copy of Urs Schoettli’s latest book “The New Asians”.

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