Markit Group has launched a Trade Finance pricing and index service, broadening its coverage of the loan asset class as customer interest expands. The new service incorporates the pricing service recently acquired from LTP Trade.
Trade Finance assets are fixed income receivables that are generated in consideration of the cross border sales of goods or services. According to the World Trade Organisation, global import/exports totalled US$11 trillion in 2004, with an estimated US$4 trillion of this conducted on deferred payment terms. Trade Finance is a traditional business for banks, says Markit, and a fast developing area of interest among portfolio managers for investment and risk management purposes.
The Markit Trade Finance pricing service will initially consist of weekly composite spreads on emerging market countries sourced from leading market participants. In addition, Markit will act as calculation agent for the Markit Trade Finance Index, formerly the LTP Trade Finance Index. Bespoke valuations for specific trade finance assets are also being offered.
“We are delighted that Markit has acquired the data service from LTP,” says James Parsons, managing director of LTP. “As the Trade Finance area gains more appeal within the investment community, Markit will add more independence, quality and scale to this key asset class.”
Jonathan Martin, Principal at BlueCrest Capital Management Limited, says trade finance is “an area that is becoming increasingly attractive to fund managers such as BlueCrest as we gain confidence in the investment opportunities. We welcome the introduction of the Markit service which reinforces this view.”
Kevin Gould, Executive Vice President and Head of Data Products and Analytics at Markit, adds that trade finance fits well with the syndicated loan pricing and portfolio valuation services of the firm.