June 2006
| Euromoney June 2006 Europe’s government bond auctions are a classic example of market failure. The department of Charlie McCreevy, the EU’s markets commissioner, knows this but can do nothing until it receives an official complaint. If banks are subsidizing the auction process to the tune of €600 million a year, as some claim, why don’t they make the call to Brussels? |
Euromoney June 2006
Love them or loathe them, institutional investors are now an increasingly important fact of life for LBO financial sponsors. CLOs now account for more than 30% of the market in Europe and are starting to venture into every part of the LBO structure. But if things go wrong, there is now a fund manager across the workout table, not a friendly banker. Louise Bowman reports.
Euromoney June 2006
Given the range of institutions active in CLOs, there is remarkably limited tiering between names.
Euromoney June 2006
Access to collateral is the number one topic of conversation in the CLO market. But if a viable leveraged loan CDS market develops, Christmas will have come early for many players.
Euromoney June 2006
Who would hand over millions of dollars to a management group of a publicly listed company that does nothing, has no business strategy, has no assets and might never have any assets? But that’s what’s happening as more and more special purpose acquisition companies list. Why won’t the banks leading the deals talk about them?
Euromoney June 2006
Spacs increasingly interested in listing on UK's Alternative Investment Market.
Euromoney June 2006
Here are the bond issuers that have taken the market by storm over the past 12 months: from the IFC, punching above its weight within the World Bank group with its pioneering work in developing local bond markets, to Bayer’s use of innovative methods to maintain its credit profile while making acquisitions.
Euromoney June 2006
At a time when M&A volumes are rising, a toughening up of the CFIUS could deter foreign companies looking to buy in the US. And that would take a serious chunk out of Wall Street’s fees. Kathryn Tully reports.
Euromoney June 2006
Quasi-independent debt management offices are bringing new sophistication to government debt management. But de-risking government balance sheets that have so far failed to account properly for contingent liabilities may be beyond them. Peter Lee reports.
Euromoney June 2006
Euromoney’s new poll shows that, according to the world’s largest issuers, Deutsche and Citigroup have the quality as well as the quantity of business to maintain their leading positions. But, as Alex Chambers reports, the results also throw up some interesting contradictions.
Euromoney June 2006
Spain’s securitization market grew by more than 35% last year, driven by demand for more, and more flexible, mortgage credit. Specialist investors are now hoping that issuers can be persuaded to sell first-loss exposure to this risk. This comes, though, as concerns grow about the potential fallout from a seemingly unsustainable house price boom. Louise Bowman reports.
Euromoney June 2006
The ballooning demand for mortgage credit in Spain is attracting new players and more flexible products.
Euromoney June 2006
The structured bonds business is changing in emerging markets. The rapid development of local capital markets means that the product’s future lies closer to home. Euromoney takes a closer look at some of the developing world’s more innovative securitization markets and deals.
Euromoney June 2006
Although banks have been leading securitization developments so far in Russia, the monopoly railroad infrastructure provider has come to market with the country’s first transaction backed by lease receivables. Kathryn Wells reports.
Euromoney June 2006
Greece has lagged behind the rest of the eurozone in its use of techniques to free up value in real estate loans and assets. But banks’ needs for capital should fuel securitization, and new legislation will enable public bodies to make sale and leaseback deals. Dimitris Kontogiannis reports.
Euromoney June 2006
Euromoney June 2006
The eagerly awaited opening up of mainland China to Reits investment continues to hang fire but the market is hot elsewhere in the region, with retail and institutional investors piling into new issues. Some in the market, though, reckon that investors often have over-inflated expectations of Reits’ returns and a poor grasp of the complexities of the deals. Chris Wright reports.
Euromoney June 2006
After years of unfulfilled promise, there is the whiff of optimism in Indonesia as government tackles tangled economic and political challenges. Euromoney spoke to Indonesia’s finance minister, Sri Mulyani Indrawati, about problems, progress and promise. Chris Leahy reports.
Euromoney June 2006
Investors have welcomed Thailand’s largest IPO for years with open arms. The problem is that those investors are in Singapore, not Bangkok. The failure to list one of the kingdom’s prize assets at home is symptomatic of much larger problems in the country. Chris Leahy reports.
Euromoney June 2006
Banks in the Philippines are set for more consolidation as new regulations threaten weaker lenders in a fragmented market. High valuations have dissuaded some from deals, but economic recovery might force them to reconsider. Chris Leahy reports.
Euromoney June 2006
Despite brighter prospects for the Japanese economy, corporate issuers are not rushing back to the international or domestic bond markets. Chris Wright reports.
Euromoney June 2006
Japanese government-guaranteed issuers such as DBJ and JBIC have been among the largest issuers of debt from Japan. With reform of these agencies in the pipeline, what plans do they have for issuance as interest in the Japanese economy picks up?
Euromoney June 2006
A series of recent reforms has raised hopes that the capital markets will have a bigger role to play in Lebanon’s economic story. But is it another false dawn? James Featherstone reports.
