Ilias KACHMARIlias KACHMARJuly 12, 2019


Energy demand growth and new investment opportunities, global LNG trade future looks bright in 2019. LNG (Liquefied Natural Gas) refers to natural gas processed in its liquid form. After treatment, liquefaction allows to condense natural gas into LNG by reducing its volume by a factor of nearly 600 for the same calorific value, which facilitates its transport by sea. It is essentially composed of 90% methane and is odorless, colorless, non-corrosive and non-toxic liquid.

An “LNG chain” is set up when the construction of a gas pipeline is not practical, in most cases because of excessive construction costs, transport distance, an imposed maritime stage or geopolitical constraints. Several major stages constitute this LNG chain, from liquefaction of natural gas to regasification, in order to supply gas to end-users. LNG growth in new markets has been facilitated by the rise of enabling technologies such as FSRUs and FLNGs. These have reduced LNG import risks, in particular by reducing costs, which facilitates financing and speeds up implementation times.


What are FLNGs and FSRUs?

Most of the future growth in gas demand will be in areas where pipeline gas supply is neither economic nor practical. These sites, mainly in Asia and Europe, will generate growing needs for natural gas in liquefied form which will generate demand for additional LNG production capacity.

An FLNG, or Floating Liquefied Natural Gas, is a floating plant that transforms offshore gas into liquefied natural gas. Both an extraction platform and a natural gas liquefaction plant, it is not a ship and doesn’t have its own propulsion system; it can be reused after the depletion of a gas field.

It is usually designed to withstand cyclones of high categories. Floating above an offshore natural gas field, the FLNG facility produces, liquefies, stores and transfers LNG (potentially LPG and condensate) at sea before carriers ship it directly to markets. Thanks to this technology, there is no need to build an onshore liquefaction plant or expensive gas pipelines to bring gas ashore.


International Gas Union, Natural Gas Facts & Figures

FSRUs, or Floating Storage & Regasification Units, are floating LNG import terminal. In addition to transporting LNG, FSRUs have the onboard capability to vaporize LNG and deliver natural gas through specially designed offshore and near-shore receiving facilities, and deliver regasified LNG at pipeline pressure at different flow rates.

FSRUs are mobile installations capable of providing a market in which gas is the main source of energy in areas where it is not possible to install regasification terminals on land. They allow gas importing countries to diversify their sources of supply, which are essential for maintaining a certain level of independence in the field of energy. The main goal of the FSRU solution is to continue to attract gas importers anxious to fast-track new supplies on the international market.

They have 3 advantages:

  • Cost Effective:This solution is more cost effective per MMbtu than a traditional land-based solution
  • Time Efficient: It can be implemented in 1 to 3 years versus a land-based terminal which typically takes 4 to 6 years to develop
  • Minimal Footprint:It requires less land use than a land-based terminal, thus minimizing environmental impacts to the surrounding environment


Factors influencing the growth in energy

Several factors influencing the growth of energy demand have been identified. Long-term trends could create investment opportunities in energy over the next two decades.


Demographic growth

According to the International Energy Agency (IEA), primary energy demand by 2040 will be a quarter more that of today, while the population will grow by 1.7 billion and will strive to improve their quality of life. Currently, the Earth’s population is growing by 60,000 every 8 hours, or 2 children born every second somewhere in the world. Experts believe that if we continue to grow at this rate, we will need 50% more energy to support humanity by 2050.

Thus, in 2040, the world population should clearly exceed 9 billion. Not only that; more people mean we will need more food, water and shelter, which will also put our renewable resources under severe strain. Nevertheless, considering the areas where population growth has been the fastest, those are not the same countries that consume the most energy. For example, the United States has a population of just over 300 million, about 5% of the world’s population, however they consume 20% of the world’s energy and generate 19% of greenhouse gas emissions on the planet. China, which owns 20% of the world’s population, is responsible for 33% of its greenhouse gas emissions.

Developing countries such as India and certain African countries consume much less energy but contribute to the demographic crisis. India is almost the opposite of the United States in terms of energy consumption, using only 5% of the world’s energy, but with nearly 1.2 billion people, and has nearly 17% of the world’s population. Demographers predict that three quarters of the world’s population will reside in Asia or Africa despite this unjust and unbalanced breakdown around the world.

The growing world population will create new competition for energy resources. This will likely also encourage new energy innovations as fast-growing countries struggle to cope with growing demand and limited energy resources. China and India, in particular, will face the biggest challenges in managing population growth. As people in these countries continue migrating from rural areas to cities, demand for energy will certainly increase and it could have a huge impact on energy prices.

Population and energy consumption can only be linked, and as each human born, commodities become more precious. If we assume that the United States currently consumes 20% of the world’s energy, how much energy will the country consume in 2050 if it reaches a population of 450 million as estimated by the United Nations?


The share of global electricity

Nearly 1.3 billion people in the world do not have access to electricity. The World Bank reported that the least electrified region in the world is sub-Saharan Africa with 62.5% of its population having no access to electricity, followed by India with 20.8% of the population, South Asia 19.9%, and the rest of the world 3%.

Over the next two decades, India and other emerging countries will invest in grid infrastructure as their economies grow. These new generators of electricity will require crude oil, natural gas, coal, nuclear energy or renewable energies, to function. As access to electricity reaches more and more economies around the world, energy needs will inevitably increase.


Industrialization in developing economies

Industrial energy demand could exceed 70% by 2040. However, most of this demand will be generated by developing economies. According to ExxonMobil, industrial energy demand in India is expected to triple by 2040. India and other developing countries in Asia, the Middle East and Africa will need factories for the supply of metals, machinery and manufactured products. This new source of industrial energy demand could offset the slowdown in industrial demand in developed countries. It also helps countries lift many people out of poverty because it forces people to work in factories and allows them to escape poverty, thereby promoting economic growth in the country.


