Leading members of the Malaysian and international business and banking communities convened at GTR’s 2nd Annual Malaysia Trade & Export Finance Conference in Kuala Lumpur on November 14, where discussion focused on the extensive opportunities offered by economic growth across the surrounding region and the healthy appetite of the regional finance sector for trade funding.

Euler Hermes’ Chief Economist Ludovic Subran set the tone for the day’s proceedings, pointing to the growing momentum of global economic recovery and the huge trade potential offered to Malaysian businesses by maturing Asian markets. With economic recovery still in its infancy however, Subran highlighted counterparty insolvency as a key risk to those conducting cross-border business in 2014, with the Euro zone and Latin America singled out as potential default hotspots.

A lively panel discussion outlining the key trends and opportunities being seen across increasingly significant intra-regional trade flows between Malaysia and key Asian markets such as China, Myanmar, Bangladesh and India followed, with a speaker line-up consisting of representatives from key domestic and international financial institutions and Recron Malaysia, a leading global plastics producer.

Positivity on the extensive opportunities for increased Malaysian exports, a financing market flush with liquidity, and a local banking sector aggressively expanding its trade finance capabilities across the region to satisfy the requirements of its clients’ business was exhibited by all contributors, though it was noted by Recron Malaysia’s Head of Treasury Functions, Sandipan Sengupta, that the domestic transport infrastructure needed to grow export volumes is in dyer need of development, with the cost of sea freight rising rapidly and damaging Malaysia’s global competitiveness. Recron are currently Malaysia’s largest user of sea-bound container freight, according to Sengupta.

The private insurance sector’s capability to both mitigate the risks being encountered by regional exporters and deepen the lending capacity being made available to them by the banking sector featured across the day’s discussions, reflecting the relatively low market penetration of trade credit and political risk insurance products in Malaysia and the Asean region and the heightened perception of global risks held by Malaysian businesses; a live audience poll using the conference’s mobile app demonstrated that, for a large majority of delegates political risk is a concern that continues to grow in significance.

The pricing of ECA backed finance was called into question by audience members during a panel session featuring representatives from the Malaysian state export credit agency, Exim Bank of Malaysia, EDC, Nippon Export & Investment Insurance (Nexi), BNP Paribas and BPL Global. Consensus was reached on the necessity of increased ECA activity since 2008’s global financial crisis in order to maintain volumes of crucial international trade, however there is no intention to compete with the private insurance and banking sectors, claimed the Exim Bank of Malaysia’s Chief Operating Officer, pointing out that undercutting the private insurance market would merely hurt their own bottom line.

“We’re experiencing tremendous interest in the Malaysian market across our Asia-focused events, in line with its position as a regional hub for trade” said Rupert Sayer, Co-founder and CEO of GTR. “With an economy focused on developing value-added exports, its strong trade connections with China and its capabilities as an alternative transhipment point for South-South trade routes between Asia and high growth markets such as those in Africa, it is no surprise that banks and businesses are keen to establish and expand their presence in this exciting market. The growth of GTR’s Malaysia Trade & Export Finance Conference very much reflects appetite for Malaysian business.”