The International Securities Market Association returned to the South of France for its 28th annual meeting this year. Those who had been at the legendary two-day bash in Nice 12 years ago, where antique chairs were thrown through unopened windows at one member firm's twelfth floor party, expected great things from Cannes.
Isma veterans reflected that this meeting was not quite so riotous, although it didn't lack its touches of excess. At the welcome beach party, bond traders and other delegates were ushered through floral bridges held by local peasants.
This was immediately followed by the Euroclear party which provided the highlight of the conference: two glass cubicles raised 20 metres above the Hilton's foyer. Inside them, two robotic mermaids dancing with hairdryers blowing their long tresses.
The robots proved to be topless, and soon one of them broke into giggles, betraying the fact that she was a lowly human. One broker instantly made a beeline for the stairs, determined to check out these heavenly creatures by entering one of the cubicles. Fast-thinking security intervened.
The meeting began in earnest next morning in the auditorium of the Palais des Festivals. An experienced delegate advised a younger colleague: "Don't sit at the back. The latecomers wake you up at the end when they come in." One Swiss trader never arrived, after spending an hour and a quarter trying to find the auditorium. Apparently no one could tell him where it was.
Records show that 463 members were present - 58% of the total membership. Over 79% had hangovers. There were 81 member firm resignations.
In the course of two and a bit hours not a single delegate asked a question, even when invited to do so. Isma's flagging membership was noted, although chairman, Rijnhard van Tets did his best to reverse the trend. According to the participation list, his bank, ABN Amro, brought 17 delegates, nearly twice as many as any other institution.
Most puzzling was the board's decision to suppress the perception report it had commissioned last year. The so-called Ludgate report was written after exhaustive interviews with 67 member firms. A German newspaper, which obtained a leaked copy, reported that a key criticism was the poor image of the annual meeting, especially the unbusiness-like locations selected - such as Cannes.
In the coffee session, the regional representatives, the power-wielding mediators between the board and Isma members in different countries, moaned about the vague three-page summary of the report that they had received. "It is all very sinister. I am not happy," said one regional baron.
The morning ended with the nailbiting elections to the 15-strong Isma board. Which of the five candidates would get the five board places up for grabs? No such cliff-hanger had been seen since the re-election of Enver Hoxha. All of them made it. Even - for the first time - a woman, Tinny Hasendonckx, head of Eurobond trading at Kredietbank.
Isma chief executive John Langton announced that next year's venue would be Singapore and added, to whet the bondsmen's jaded palates: "I understand Mr Leeson may be there if he gets time off for good behaviour."
... Trichet caught napping on Emu After a hard night at the Cedel party, in which both Brazilian dancers and the alcohol flowed in equal measure, it was surprising that virtually all the delegates turned up the next morning for the final debate of the Isma meeting in Cannes - on European monetary union (Emu).
The first speaker was Jean-Claude Trichet, governor of the Banque de France who called Emu "not that extraordinary an adventure" and pointed out that six currencies representing 170 million people have had no re-alignment in the past nine and a half years. He sprinkled his speech with the phrase "When the time comes...and the time will come."
Lord Lawson, former UK chancellor of the exchequer, put things back on a saner footing, and called Trichet, "a man who represents the best side of the formidable French bureaucracy." The Germans in the audience were still laughing as Lawson launched into an anti-Emu tirade that pointed out that 1998 was the 50th anniversary of the Deutschmark, and that the Bundesbank was not about to allow in the "profligate Club Med countries" such as Italy and Spain.
Moreover, he noted the chances of the Maastricht criteria being met were slim - if you examined objective forecasts, such as those of the IMF: "I stress the word 'objective', because there are also forecasts produced by the European Commission."
Isma chairman Rijnhard van Tets joked: "We've had the bid and offer side of the trade. Now we need to find an American broker to match it." The chosen broker was Fred Bergsten, the director of the Institute for International Economics, and a man who was clearly used to keeping his audience rapt. He gave his views on the dollar, and halfway through Trichet fell so deep into contemplation that his eyes closed - for a long time. Dazed delegates picked up their free Isma umbrellas and left.
Steven Irvine
My wine is my bond, and I drink my coupons It's a bond that guarantees a fruity aftermarket performance, and looks set to mature in five years with a full bouquet. The debut issue of Chateau Teyssier, a vineyard, pays its coupons every June in wine.
Matrix Securities is lead managing the issue of 375 'winebonds'. "Make sure the red is open for at least half an hour. Pour it into a glass and stare at it for a bit," advises Matrix syndicate manager, David Royds.
The bond will entitle the holder to receive six cases of either the chateau's claret or its rosé in the proportion of its choice from 1997 to 2001, and more importantly four cases of the prestigious Saint Emilion Grand Cru between 1998 and 2002. The retail value of the wine is £5,000, but the bond will cost £2,650.