The revolution in energy efficiency

The expected growth of energy in developed countries is not due to bad economic conditions. On the contrary, developed economies in North America and Europe will benefit from increased energy efficiency in the coming decades. More efficient natural gas-fired power plants, smart grid technology and fuel-efficient cars are some of the developments that can lead to a new energy efficiency revolution. It will be interesting to see the measure to which these technologies can evolve and how they could change the shares of renewable energy consumption versus non-renewable energy.


Growth in emerging countries

One of the most important trends in energy markets is the disparity in energy demand between developed and developing countries. World energy consumption is expected to increase by almost 30% over the next two decades. However, growth in developed countries is expected to remain stable. In other words, the emerging countries will represent the entire increase. This forecast could have a significant impact on commodity markets. Traders need to pay close attention to the economic growth of emerging markets, as well as new sources of energy supply in these emerging countries.


The future of global LNG trade looks bright

 Despite the widespread promotion of energy efficiency policies, global energy demand is expected to continue to grow over the next few decades. LNG is expected to grow at a much faster rate than natural gas as a whole, due to the large distances between many supply centers and demand centers.

FSRUs and FLNGs have changed positively the LNG market. They have enabled many more countries to enter the market much faster, become LNG importers, and at a much lower cost than building a land-based receiving terminal. They are a key driver behind the significant and rapid growth of emerging market LNG imports and encourage many new liquefaction projects.

Most recent import projects are promoted by joint ventures between local companies and international LNG suppliers (Qatar Petroleum, etc.), midstream solution providers (Excelerate Energy, Golar LNG, Höegh LNG, OLT, MOL, etc.) and power plant suppliers (Siemens, General Electric, etc.).

In a context of excess LNG supply, aggregators and traders support the creation of these new markets and provide them financial strength and project management skills that are lacking in many countries aspiring to import LNG. Examples include Bahrain LNG, Sergipe and Açu 1 in Brazil, and Ivory Coast LNG in Côte d’Ivoire. Trading companies such as Trafigura and Gunvor are also investing in FSRUs in Pakistan and Bangladesh to diversify their activities.

In 2018, nominal liquefaction capacity increased by 7% at the end of the year, reaching a total capacity of 382.9 MTPA (Million Tonnes Per Annum). This increase is due to new projects rather than expansions of existing liquefaction plants. As of February 2019, commercial starts have brought total capacity to 392.9 MTPA.

Yamal LNG in the Russian Arctic (11 MTPA total); Ichthys LNG Train 1 & 2 (8.9 MTPA) and Wheatstone LNG Train 2 (4.45 MTPA) in Australia; Cove Point (5.25 MTPA), Corpus Christi LNG Train 1 (4.5 MTPA) and Sabine Pass Train 5 (4.5 MTPA) in the US; Kribi FLNG in Cameroon (2.4 MTPA), contributed to this growth. 


Existing Capacity




IHS Market, IGU; Nominal Liquefaction Capacity and Utilisation by Market 2018

As of January 2019, there are 20 markets with existing liquefaction capacity (figure above). In September 2018, Qatar has a total liquefaction capacity of 77 MTPA and remains in first place. Qatar Petroleum plans to add a 4th new liquefaction train to increase its total liquefaction capacity target after expansion to 110 MTPA.

The start-up of Ichthys LNG T1 in the New Year, and thanks to the output of 10 liquefaction projects distributed between Western Australia, Northern Territory and Queensland, pushed total Australian liquefaction to 75.4 MTPA, 79.9 MTPA by January 2019, and remains in second place. At the same time, 3 of the country’s southern states – New South Wales (NSW), Victoria and South Australia – are pushing ahead with plans to commence LNG imports based on the use of FSRUs. At the end of 2018, Qatar, Australia, United States, Indonesia, Malaysia, Algeria, and Nigeria all together comprised over 71% of nominal liquefaction capacity.


Under Construction


IHS Market, IGU; Nominal Liquefaction Capacity by Country in 2018 and 2024

As of January 2019, 101.3 MTPA of liquefaction capacity was under construction or sanctioned for development. In Australia, the Prelude FLNG which recently began commercial operations this year and Ichthys LNG T2 which started exporting in October 2018 are leading contributors in the ongoing wave of capacity additions. More than 75% of global capacity under construction (77.4 MTPA) is located in North America, with LNG Canada as the only non-US project in that category.

Further capacity is under construction in Indonesia (4.3 MTPA) partly thanks to a FSRU having a production capacity of 2.4 MTPA that will be built by 2021 for the JAVA-1 project, the largest project of its kind in South East Asia. Malaysia (1.5 MTPA), as pipeline infrastructures are lacking, the country would like to be able to transport natural gas in the best way. Russia (3.6 MTPA).

Mozambique (3.4 MTPA), as in September 2018, the Italian ENI announced the start of construction of its Coral South FLNG facility for a production of around 3.4 MTPA of LNG that will start in 2022. Argentina (0.5 MTPA), through the deployment of Tango FLNG at the port of Bahía Blanca in the second quarter of 2019, Argentina will join the ranks of LNG exporters with an initial export project of 0.5 MTPA to overseas markets.

Thailand has become a promising market and started importing LNG in 2011. PTT is also developing the Nong Fab LNG Receiving Terminal in Rayong scheduled to commence operations by the second quarter of 2021 with a regasification capacity of 7.5 MTPA and a peak output capacity of 9 MTPA.

Pakistan, suffered from severe energy shortages for many years. The country is taking action and starting to import LNG in 2015. Thus, it hopes to increase its imports to about 30 MTPA by 2020.

