LTP Trade Finance IndexÖ - August performance update

The LTP Trade Finance IndexÖ - the independent total return index covering the trade finance asset class - achieved a modest increase in August as both global Trade Finance credit spreads and US$ LIBOR rates tightened. The steady widening of credit spreads during the opening four months of 2001 has given way to a period of broad stability between May and August, reflecting in large part the temporary resolution of economic problems in Argentina and Turkey. The Argentine stand-off dragged on a little longer, but the decision by the IMF to advance yet more cash appears to have hauled the economy back from the brink of default - for now, prompting a sharp reduction in the generic country risk premium demanded by the Trade Finance market.