https://mp.weixin.qq.com/s/c96abACIwWXIN1G4mODIrQ
Interview Guest | Founder General Manager of Risk Management Products Group at Xuan Zhang. Author: Gao Wei; For reprint, please contact the author poker king (ID: puoker) authorization. For more information about the China Enterprise Risk Management Forum clickable: an invitation from the Poker Finance: Do not control the wind made behind closed doors .
Interview background:
an excellent commodity traders, in order to combine the current basis, can span spot, futures, financial markets, comprehensive use of various tools futures, options, foreign exchange, financial instruments and so on. To Glencore, Trafigura, Mercuria, represented overseas stock traders is the model of which, by virtue of its superior control of power resources stock, warehousing, transportation, financial derivatives, etc., blowing hot and cold in the global market.
But after thirty years of development, the domestic spot traders whether such a giant Glencore, Trafigura, Mo Kerui it? As has been cultivating for many years now on the road of combining positioned as commodity traders and service providers Founder properties, both in the business model, risk management, or system construction have accumulated a lot of experience. Its development experience and thinking, it might be worthwhile to learn from peers.
This issue interview focused its exploration in the field of risk management. He mentioned domestic commodities trader what is most lacking in the field of risk management? Founder Products Group General Manager Risk Management Department Zhang Xuan to answer on the word: investment .
PUOKE Interview Introduction
Founder Products Group Ltd. (hereinafter referred to as "Founder property") as a set of trading and investment in one of the international commodity supply chain service providers over the years with the good reputation of the industry and the business philosophy of the times , has been living in the commodities industry leadership position. Founded 16 years ago, the company's average annual revenue growth rate remained above 30%, has successfully established itself as one hundred billion club.
Past interview Review:
Founder property: "Financial specializes in ingenuity", creating the risk of myth 0
Founder Products: period forerunner of the current risk control system (Part I)
Founder Products: air control system of the current forerunner (Part II)
PUOKE interview text
➤ Poker Finance:Will the Founder property which year the wind decided to develop intelligent control system? Before that have made what assessment? Development process which has encountered difficulties? How to overcome? Zhang Xuan in:2017 Founder of the property decided to build intelligent risk control system, before we conducted in-depth assessments from internal and external. First, assess the company's own business characteristics and risk management capabilities, by considering the case of aspects of the business size, business model, business maturity, we believe it is necessary to get through internal and external data to create intelligent risk control system, and thus more good support business decisions and the need to control; at the same time through the last years of accumulation and precipitation, the company has established a relatively sound risk management system, which laid a solid foundation for the construction of wind control system intelligent. Second, the typical enterprise in the field of commodities, including central enterprises, foreign and private enterprises, in-depth research to understand their business and risk management systems and information technology practice. Third, conducted an investigation related to information technology service providers, service providers involved in financial trading software, the traditional ERP software, service providers, domestic and international commodity trading and risk control management (CTRM) software service providers and other categories. Through the above assessment and research, we reached the following conclusions: First, the industry only a few businesses hit by the stock, trading, risk control end, the establishment of an integrated business and risk control systems, but relatively simple business model, not Founder of the property to meet the application scenario; Second, most of the background stock trader, to invest more in the cash supply chain system construction, but in the futures and derivatives trading and risk control aspects of the system construction is lagging behind, let alone achieve both integration and matching; Third, for pure financial institutions, financial transactions and in the construction of wind control system experiences relatively mature, but the lack of application scenarios spot; Fourth, few realize business, risk control integration solutions, most of the line is still in the stage of risk control, by a small number of similar import transaction data to the CTRM risk control system, in short, are all ex post risk control, can not be achieved before, stroke control.
For these reasons, we in the construction of intelligent risk control system, and can learn from the case is not mature, there is no package of information technology solutions, this is the greatest challenge we face. We finally decided on the basis of carefully combing over the company's needs, make overall planning an intelligent risk control system, the integration of all resources, step by step. ➤ Poker Finance: Founder of the current property risk control system and what improvements compared to last year? Whether the wind control system upgrade? Zhang Xuan to: have the following main aspects: First, we wind intelligent control system construction has made substantial progress, development of futures trading and risk control systems has ended, has now entered the acceptance stage. Secondly, we have strengthened the management of market risk, established based on the value of VAR market risk management systems. In recent years, macro-environment turmoil, "Black Swan more black", "gray rhinoceros bigger," commodity price volatility, market risk upgrade, the traditional stare position, set warning line management becomes too extensive, based on this we try to quantify the use of financial instruments, the establishment of a market-based risk management system var value, dynamic monitoring of the company's overall market risk and the various business units, dynamically adjust positions in the structure of various departments. Third, we adopted the method of financial engineering, based on the establishment of resource allocation mechanism MVO model, the rational allocation of positions and risk weight of each business unit weight, to achieve the company's overall risk-benefit ratio best. Fourth, in terms of credit risk, we have strengthened monitoring of external credit risk, the introduction of external credit risk monitoring system, the establishment of communication channels within the external credit information, early warning mechanism to create a "blacklist." ➤ Poker Finance: What are the main difficulties in the property Founder credit assessment model of cooperative enterprises, encountered? Generally complete credit assessment of how long a business cycle? Zhang Xuan to: In fact, credit risk management, we accumulated some two years ago we got poker risk control Finance Forum Annual Credit Risk Management Award. Credit Assessment Model Founder of the property has been relatively mature. This year just in the external environment deteriorating credit situation, do some optimization and adjustment, according to the situation of industry segments, an increase of some indicators in the evaluation model, while adjusting the right part of the index weight.