Bangladesh has seen its gas reserves dwindling, hydroelectric and wind resources are limited, lands for large-scale solar deployment are scarce and dependence on imported liquid fuels became too expensive. Thus, the country urgently needs more gas. In August 2018, Bangladesh became the world’s 42nd LNG import country thanks to the vessel that Summit chartered from Excelerate Energy on a 15-year deal and has now brought 130,000 cubic meters of LNG from Qatar.

Panama is the second country with Bangladesh to join the group of LNG importing countries, altogether 42 countries now. Indeed, many utilities in Central America and the Caribbean still depend on oil combustion to produce electricity, but LNG offers a cleaner, cheaper and more efficient alternative. In 2017, Engie and AES – Applied Energy Services, a major player in power generation and distribution in Latin America, the United States and Europe – established a joint venture to market and sell LNG to third parties in Central America, using the Panama terminal as a distribution center, with a capacity of 1.5 MTPA.

Poland and Lithuania would like to diversify gas supply sources as they are dependent on Russia’s Gazprom.

Egypt, who decided to raise its domestic production, was an exporter short of gas and has regained its self-sufficiency thanks to major discoveries. The country will nearly double its LNG export capacity to 2 billion cubic feet/day by the end of 2019, and plans to collaborate with Saudi Arabia in exploring hydrocarbon reserves in the Red Sea.

Kuwait and UAE want to switch electricity generation away from costly and polluting liquid fuels. Kuwait has set up a project for an LNG import terminal at Al-Zour that will be operational by 2022 with a regasification capacity of 23 MTPA and 8 storage tanks with a capacity of 225,000 m3 each.


Sub–Saharan Africa’s LNG

Sub-Saharan Africa is a significant exporter of LNG from projects in Nigeria, Equatorial Guinea, Angola and Cameroon.

Nigeria LNG project currently has six trains in operation, with a combined production capacity of 22 MTPA. The company has scaled back its expansion plan to a single 8 MTPA train and hopes to reach FID (Final Investment Decision) by the end of 2019.

In 2018, Cameroon became the newest LNG exporter when Kribi FLNG (2.4 MPTA) loaded its first cargo in May 2018. Prior to this, Papua New Guinea in 2014 was the most recent nation to add liquefaction capacity.

Senegal and Mauritania will become exporters of LNG from 2022. Partners in the Greater Tortue FLNG project to be based offshore Mauritania and Senegal announced FID in December 2018 for the 2.5 MTPA first phases, but have yet to award construction contracts.


China’s LNG Import Growth

China, Japan and South Korea imported 55% of the 391 billion m3 of LNG sold last year and will buy 48% of the 505 billion m3 of LNG sold in 2023. LNG sales of all Asia alone will account this year for 75% of all LNG sales in the world, compared to 72% last year. (Sources: global LNG report 2019, DLA Piper)

In Japan, the Fukushima nuclear disaster has accelerated demand following the decommissioning of nuclear power plants. Japan remains for the moment the world’s largest importer of LNG. Then we have China with more than 54 million tons in 2018, then South Korea. It should be noted that 2017 was the year in which China overtook South Korea to become the second largest LNG importer in the world.

The country received nearly 10 million tons of LNG more than South Korea, which imported a record 44 million last year. China will therefore become the world’s leading importer of LNG. It also has good relations with Russia, whose Russian LNG exports to the Asian market reached 12.86 million tonnes in 2018. At the same time, China is investing in LNG projects in Australia, East Africa and elsewhere, and most of the investment will come from own funds.

LNG imports growth since 2015 has been spectacular for China. In 2017, a quarter of all LNG imported by China, about 10 million tonnes, was delivered to customers by truck, due to pipeline constraints. The country imported 54 million tonnes of LNG in 2018; an increase of almost 38% compared to 2017, and only 19.7 million tonnes in 2015.

During December 2018, Chinese LNG imports rose by 6.29 million tonnes representing an increase of 25.9%, setting a record for monthly LNG imports. The Chinese government is seeking to improve its environment by abandoning coal to tackle air pollution, but also to meet its commitments to tackle climate change under the Paris Agreement. China will need to increase its gas storage capacity to meet growing seasonal needs. At present, it has about 10 billion cubic meters of storage space, or about 4% of its annual demand.


Global key information
  • Nominal liquefaction capacity increased by 7% at the end of 2018, reaching a total capacity of 9 MTPA
  • As of February 2019, commercial starts have brought total capacity to 9 MTPA
  • Natural gas meets almost 25% of the global energy demand, with 7% of that supplied as LNG
  • US and Australia both ramped up supply of LNG, with China, South Korea and other Asian nations leading demand growth
  • Bangladesh and Panama joined the importers’ ranks last year, bringing the total number of importing countries to 42
  • One new country, Cameroon, started exporting LNG in 2018; bringing the total number of exporting countries to 20



Antoine NODETAntoine NODETJuly 12, 2019


Air quality is a matter of public concern and an increasingly important public health issue. This is part of a broader context against global warming and pollution. The whole question is how to deal with the proliferation of ideas and initiatives when the stakes are global. More prosaically, which investment vehicle is most relevant and at what price? TERA goes public to find investors interested in its approach. The stakes are high for the Paris financial centre, as this is the second introduction of the year.

Created in 2001 and still owned by its four founders, TERA is active in the field of air quality analysis.  To develop, the company uses the market under the new simplified procedure framework for bids open to the public for an amount of less than €8 million.

Most of the turnover, 96%, is currently generated by air analysis carried out in laboratories for design offices (CEBTP, Ginger…) and electronic component manufacturers (SOITEC, STMicroelectronics…). This activity represents recurring revenues. This subject is growing in importance with 30,000 analyses carried out in 2018 compared to 23,000 in 2017 and 20,000 in 2016, figures that reflect not only significant but also erratic growth.