Euromoney June 2006
Euromoney June 2006
Despite its size and maturity, the covered bond market is fast changing. New countries, new asset classes and new issuers vie for investors. But does the conflict between regulators’ desire for quality and consistency clash with investors’ needs for yield and diversification?
Euromoney June 2006
The advent of whole-business securitization and the creation of a liquid market in project-related debt has opened investors’ eyes to the rewards available in infrastructure. Governments’ desire for off-balance-sheet funding has also boosted the supply of suitable investments. But what makes infrastructure different? How do you buy it, sell it and manage it?
Euromoney June 2006
Although adoption of an exchange-like structure has been predicted for years, foreign exchange has predominantly been traded over the counter. Could a new initiative by the CME and Reuters finally force the transition through? Lee Oliver reports.
Euromoney June 2006
Time is running out for Eurotunnel as it tries to refinance its debt.
Euromoney June 2006
“Given all that has happened I’m surprised it wasn’t negative $60 billion”
James Gorman, Morgan Stanley
In his first public presentation since joining Morgan Stanley in February as president and COO of the global wealth management business, James Gorman outlined how he intended to turn the dwindling arm into a competitive force in the industry.
Euromoney June 2006
Yulia Tymoshenko, Ukraine’s former prime minister, says her political coalition is committed to a programme of privatization and economic reform if a representative of her team assumes the top job in the country’s next government.
Euromoney June 2006
Euromoney June 2006
NAIC’s SVO brings further woe to the hybrids industry; the US market looks less viable than it once did.
Euromoney June 2006
Floating rate notes are typically a short-dated bank product traditionally aimed at other banks’ treasuries. Is this the start of a new trend?
Euromoney June 2006
Bayer has played white knight for the second time this year. The German chemicals company rescued Schering from the clutches of Merck in March with a €16.5 billion offer
Euromoney June 2006
Euromoney June 2006
Euromoney June 2006
Euromoney June 2006
Following a two-year hiatus, Belgium settles trade with Citi.
Euromoney June 2006
Time is running out for Eurotunnel as it tries to refinance its debt.
Euromoney June 2006
AXA’s proposed extreme mortality cat bond will set the tone for the insurance securitization sector this year.
Euromoney June 2006
Bankruptcy of Nici shows vulnerability of small German SME securitizations.
Euromoney June 2006
The expected evolution of opco propco to the pub sector failed to materialize in May when Robert Tchenguiz’s Globe Pub Company opted for a whole business structure to fund the the ex-Spirit pub portfolio.
Euromoney June 2006
British Land’s decision to convert to a Reit might prompt the restructuring of its Meadowhall securitization.
Euromoney June 2006
Euromoney June 2006
Buy-to-let mortgage originators in the UK market have often argued that these assets should be seen as prime assets rather than non-conforming.
Euromoney June 2006
Having emerged from a reshuffle in in the Hypo Real Estate Group at the start of the year, Hypo Real Estate Bank International is the most significant institutional response to the Pfandbrief Act yet. The merger of two banks with distinct business models and funding tools has created a real estate financier well equipped to match its hunger for growth, writes Florian Neuhof.
Euromoney June 2006
HSBC’s decision to tell the world in advance when it is will carry out a large FX transaction to pay its non-dollar based shareholders their dividends is transparent. But is it wise?
Euromoney June 2006
Barely a month seems to pass without either the launch of a new foreign exchange trading platform or at the least a significant enhancement and upgrade to an existing one.
Euromoney June 2006
Until recently, it seemed that the big FX players in FX were happy to leave the retail sector to aggregators, perhaps taking comfort from the prospect that once these had built up a decent size position they would see the business anyway.
Euromoney June 2006
Euromoney June 2006
Euromoney June 2006
Euromoney June 2006
Richard Longmore, head of EMEA FX sales, has abruptly left Merrill Lynch.
Euromoney June 2006
“Given all that has happened I’m surprised it wasn’t negative $60 billion”
James Gorman, Morgan Stanley
In his first public presentation since joining Morgan Stanley in February as president and COO of the global wealth management business, James Gorman outlined how he intended to turn the dwindling arm into a competitive force in the industry.
Euromoney June 2006
Of the 8,000 or so hedge funds globally, around 97% are focused on the US and European capital markets. And although opportunities in Asia, Latin America, and central and eastern Europe are being recognized, with the net amount of money flowing into hedge funds that focus on emerging-market investments rising 13% in 2005 according to Hedge Fund Research, not many investors are sufficiently confident to invest in these regions separately.
Euromoney June 2006
Just three years ago, any small investor wanting to invest in gold had a very hard time of it. Few ordinary people have the facilities to take physical delivery of bullion, even if the asset class is the ultimate low-risk play because of gold’s inherent value.
Euromoney June 2006
Euromoney June 2006
Euromoney June 2006
Investment banks are thinking of setting up their own alternatives.