Matrix Securities is more normally involved in tax-break products in the UK rather than bonds, but the Savile Row-based firm says that after April this business goes quiet. Englishman Jonathan Maltus approached it to launch a wine bond for his Bordeaux vineyard, Chateau Teyssier. The $1.5 million of proceeds will be used to modernize and expand production, and buy some Saint Emilion vines.
Maltus concedes that the "vintage is at the mercy of the gods". But the less expensive rosé is well regarded, and recently won a bronze medal at an international wine challenge. The rosé and claret sell for roughly half the price of the grand cru and are designed to be drunk now while the bondholder lays down the cru, waiting for it to mature.
Yann Gindre, a debt origination supremo at BZW and thought by some to be the André Simon of the bond markets, was not over-impressed with the claret. After a couple of glasses he pronounced it "a tightly priced issue that will sell at full fees." He added: "It may need a strong underlying market to perform."
Unfortunately the more pricey Saint Emilion Grand Cru, which will attract most bond investors' attention, was not available for tasting. It will not be consumable till August. But Euromoney's Friday afternoon research team concur if you choose to buy this bond it is worth shorting the claret in favour of the rosé.
Steven Irvine
A sporting chance Did you ever want your own a football club when you were a lad? Well, you just might be able to, thanks to Momentum Premier Sports, an investment vehicle the sponsors claim is the world's first ever hedge fund devoted to the burgeoning world of sports business. Bermuda-based, the fund aims to capitalize on the ever-increasing commercialization of sport.
Publicly-quoted Manchester United has seen the value of its shares rise by over 60% in the eight months to May 1996 in a season in which it won both the English League championship and the FA Cup; north of the border, Scotland's historic Celtic club has seen its share price rise by over 135% even in a season in which it failed to halt arch-rivals Rangers eighth Scottish Championship in a row.
But betting on match results is for the gambling industry, according to Michael Goldman, South African-born managing director of the Momentum Group. Instead, the fund aims to capitalize on the growing amount of money being channelled into sport as a business - particularly from TV deals - and many clubs' position as valuable, and still underdeveloped franchises.
But although football clubs may form the glamour end of the fund's targeted investments, they are likely to form only a minor portion of its eventual assets. Sports clothing and equipment manufacturers will be the main targets for the fund's managers. The prospectus mentions its desire to invest in manufacturers of such diverse products as mountaineering crampons, game-fishing landing nets, snooker triangles, sailing buoyancy aids and archery flights. Alongside Manchester United, Momentum Premier is already invested in sportswear company Nike and motorbike manufacturer Harley Davidson (admittedly not a core holding, said Goldman).
But if sport is the theme of the fund, its leitmotif is the wisdom of stock market legend Warren Buffet. "You've got to buy what you know," says Goldman. He promised that he would not fall sway to any emotional purchases of shares in his personal favourite Chelsea, the perennially underachieving West London football team.
Mark Johnson
Sour at krauts Black Wednesday hit the city of London on June 26. But it was nothing to do with stock markets. Rather, the despairing stares resulted from Germany's
6-5 penalty shootout win over England in the semi-final of the Euro 96 football championship.
It was perhaps the most important football match played on English soil for 30 years, so the rivalries between German and English bankers ran high. On Wednesday afternoon, pre-emptive strikes were made between London and Frankfurt with heavily-worded, medium-range e-mails. The famous German sense of humour came into play leaving some in the city unable to syndicate bonds.
One 'joke' went: "England cannot win the Euro 96 because Queen Elizabeth does not want to get kissed by Gazza." Gazza, alias Paul Gascoigne, is an artistic English midfielder.
But on Thursday the Germans, the eventual Euro 96 winners, had the last laugh. And unfortunately, the morning conference call to Frankfurt could not be avoided. But at one UK house, a syndicate manager set the tone for the day when he said: "Germany, you're not welcome." Another syndicate head, barely smirking, recounted that he cut back German orders throughout the day, "just to annoy them". Who said the English were good losers?
Franz Beckenbauer
Chase's chase Spare a thought for one small victim of merger mania, the Manufacturers Hanover Run, which two years ago was renamed the Chemical Bank Corporate Challenge and now has been seized by the Chase marketing machine. Ten years ago a few hundred runners panted five kilometres round the deserted streets of the City of London on a summer evening. Finishers got a T-shirt and a small bronze medal. Then, as the cult of the Gladiator seized the financial markets, the event migrated to Battersea Park and drew thousands of participants. One year the race was split in two - one evening for the elite, and another for the not so elite.
Chemical Bank carried on the Manny Hanny tradition. But the brochure writers for this year's race on July 10 clearly couldn't resist an unparalleled marketing opportunity. Every page contains a "Chase fact" - for example that "Chase is a top-tier player in project finance" or "Chase is a market leader in FX".
Morgan Stanley, which is fielding 260 runners, will have to improve on the legend worn on their backs last year: "The runner in front is from Morgan Stanley." We learn that very few of these T-shirts were read. A slightly different problem faced Mellon Bank whose female entrants understandably refused to wear the word Mellon on their front.
David Shirreff Compiled and written by Katharine Morton |