Based on its experience, the company has developed connected measuring stations. These stations are available for rent. EBITDA would be 20%, higher than the current average EBITDA of 6.4%. However, in the absence of financial analysis and consistent forecasts, it is difficult to know whether this level of EBITDA margin is sufficient in relation to the risk inherent in this type of activity and the capital intensity. It should also be noted that, while EBITDA currently stands at €282k for 2018, REX is negative by €340k due to provisions and depreciation, while the company does not capitalise its R&D (17.5% of turnover).

The company has developed a latest-generation sensor whose essential merit is that it does not experience signal drift over time, unlike existing systems, and is able to operate in a humid environment with a level of analysis of the most harmful fine particles below one microgram per cubic meter. Tera has just signed an agreement with an automotive equipment manufacturer whose name remains confidential to adapt to the cabin filtering system. Beyond this first agreement, the company’s sensors are being tested by several manufacturers, which should allow orders to accelerate.

Finally, the company is developing digital solutions for monitoring air quality on a cloud that includes all the data collected by a network of sensors and community measurement stations. A first partnership with the city of Marseille has been concluded.

No financial analysis has been provided and it is therefore difficult to comment. Nevertheless, operating profitability is expected to deteriorate under the dual impact of R&D expenditure and the development of new activities and internationalisation. Management nevertheless believes that the operational balance will be maintained. The turnover, which today is 4.2M, should reach 7M in 2020. And the net result should be positive in 2021.

The company is seeking to raise between 6M and 6.9M with the extension clause. It should be noted that at the present time equity is negative by 1.2M, partly due to the outflow of investment funds. The net financial debt is 1.5M, the other debts being 3.9M compared to a current asset of 2.4M excluding cash.

In addition to restructuring liabilities, the company announces that it intends to devote the funds to the development of new analytical methods and digital applications, the development of the network of measuring stations, international expansion, particularly in China and the United States, and finally external growth.

If the theme of air quality is a promising one and no one can deny the importance of health, the fact remains that everything has a price. The company is valued pre-currency between 8.4 and 9.76M euros. If we retain the upper end of the range and a maximum amount of 6.9M, we arrive at an equity value of 16.66M euros. At the lower end of the range, the valuation would still be 14.4 million euros.

Based on a turnover of 4.2M, the range is 3.4 to 3.9 times. On the basis of the 7M announced as the target for 2020, between 2 and 2.65. As for the result multiple….

As well as for the size and liquidity discount, even with a free float of 35 to 40%.

Post tenebras lux. It is better to wait for the listing and publication of financial analyses to position yourself, especially since, although the theme is promising, there are a large number of stocks on the French and international markets to invest in this issue. And if speculative interest cannot be denied, at this level the premium can only be low. Unless the growth in results justifies the multiples. To be seen when the financial analyses will be available. In the immediate future, we might as well go behind the scenes with wet feet and asymmetric information.

Moufid ABAYOMIMoufid ABAYOMIFebruary 14, 2019


The first reflections and works on artificial intelligence date back to the 1950s. Today, this discipline, at the heart of all debates, is beginning to shake up several sectors of activity. With the emergence of big data, research in this field is accelerating. Let us look in this article at its impacts on the banking and finance sector.

Artificial Intelligence (AI) is a set of theories and techniques that develop complex computer programs to allow machines to simulate certain features of real intelligence (reasoning, learning….).

artificial intelligence

It becomes a software that reflects the place of the human being and is implemented in several fields such as: trade, transport, health, personal assistant, industry, environment, defence, finance, etc….

Today, artificial intelligence makes it possible to achieve artificial vision, speech recognition, medical diagnosis and treatment of certain pathologies, image and video processing, predictive analyses, automation in a more intelligent way, the creation of humanoid robots, the simulation of complex systems, the creation of works of art etc….

With the advent of Big Data, the AI began to change certain habits in the banking and financial sector. Indeed, companies in these sectors have a large amount of untapped data at their disposal. Big Data has created an appropriate framework for the exploitation of its data.

This allows, among other things, the development of new algorithms, the processing of this mass of data with very powerful algorithms. This promotes, among other things, the digitalization of the financial sector, the transformation of trading activities, risk assessment, portfolio management, financial analysis, bank loans, etc…. Hence the success of fintech.
In terms of impacts in the banking and financial sector, we can mention:

– Business transformation
The AI will automate several tasks in the banking and financial sector. But it will not replace the human. The AI will help to develop trades and skills.
– In trading
The use of AI and machine learning in trading rooms has become a reality. Algo-trading takes into account market trends and AI gives a probability of occurrence of a transaction. Today, it is the automatons that execute stock market orders. Only the parameters are defined by humans. Automated writing of trading algorithms is trying to become a reality. This is starting to force traders to get into the code.
– Corporate Finance
The digital revolution is particularly affecting the purchasing and accounting functions. At this level, it is software that performs some daily tasks. This makes life easier for employees. It should be noted that the finance, purchasing and HR functions have a strong potential for digitisation.

– In asset or wealth management
The development of Advisor Robots by FinTech allows online portfolio management with a minimum of human intervention. In this context, two types of services can be distinguished:
– Advisory management: the investor manages his portfolio. He can choose whether or not to follow the advice given to him;
– delegated management: the structure manages the portfolio on behalf of its client. This is a management mandate.
The advantages resulting from these services are: price advantage, advice and ease of use. As a result, insurers, bankers and asset managers have started to sign partnerships with Robo-Advisors

– Business process automation
Thanks to artificial intelligence and automation, banks have considerably reduced the processing time of claims such as loss/stolen bank cards, claims reporting.

