Participants in two economic symposiums were told that small and medium-sized commodities players globally would need to embark on sourcing for alternative sources of financing to bankroll their operations as major global banks exiting or sharply deleveraging their exposure to certain segments of the commodities' trade finance sector and have tended to refocus exclusively on the largest international trading houses. One of the speakers at both symposiums titled "Structured Commodities Trade Finance – An Emerging Asset Class" held in Jeddah and Riyadh and organized by Sidra Capital, pointed out that three of the major global banks had announced, either publicly or privately, of their plans to reduce/deleverage their exposures in trade finance in response the latest capital adequacy framework requirements which are likely to have significant impacts on the banks' capital adequacy ratios. According to some estimates, they collectively account for at least a third of global's trade finance. Other major European banks have also announced or put in place similar plans. The move has signaled potential liquidity constraints for the majority of the small medium size (SME) commodity players within the sector. Knowing the importance of SMEs growth in maintaining the global economic recovery, this inevitably requires imminent, albeit sustainable, solutions. Both symposiums confirmed that the crisis is not only European, but seems to be global as these banks did not just lend to European trade finance players but were also among the largest trade finance and commodities finance banks in Asia. It was believed though that major Asian and American banks have plans to move in the future to fill the vacuum. They further pointed out that other active global funds are already stepping in to benefit from this opportunity. Among the key note speakers at the symposiums were Nabil Abdul-Massih, CEO and MD of the Swiss-based company INOKS Capital, Nicolas Malky, COO of INOKS Capital, Samir Chehab, CEO of Comeco Saudi Arabia, and Siriki Sangare, CEO of Belco. Sidra Capital was founded in 2009 as Aayan Capital, but recently changed its name to Sidra Capital. Sidra Capital is licensed by Saudi Capital Market Authority to offer investment banking investment services and assets management.