Overall, the difficulty is to obtain a credit assessment or external credit data. Currently credit management is still relatively closed circle, in terms of sharing of credit data, there are still some obstacles between peers. Our credit management team, in addition to general credit information concern data channels, but also pay attention to obtain first-hand information. On the one hand, the establishment of a multi-level communication mechanism with the front-line business unit, discover industry trends, understand the potential trade rivals operating conditions; on the other hand, I through communication with funds, financial, legal and other departments brothers, to grasp from the bank, customer credit information on tax, law firms, credit bureaus.
Our credit assessment model, year and will optimize back-tested to ensure the robustness and applicability of assessment models. Currently, we use to evaluate a new model of cooperative enterprise credit assessment is usually completed in one to three days for foreign customers may need a little longer time, which can well support the implementation of the company's business. ➤ Poker Finance: For market risk, we know Founder property has a large-scale international trade business in the field of commodities, mainly prefer to ask what exchange rate hedging instruments? Usually the ratio of exchange rate risk hedging is how much? The risk of commodity price fluctuations and how to hedge? How to balance between hedging and arbitrage? Zhang Yu Xuan: Founder property has always attached great importance to the management of currency risk hedging tool is very active in the use of exchange rates, in addition to using traditional means SGX, HKEx renminbi futures, and the bank exchange rate hedging products, we are actively exploring based on alternative means of foreign exchange hedging part of a specific commodity. In proportion to hedge exchange rate risk, we will give some limited business in the project, but also according to the specific business situation, give some autonomy to business units.
We are positioning commodities traderWhile our appetite for risk is relatively low, so most of our strategy is a combination of arbitrage strategies, regardless of the current period, cross-period, cross-market, cross-species, cross-industry chain, or other more complex trading models, they are by Double or long positions to hedge exposure to fluctuations in commodity prices unilaterally. ➤ Poker Finance: account, how to consider the choice of foreign trade varieties? Whether to follow suit control logic has combined? Zhang Yu Xuan: this mainly depends trading chance. We in the choice of varieties, are from the strategy. After the establishment of the policy, we will continue to optimize the configuration of which determines what kind of variety in the end we depend entirely on trading opportunities, and is able to meet risk control requirements. ➤ Poker Finance: architecture Founder property risk management department is like, how the specific division of labor can ask them? Zhang Yu Xuan: Risk Management Founder of the property is a middle office, covering market risk management, functional business management, credit management, logistics management, internal control and information technology and other aspects. ➤ Poker Finance: If the risk management system as well as room for improvement, as well as what you think could be improved? Zhang Yu Xuan: First, I think the whole commodities sector, in the financial quantification, the application of risk control model is not enough. With respect for the banking, securities and other financial institutions, we quantify the financial risk control means is not enough, we also need to learn more advanced enterprise, which is one of room for improvement; the second is in the area of risk management of credit, commodities big industry level credit data needs to be opened up, by means of a letter to be rich; the third is, commodities trader, how will the transaction in conjunction with wind control more organic, which we have been pursuing the matter, especially in business strategy itself and wind control means to combine aspects. Applications such as options, both as a means of risk management strategy is also investment transactions; there are many other aspects, I will not go into details.
➤ Poker Finance:What advice would have to supply the property Founder national currency hedging products? The main reason? Zhang Yu Xuan:First, I hope the regulators more open attitude to contain exchange rate hedging products, including derivatives, more recognition of their safe-haven role, and the formation of guidance, which is particularly important for SOEs is;
the second is hope that the domestic exchange rate hedging instruments richer, more designed to meet the business needs of the domestic product. Currently there is no such currency futures exchange tools, many enterprises are forced to go abroad to do, causing a lot of inconvenience. ➤ Poker Finance:You were there any suggestion in the field of risk control of state-owned enterprises and private enterprises to do business? Do you think your company's risk control experience can learn from them? Zhang Yu Xuan:this big problem, I can only say that some opinions. For state-owned enterprises, financial strength is relatively strong investment in terms of risk control is relatively large, including aspects of systems, information systems, personnel and so on. I think there is room for improvement in two aspects: First, change the "mismatch" phenomenon, it is necessary to attach importance to the construction of wind control system, but also to pay attention to the ground and practical operation of risk control measures; second is to change the business sector and the role of risk control department position, risk control further forward, one step backward business extension. About private enterprises, the more important thing is to raise awareness of risk control, and increase investment in terms of risk control, risk control staff or whether it is risk control systems. Leadership felt the wind does not control do not make money, in fact, risk control is not only to ensure the safety of principal, but also to ensure the safety of your money. It would also co-ordinate functions in the business and wind control architecture, let the wind control has a certain independence. Of course, the rhythm of the construction of wind control system to match the company's business development, neither aggressive, nor should it come to a standstill.
Founder property risk control in terms of years of accumulation, including various special risks (market, credit, goods right) to enhance the professional practice of intelligent risk control systems, quantitative tools to explore financial risk control, etc. in the field, I think that worth conduct extensive exchanges and communication with colleagues to, we work together to enhance risk management and commodities industry.