To do this, the AI makes it possible to extract in a claim declaration file, the most relevant elements to know the type of claim, to analyse the type of insurance coverage. This allows agents to quickly begin the compensation process.
This discipline also makes it possible to develop new recruitment procedures.

Improving the customer experience
AI can enable banks and financial structures to achieve a 360° view of their customers. Indeed, the AI can monitor social networks and evaluate the e-reputation of its customers. Thanks to the information collected in real time, it is possible to draw quick conclusions that can be made available to advisors.

This allows you to customize service offerings. Chatbots also save time for advisors. The latter can focus on higher value-added requests. All this improves customer relations, reduces costs and increases the efficiency of sales departments.

– Cyber security
One of the biggest concerns in the banking and financial sector is security against cyber attacks. Indeed, today we can witness the infiltration of institutions’ computer systems by more sophisticated malware. There are also the appearance of false transactions from a dubious destination or massive thefts.

To remedy this, banks and financial institutions use AI and machine learning to build a good defence. Indeed, the AI analyzes the client’s financial habits, detects unusual behaviours. It can then automatically alert the system to ensure the security of clients’ funds.

It should be noted that the development of the cloud and the use of blockChain technology combined with artificial intelligence will make it possible to create customized offers and design smarts contracts. We can also see the creation of an ecosystem in which banking services will be integrated with functionalities such as e-commerce, uberisation etc….


Les applications et usages de l’ia

Jerome BLANCHETJerome BLANCHETNovember 2, 2018


Leaving the United Kingdom from the EU will no longer allow the use of the European passport to provide the various banking and financial services (lending, financing, trading, asset and investment management and forward financial instrument contracts) from the United Kingdom to EU Member States and vice versa.


The issue is particularly problematic for market contracts using master agreements, which constitute the contractual framework for several underlying relationships that can amount to several billion outstanding amounts depending on the counterparties. We will focus here on the fate of derivative contracts that represent the name

What future for derivatives master agreements?

Derivative transactions are entered into through contracts (called confirmations). These contracts may either be concluded separately, each with its own specific features, or as part of a more global contract called the Framework Agreement (the notion of “framework contract” is provided for in article 1111 of the Civil Code). The most commonly used framework agreements in international relations are the ISDA framework agreements under English law.

However, particularly in EU-UK post-Brexit relations, these operations will be affected. Indeed, if the transactions could have been validly concluded on the date of their conclusion, certain events inherent in the life of the said underlying contracts will raise questions as to the need to have an authorisation in order to carry out the latter and potentially, therefore, an impossibility to carry out these services in the absence of such authorisation.

In practice, there has been a migration of activities from the United Kingdom to France, reflected in the contractual form of transfers of Framework Conventions outside the United Kingdom through “novation” agreements.

These Novations Agreements under English law make it possible to transfer operations from one entity (London) to another (EU) entity in order to obtain its approval. Under French law, it is also possible to transfer contracts from one party to another by several contractual procedures similar, but not in every respect, to English law.

Several mechanisms therefore exist in French law, only here novation and assignment, the most commonly used, are discussed:

the novation that can be assimilated to a substitution mechanism takes three forms: novation by change of creditor, novation by change of debtor and novation by change of obligation. In all cases, novation extinguishes existing obligations between the parties to the original contract and creates new ones. As the obligations are distinct, it leads to the discontinuity of the contracts and potentially to the impossibility of continuing them under previous conditions.
the assignment that can be assimilated to a transfer also exists in three forms: the assignment of receivables, the assignment of liabilities and the assignment of contracts on forward financial instruments. Unlike novation, assignment does not create any discontinuity and obligations therefore continue to exist but between different parties.
In any event, the continuity or discontinuity of contracts will have fundamentally different consequences, in particular:

legal, and
In addition to the possibilities offered by French law, some authorities have, within the framework of Brexit, proposed an innovative solution, one providing for a so-called “replication” contract, i.e. a contract replicating in the same way the transactions concluded between an entity in the United Kingdom and a counterparty in the EU between two other entities.

While this mechanism seems, in theory, very profitable, the technical nature of the process makes drafting and negotiation as delicate as renegotiating a model that is already known to all market participants.

It is therefore necessary to take the measure of each of the solutions offered in the market and to study them on a case-by-case basis. It is therefore not possible at present under positive law without intervention (provided for in particular in France) by the legislator to state that derivatives contracts will continue to exist and will be executed smoothly after Brexit.

Is Brexit a pretext for contract renegotiation?

The transfer of operations will obviously create in view of the levers that European entities now have to renegotiate contracts on financial futures instruments. In particular, the law and jurisdiction applicable to the Framework Convention must be chosen. To this end, ISDA published in 2018 two new ISDA Framework Conventions, one governed by Irish law and the other by French law, allowing future international relations between the EU and the United Kingdom to be tailor-made.


But the renegotiation will not stop with these clauses alone, it will be necessary to consider the relevance of a “simple” transfer or the necessity when transferring operations:

to audit the portfolios of current and future operations,
to establish the typology of the contractual documentation used,
to analyse the regulatory, accounting and tax impacts[1] related to the choice of transfer method,
to analyse the conditions for recognition (recognition of netting agreements and collateral agreements) and enforcement of contracts abroad, and
to allocate the material and human resources necessary for the renegotiation of these contracts on forward financial instruments and their management following the transfer.
In addition to negotiating the applicable law and/or jurisdiction, the transfer of transactions may also provide an opportunity to renegotiate certain other legal or financial parameters such as:

the eligible and calculation currencies,
eligible collateral,
the benchmark indices,

The special case of derivatives cleared in a clearing house “CCP”?

