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Bankmed DIFC 2016 Conference Presentation by Bruno Gremez and Samir Kasmi of CT&F.

Joined presentation by Bruno Gremez of CT&F and Bankmed at DIFC about impacts of oil developments on the region and the opportunities it offers Dubai as a trading hub.

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Bankmed DIFC 2016 Conference Presentation by Bruno Gremez and Samir Kasmi of CT&F.

  1. 1. Global oil glut 86 88 90 92 94 96 98 1Q2013 2Q2013 3Q2013 4Q2013 1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 Global Oil Supply Global Oil Demand Source: International Energy Agency
  2. 2. Emerging market demand is still increasing
  3. 3. Saudi Arabia’s policy paying off?
  4. 4. Iraq oil production Iraq oil production has increased from 2,6 million b/d in 2011 to 4,1 million b/d in 2015 Source: US Energy International Administration
  5. 5. Iran oil production Iran oil production has already increased from 2,8 million b/d in 2015 to 3,6 million b/d in April 2016
  6. 6. Global oil trading The global oil trading industry has shown healthy profits driven by increased price volatility
  7. 7. Impact of low oil prices on the UAE Local banks show reduced appetite to finance oil trading, following defaults and / or restructuring as a result of a lack of discipline / un-hedged positions.
  8. 8. Main commodity trading hubs §  Switzerland and Singapore are the main commodity (oil) trading hubs in resp. Europe and Asia; §  Both have built up their centers of competence over several decades, and have reached some critical mass; §  Critical mass is the main driver to attract firms and professionals offering the ancillary services needed by the trading industry: finance, insurance, legal advise, operations, inspection, etc; §  There is a very large pool of experienced commodity trade (finance) professionals in both markets; §  Tax and legal frameworks are relatively attractive; §  Commodity trading is a leveraged industry that needs dedicated specialized financing; §  Local banks have developed a strong expertise: a significant number of Swiss and European banks are actively facilitating and financing trading out of Switzerland; the largest Asian and Singaporean banks are very active in commodity trade finance next to European banks present locally.
  9. 9. Dubai: the next trading hub? Strengths •  Ideal geographical loca2on between Europe and Asia •  Great infrastructure (airport, office space, residen2al space, ports, etc) and exis2ng regulatory framework (DIFC, DMCC) Weaknesses •  No local bank dedicated to commodity trade finance; few interna2onal banks present •  Developing, but s2ll limited, pool of professionals with exper2se in the industry Opportuni>es •  Growing trading flows around the MENA region (to/from Africa, Indian sub- con>nent, etc) •  Developing a commodity trade center of competence aQracts highly qualified professionals Threats •  Poli>cal instability of the region •  Dubai must remain cost-compe>>ve between Switzerland and Singapore

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Joined presentation by Bruno Gremez of CT&F and Bankmed at DIFC about impacts of oil developments on the region and the opportunities it offers Dubai as a trading hub.

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