Page 18 - Bullion World Volume 02 Issue 02 June 2022_Neat

Bullion World | Volume 2 | Issue 02 | June 2022

and involves furnishing numerous expand into other regional markets products help mid-tier jewelers,
disclosure documents. Very often with the similar customer needs. The industrials and traders to access
it may also require revealing reticence stems from a lack of risk a new source of liquidity to reduce
proprietary business information. appetite and in-depth knowledge their funding costs and improve their
Players outside the major financial about other bullion markets in the bottom-line.
centers of Tokyo, Hong Kong and region. We are working with some
Singapore are particularly hard-hit of these banks to help them develop Lastly, one of the enduring themes
by these enhanced due diligence an understanding of these markets across the bullion markets in Asia
requirements. The consequent and extend their product footprint is the absence of regional leaders
reduced market access adversely especially as it relates to physical from the global stage. While
affects profit margins and increases metal trading and financing. reviewing the gamut of the bullion
market risk for these companies. market spectrum from producers
To address this issue, we are Metal inventory financing has to traders, industrials and final
introducing new trading platforms to emerged as one of the critical product consumers we can identify
the market and educating players on needs of market players in Asia. leading, strong players in local
how to use these new tools. These The demand for financing metal markets who have been unable or
Asian based platforms are more stocks is driven by an increase in unwilling to expand their activity
attuned to the market norms and are gold and silver prices in the last meaningfully globally, or in most
nimble enough to respond to specific two years and the growing gap cases even regionally. There are
customer needs in the region. between demand and supply surge several reasons behind this lack
Commercial banks in Asia tend cycles. In addition, COVID-19 driven of scale including strategic focus,
management depth, financing
ability and margin compression.
Our goal is to educate these local
leaders about opportunities in other
markets and assist them to utilize
their core competence to grow their
presence on the global stage. We
achieve this through education,
strategic tie-ups and completion of
opportunistic transactions. As the
level of confidence amongst these
Asian companies increase, we are
confident they will broaden their
customer base and rise up the global
rankings.
to cater specifically for their local logistical delays and lack of metal
bullion market needs and have fungibility have accentuated the In conclusion, as markets in the
not really expanded their services problem. The reduced risk appetite region open up after remaining
beyond their home country into of several international bullion banks constrained since 2020 due to
other countries in the region. The and changes in NSFR have further the impact of the pandemic, Asian
local banks in China (ICBC, BOC, reduced the availability of metal corporates and financial institutions
CCB), India (ICICI, HDFC), Hong funding. Against this background, have a major opportunity to break
Kong (BOCHK, OCBC Wing Hang), we have structured new financing away from the challenges of the
Taiwan (BOT), Singapore (OCBC, solutions that suit the credit policies past and expand their presence in
DBS) and UAE (Emirates NBD, NBF, of regional financial institutions the bullion markets to boost their
RAK) have developed considerable by using the existing market profitability and profile. We at FinMet
expertise in their physical trading, infrastructure to enhance fungibility offer our product expertise, market
hedging and metal financing in their and transparency of the underlying savvy and strategic network to
home markets, but have been shy to metal being financed. These new enable them achieve to this goal.

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