Clearing in a clearing house involves the use of a mechanism under continental civil law that allows the extinction of reciprocal obligations between two parties. It is the clearing house that calculates derivative exposures and is responsible for clearing transactions. CCPs are governed by internal rulebook regulations validated/registered by market authorities.

Under the terms of the CCP regulation to which counterparties adhere, the provision of financial collateral between the parties (initial and/or variation margins) to secure exposures incurred under derivatives contracts is sometimes provided for in clearing contracts, in particular for OTC derivatives cleared in chambers.

In the absence of a post-Brexit agreement, the English CCPs will no longer have an authorisation to carry out the clearing.

A proposal for a European regulation on CCPs[2] incorporating the founding provisions of the EMIR regulation now distinguishes between three categories of CCPs:

CCPs of non-systemic importance,
systemically important CCPs, and
systemically important CCPs whose size is considered too large to be subject to the conditions of other systemically important CCPs.
CCPs deemed to be of systemic importance will only be able to provide their services in the EU under very strict conditions defined by the proposed Regulation.

Nevertheless, CCPs whose systemic importance is considered too high will not be able to benefit from the same recognition conditions as those for systemically important CCPs, but may nevertheless apply for accreditation. However, it will remain open to the European institutions (in particular the Commission or ESMA) not to grant this accreditation to certain CCPs.

In conclusion, Brexit will provide an opportunity to review all contractual documentation relating to derivatives and other framework contracts (repos – loans). The timing is nevertheless questionable because other important projects are underway (updating benchmarks, updating prospectuses), a real strategic analysis (costs/risks) of future operations is necessary, inertia is not a solution!

1] See ISDA’s work on taxation during the Brexit.

2] Proposal for a Regulation of the European Parliament and of the Council of 13 June 2017 amending Regulation (EU) No 1095/2010 establishing a European Supervisory Authority (European Securities and Markets Authority) and amending Regulation (EU) No 648/2012 as regards the authorisation procedures for central counterparties and participating authorities, as well as the conditions for the recognition of third-country CCPs: EMIR REFIT.

Meissa LOMeissa LOAugust 14, 2018


The African continent has attracted a lot of foreign investment (corporate financing ) in recent years. As the continent that was less impacted by the 2008 crisis, Africa continues to attract more and more foreign investors from diverse backgrounds (China, Russia, America, etc.) and the most coveted sectors are technology, industry and energy.

This attraction is not only due to the wealth abounding on this continent, but above all to the fact that several reforms have been undertaken by various emerging and developing countries, such as: the revision of the investment code, the prudent economic and financial management of governments, the harmonization of regional regulations, efforts to close the infrastructure and energy gap with a view to attracting foreign investment as much as possible.

This trend was also reflected in the financial market climate and the number of IPOs (initial public offerings) for the development or growth of a company. At a time when banks and other financial services (microfinance) on the continent are deigning to meet the demands of companies for their financing needs, a trend has been observed since 2010 to be listed on African stock exchanges.

corporate financing

It is clear that this is not a shift from bank financing to raising funds in a financial market, but rather for some companies it is an attempt to diversify the means of financing. However, banks and financial markets alike have the same difficulties in having enough liquidity to meet the demands of these companies.

It is important to note that according to a report by the American firm McKinsey, the number of Africans with a bank account increased from 170 million to about 300 million between 2012 and 2017, so the number tripled in 5 years.

The large share of banking services, the low level of savings invested in stock exchanges and the lack of liquidity and the normalisation of financial markets must be the subject of in-depth analysis by the financial actors in these regions, as this constitutes a constraint for companies and other agents in need of financing.

Several analysts of the Financial Economics Review have shown that companies must carefully study their initial public offering in these stock exchanges to avoid premature failure at the earliest stages of listing, as it is easy to note that some conditions are not appropriate for large companies in sectors where the need for financing is high (energy, technology, pharmaceuticals, etc.), but this does not mean that a listing should not be considered on any African stock exchange, unlike the Johannesburg Stock Exchange which seems to provide the necessary conditions for good listing of companies and for their development.

Although the sometimes unstable political climate in this area can also be a downside to a listing project to raise funds.

An initial public offering is made by a company in order to seek financing outside the banks. This alternative is used because the company is confident in the financing capacity of the service it is targeting. So, when African financial markets lack liquidity, this can be seen as the primary cause of deterrence.

Thus, in my opinion, the campaign to make the stock markets liquid must involve both market participants and the State, given that for the latter the liquidity of the financial markets is favourable to it in the sense that it will enable it to launch bond issues and finance its major public projects.

The cultural realities of the continent show that people prefer to keep their money in their homes or participate in traditional banks called “Tontines“, which is an agreement between several people pooling goods or capital with the particularity that the sums paid, their products or movable or immovable property will be purchased with the help of capital and this for the benefit of everyone, therefore in turn.

To be able to get their hands on this granary or popular savings, financial markets must conduct communication campaigns as do retail banks, which we do not often see in these countries. Because most people are unaware of the existence of scholarships.

To attract this savings from the “informal sector“, it is therefore necessary to go through intensive financial education, which is a path towards financial inclusion.
In addition, there is a development of trust, as some bankers would be seen by Africans as “thieves”, which means that they do not trust the services they offer.

However, these solutions are by no means exhaustive because, as some analysts have pointed out, there is really a complexity and countless obstacles that have not yet been taken into account in creating favourable conditions for companies to be listed on these African stock exchanges and in taking charge of companies’ and governments’ liquidity research.

Florent BOUILLYFlorent BOUILLYJuly 28, 2018


Lean managements technics are very efficient tools used to increase productivity  and processes in several sectors  (financial services) such as automotive. Indeed, automotive companies are using lean management technics for several years and a well-known pioneer of these technics is Toyota. The founder of lean approach was, Taiichi Ohno, an executive member of Toyota during the 50’s. He wanted to focus on production processes, wastes, value streams and the Kaizen to improve Toyota’s efficiency and be more competitive on the automotive market.