Euromoney June 2006
A rival trading platform for smaller stocks in London is giving the LSE a run for its money.
Euromoney June 2006
Funds are circumventing anti-concentration regulations with single-stock futures.
Euromoney June 2006
Euromoney June 2006
Euromoney June 2006
Yulia Tymoshenko, Ukraine’s former prime minister, says her political coalition is committed to a programme of privatization and economic reform if a representative of her team assumes the top job in the country’s next government.
Euromoney June 2006
Hiring and firing securities markets regulators on the basis of stock index performance is not a particularly credible policy. But that’s what the Saudi authorities did last month, sacking the chairman of the Capital Markets Authority, Jammaz Al-Suhaimi, a modernizer and reformer unfairly demonized on stock speculators’ bulletin boards across the kingdom as somehow being responsible for the crash of an overvalued market.
Euromoney June 2006
General prosecutor to appeal not guilty verdict against Ulan Sarbanov.
Euromoney June 2006
Saudi petrochemicals company Sabic will issue domestic sukuk bonds with a total value of at least SR1 billion ($267 million), according to the company’s financial vice-president, Mutlaq al-Morished. The bond should be finalized this month or next, with huge demand expected from the paper-hungry local market.
Euromoney June 2006
Overvalued IPOs give cause for concern. Some bankers are becoming wary of damaging their reputation with rushed or over-valued Russian IPOs. Two banks dropped out of a deal last month and some analysts urge that caution be exercised in further IPOs.
Euromoney June 2006
Troubled emerging markets companies could soon benefit from the development of sophisticated bespoke deals aimed at increasing investor confidence.
Euromoney June 2006
Russian firms seek investor-friendly foreign talent; investor-friendly foreign talent seek large bonuses.
Euromoney June 2006
Dmitry Eropkin, president of Russia’s Impexbank, said as Raiffeisen completed its acquisition of his bank that he expected to see “the consolidation of the top 50 Russian banks within the next two to three years”.
Euromoney June 2006
Euromoney June 2006
Euromoney June 2006
Indian companies have been the largest issuers of foreign currency convertible bonds in Asia. But there could be trouble ahead.
Euromoney June 2006
Euromoney June 2006
The listed infrastructure fund, which is common in Australia, is gaining traction in Asia, with two new structures hitting the market in recent weeks.
Euromoney June 2006
The global market tremors that have shaken emerging markets might have been expected to cause a few wobbles for the Bank of China IPO, but not a bit of it.
Euromoney June 2006
Euromoney June 2006
Euromoney June 2006
Maverick leader opens arms to international and national investors.
Euromoney June 2006
Euromoney June 2006
One year on, new bonds offer good value.
Euromoney June 2006
Euromoney June 2006
Euromoney June 2006
Southern Cross Group is making waves in Latin American private equity, standing out because of its aggressive and sometimes contentious strategy – it only invests in companies in which it has unchallenged control of management – which is bringing it high returns.
Euromoney June 2006
As more and more Mexicans are encouraged to buy their own homes, the companies that provide mortgages will increasingly look to the international capital markets to fund their lending. Armando Guzman, director general of mortgage provider Metrofinanciera, talks to Lawrence White about his expansive borrowing strategy and his hopes for the development of mortgage-backed securitizations.
Euromoney June 2006
The heyday of the traditional debt capital markets is long gone. Who would have thought that, some six months into the year, it would have taken just a $6 billion share of underwriting to take top place in the US investment-grade corporate bookrunner table? Go back to 2004 and it would have been something like $10 billion. Perhaps a bigger surprise is that this number trails behind the equivalent European league table (€8.5 billion).
Euromoney June 2006
Is there too much capital trying to find a home?
Euromoney June 2006
The ability of the CDO bid to distort the wider capital markets is significant – and growing.
Euromoney June 2006
Saudi regulator leaves a positive legacy for his country’s financial markets.
Euromoney June 2006
Hedge fund managers need to realize that many investors will be attracted most by track record and big-name managers.
Euromoney June 2006
Investors need to tread with caution as uncertainty surrounds the Federal Reserve’s next move.
Euromoney June 2006
Funds may take the chance to rebalance but don’t expect a crash.
Euromoney June 2006
Euromoney June 2006
Reports of the death of analysis have been greatly exaggerated. Time and again, analysts are proving their worth in league tables and through innovation and bespoke research. But ‘me-too’ forecasting is a hard habit to break.
Euromoney June 2006
The ability of the US to run a high current account deficit rests on a widespread belief that inflation and the cost of capital will remain low. But the conditions that underpin the deficit and the dollar’s role as the principal source of global capital are unlikely to be sustained for long.
Euromoney June 2006
Otmar Issing has been the most impressive advocate of the ECB. What happens now that the bank has lost its implicit third pillar in monetary policy?
Euromoney June 2006
Euromoney June 2006
Euromoney June 2006
Euromoney June 2006
Euromoney June 2006
Euromoney June 2006