This is the reason why, today, Lean manufacturing is often called “Toyota Production System” and this model is analysed by many companies in order to improve their activities.

In 50 years, Toyota became leader of a highly competitive market being in average 4 times more productive and 2 times more profitable than other competitors. These results are mainly due to Lean management and the way Toyota is organized, consequently we will look at how can we implement this model in financial services in order to reduce wastes and produce a more profitable and qualitative service.

financial services

Indeed, financial services are following very strict procedures mainly because of legal requirements and these procedures can be improve using lean management technics. As we discussed in the introduction, effects of lean has been demonstrated in the automotive sector which is organised by a succession of stages aiming to produce a final product.

The way Financial services are operating today, using sets of procedures explaining steps by steps what to do to accomplish a specific task, lead us to the conclusion that lean management technics used in manufacturing industry can be adapted to financial activities.

Knowing that lean management can be adapted to financial company, the most difficult point is now to look at how can these technics be implemented.

5 steps to Implement a lean strategy:

A first step that company usually follow is to choose one or several pilot sites where they will test and generate their news technics and ideas on current practices. This step should last 1 or 2 years in order to analyse effects of this new organisation on company’s activities and observe points that need to be improved.

Step 1: Define a target:

Define several objectives corresponding to key deadlines which could be represented in term of value, time, customer satisfaction or any kind of measurable data.

Step 2: Map

This step is important because we will define every action needed to create value in the activity such as the different step of a car production. We will create a map or a timeline going form the current state to the future state. This timeline or map is commonly called “value stream”. Then we will identify and categorize waste in the Current State, and eliminate them. This step will end up with a process where only “useful” steps are present.

Step 3: Flow

We will organise the value stream as a flow of step that we perform one after another. Then we will turn the flow to a product or service-focussed organization in order to put the service’s quality and performance as main point in the company. This will directly impact the production’s duration or services performance.

Step 4: Pull

This steps is mainly use for production of finished good as we will let the customer pull products as needed and so eliminate the need for sales forecast. In a services industry, such as finance, we will highlight which steps are needed by customers and focus on these ones. Consequently, it will remain only useful task and services in the company’s process as both customers and organisations will express what do they expect from each other.

Step 5: Perfection

This steps is not the end of lean implementation process because we can always improve a service or a production. We will restart at step 1 and go through every step again and again in order to keep only essential parts of the value stream.

What impact can we expect on Financial activities?

We can often hear people saying that lean management is only efficient in manufacturing activities because they are producing the same kind of product several times over long periods and that we can easily standardize this flow of production.

When we talk about implementing lean in industry of services, main part of people say that lean management is not applicable because tasks are too complicated.

When we step back and reflect about it, we observe that services are composed of long processes which could be sometimes more complex than those of manufacturing industries because they need to be specific to each client. The important thing to notice is that as long as we have processes to improve, lean management will be useful for the company. Hence, having processes in the financial industry makes the lean management implementable.

A difficult point will be now to convince people to get involve in a such organisation as lean strategy usually takes place on the long term and result are difficult to see on the sort term.

Many people will ask you the following questions: “Does this strategy will positively impact the financial turnover of the company? Will we see a real improvement on a financial point of view?”

A simple answer to this question is to make a quick exercise.

Find two teams having similar missions such as entering consumer transaction. We will give to each member post-it and ask them to detail how they process step by step to accomplish the task. This will create a map of the employee activity and way of working. At the end, we will put on a wall every map coming from each employee and will see which step are the most listed. This will give us the most important part to keep in the process and we will be able to look at the remaining others and see if it is possible to remove them.

After this exercise, we can now prove that on a middle to long term strategy, after some change in team’s organizations, the company will be able to perform a quicker and more qualitative service to its customer. The financial result of this strategy will be the reduction of costs, (less time to perform a task) and also an increase of the company’s turnover because employees will be able to perform more tasks in a same period of time compare than before thanks to this new organisation.

Lean is about standardizing processes to make problems visible and developing your employees’ critical thinking ability so that they can solve those problems and improve work processes. In these conditions, financial industry can take advantage of these methods and it’s sure that some of them have already started to use them in their daily activities.



Lauriane NYALauriane NYAJuly 26, 2018


This concept of finance called “green” has always been talked about for quite some time. At first glance, we could say that these are two rather contradictory notions (finance and ecology), but here we need to find solutions so that finance can put a stone to the building of a healthier planet.

We have on one side ecology, a field whose main goal is to allow a better preservation of natural resources. On the other hand, we have finance, whose main ambition is to derive as much benefit as possible from natural resources, and inevitably includes their consumption.

The ultimate question here is therefore: is there a possible reconciliation between finance finance and ecology.

finance and ecology

To be able to do this, it will first be necessary to get rid of the agreed postures, the overrated speeches, in other words the “politically correct”. Nature is considered as a gift of which men are the guardians and which must be preserved for future generations.

Then yes, it becomes possible to draw a common path between these two thoughts. Between finance and ecology, finance is already seen as a means (and not an end) for economic development, while accepting some form of decline for consumer goods and energy use, so why can finance not be at the service of man? This must be seen as an individual responsibility, but also a collective and prospective one, i.e. a transgenerational responsibility in order to leave immediacy and think about the distant future.

Thanks to this trendy concept of finance verte, projects are being set up to enable the financial world in general to be more ecologically responsible. This would allow it to meet its resource needs while remaining within reasonable limits, which could be delineated by different consensus. Even if this is not totally obvious, efforts are being made to achieve this result.

This is about investing in more projects that play a more important role for nature. Among these investments we have renewable energies, which are a very concrete example, because we are dealing with the long term. Moreover, these energies are much more profitable than fossil fuels. But we cannot deny the fact that such a transition is both financially costly and very spread over the long term.

As another possible constraint, we have the failures present in the world of finance (example: 2008 crisis) which could have rather disastrous consequences on nature if we were to entrust it (ecology). It is therefore obvious that in order to reconcile the needs of finance and ecology, it is necessary to set the limits not to be crossed, and the objectives to be achieved in order to ensure good conservation of nature and a good financial return.

This would require meetings between ecologists and financiers, without anathema or prejudice, such as the COP 21 in Paris.

In general, it is concluded that green finance is quite possible, and the discussions essential to the success of this project are already being carried out by the organizations concerned. The implementation of this project is on the rise, we have faith in the success of this collaboration yet so unexpected.


AvatarThibault MEYNADIERJune 18, 2018


The digital revolution, which can be defined as all new technologies; Big data, Artificial Intelligence, Machine learning, BlockChain, or the Internet is tending to develop strongly in the financial world (digital finance) and this in all professions.

Whether from a task automation point of view, information processing in the back and middle office professions, or from the front office side with powerful calculation methods to perform predictive analyses, arbitrations, or automate transactions or even from the asset management side with robo-advisory. Everything goes through it.

digital finance

Despite all these innovations and major changes, it now seems difficult to measure the real impact of the digital revolution on market finance, unlike other sectors that have been profoundly changed by this revolution. So how can we understand digital technology in market finance? (difficulty and levers)

Initially, the dematerialization of finance is in fact an old process that is already anchored on the markets, such as the SWIFT system for bank transfers that appeared in the early 2000s. The famous “MTF” trading platforms were also created shortly before the 2008 economic crisis.

All this means that the major players in the financial markets were already used to digital technology and in particular process automation. Unlike many other sectors, digital technology has not disrupted finance. But it can be said that in recent years, innovation in the digital sector has grown significantly and individuals have much higher requirements in terms of speed of transactions in particular.

Moreover, the emergence of Startups specialized in finance, known as “fintechs”, are not only direct competitors of major credit institutions, as one might think, but most of them are in fact there to develop new technological models to improve the existing services of the major banks to which they are attached.

Fintechs are appreciated by large banks because they have more appropriate human resources, they are more efficient, more flexible, and the speed of project execution is higher than large groups.

The blockChain, for its part, is a real technological breakthrough, more and more present over the past 4 years, it constitutes a real breakthrough lever for large financial companies. Indeed, the field of action of this technology could profoundly disrupt market finance by eliminating intermediaries (compensation, transactions, bank syndicates, for example).

The increasingly strict and restrictive regulation of market finance over the past ten years has also helped to reduce the scope for innovative companies and the emergence of new technologies in this sector.

Thus, all these technological upheavals may prove in the coming years to be an important growth driver for market finance, which has seen its revenues decline since the repeated crises. This could simplify finance, reduce costs and thus increase the profitability of the sector, or even generate new jobs.



Since the 1850s and the industrial revolution, the growth of the world population has been increasing steadily. In 2017, there are about 7.6 billion people in the world, 962 million of whom are over 60 years old. According to a UN report, there will be 11.18 billion of them, including 3.1 billion over 60 years old by the end of the century. Growth will therefore represent more than 222% for this segment of the population compared to 47% for the overall population. So, have a look on this: The activity related to the elderly, a market of the future.

If we compare these figures with data on economic activity related to the elderly, we can see that there is a strong potential in this market. Thus, according to the Director of Global Thematic Management at CPR AM Vafa AHMADI, “for more than 15 years, companies linked to ageing have had an average growth rate in turnover and results that are higher than the rest of the economy (between 1 and 1.5%) and a lower cost of capital”.

Similarly, Bank of America Merill Lynch now estimates the silver age industry at $7 trillion and could reach $15 trillion by 2020, an increase of more than 200%.


Even if these economic data remain projections, the market retains the growth potential of older people’s activity in relation to demographic data. In addition to this structural trend of the silver age, its purchasing power is linked to the importance of the assets held by this segment of the population, which reinforces the hypothesis of a positive evolution of this market.

These are the reasons why the financial markets are interested in the activity of the elderly. In recent years, several UCITS/SICAV funds have emerged that specialise in the silver age business. These funds mainly include the health, financial services and cyclical consumer sectors that provide solutions for people over 55.

The main funds dedicated to this sector in France are Generali Investments Sicav SRI Ageing Population, CPR Global Silver Age (Europe), CPR Silver Age (world), LO Funds – Golden Age, Schroder International Selection Fund Global Demographic Opportunities, Robeco Global Consumer Trends Equities and Performance Vitae.

To conclude, we can also add a psycho-behavioural component to this subject with the evolution of generations and mores. Children no longer necessarily live close to their parents’ home due to increased mobility and telecommunications. It is now possible to “take care of your parents at a distance”. Thus, it is not uncommon today to have people over 60 years of age alone or with their spouse who need care or home help services and who have little or no opportunity to travel.

The solutions proposed by the silver age companies then take on their full meaning because they adapt to these new parameters and enable these people to be cared for at home. In addition, there is a real need for autonomy for these people, which is likely to lead to the emergence of innovative services based in particular on new uses of artificial intelligence in full development.

One example is a person in need of 24/7 assistance, it may be financially difficult to assume and practically impossible to find a solution other than a retirement home but can be accomplished effortlessly by a robot at a lower cost and perhaps under more satisfactory conditions for the population concerned, the inadequacy of staff and resources in retirement homes being regularly pointed out.


Sources: Bank of America Merill Lynch, UN, Morningstar with-a-management-th%C3%A9matic.aspx

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