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April 1999

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  • The big thrust of privatization in Spain is almost over and domestic and foreign investment banks must trim their strategies to cope. Most are confident that private and family-owned businesses seeking listings will provide lucrative business but competition will be fierce. Jules Stewart reports.
  • Ex-JP Morgan banker Peter Woicke is the new chief at the International Finance Corporation. He will also be responsible for guiding the World Bank's work with the private sector. He talks to Euromoney's James Smalhout about his plans.
  • Euromoney has once again ranked the world's best hotels, airlines and airports according to the preferences of senior executives across the globe. Which are the world's favourite hotels for business travellers? And which airlines should you fly with and which should you avoid? Research and report by Carolyn Dowd.
  • Operas at the Arena, day-trips on beautiful Lake Garda and romantic walks under Juliet's balcony. These could be the new pastimes for IMF staff and officers in a few years, if the mayor of Verona succeeds in getting the organization's HQ moved there from Washington.
  • The fall of German finance minister Oskar Lafontaine is bullish for German financial assets, but only in the short term. Euroland remains a slow-growth region. So, after a brief rally, I reckon the euro is set to weaken again against the US dollar, moving towards parity. The European Central Bank will now be much less reluctant to cut interest rates in order to fend off EU recession. There's no justification for maintaining real rates of 2% to 2.5% when real GDP growth in the euro zone is sub-par and slowing and inflation below 1% and falling. Short rates could go 50 to 75 basis points lower by the year-end. That will help German Bunds and equities, which have underperformed the EU average by over 10% so far this year. That performance gap will narrow quite quickly.
  • Goldman Sachs has apparently managed to get itself out of a spot of hot water in Thailand after issuing a research report which dragged the finance minister into a row with a leading newspaper.
  • If you were trying to scupper the career of an over-zealous colleague, this is the sort of financing mandate you might want to throw in their direction: first, make it a commodity deal (preferably not oil which is suddenly showing signs of revival); second, set the deal in a developing country, at a time when emerging markets are out of vogue, and local currency financing is scarce. Finally, throw in a little political difficulty, such as the arrest of a former president, which leads to fighting on the streets and the threat of trade sanctions.
  • To paraphrase American satirist PJ O'Rourke, if you buy yourself something with your own money, odds are that you'll spend time making sure you get exactly what you want. If you spend your own money on something for someone else, you won't be quite as careful. But if you're given money by one person and told to buy something for someone else, you're likely not to be careful at all.
  • The Nuovo Mercato is "a new market for small and medium-size companies [that] can help to develop a real market culture in our country." Thus Massimo Capuano, chief executive officer of Borsa Italiana - the company that runs the Italian stock exchange, introducing Italy's new equity market. The Nuovo Mercato - literally the New Market - will be the Italian equivalent of Germany's Neuer Markt and France's Nouveau Marché: a stock market especially designed to give high-growth companies access to funding.
  • A new symbol for promoting shareholder rights has emerged in Russia - the toilet roll. The lavatorial necessity graced Russia's TV screens nearly everyday in the last week of March. It was part of an ad campaign by American investor Kenneth Dart in his battle against Russia's second-largest oil company, Yukos.
  • Just got home from a hard day's work? Why not heat up some leftovers, make a cup of coffee and - during those few idle seconds - punch a few buttons on the microwave door and get your bills paid.
  • The problem with anything Japanese is that it all depends on your point of view. Three Japanese groups fail with more than $10.4 billion worth of debts. Tokai bank has just announced that it will forgive more than $3 billion worth of debts. Shareholders - other banks - in LTCB will get nothing from last year's forced nationalization. And Nomura - once the flagship of Japan's financial services industry - has recently announced losses of $4.6 billion, has been downgraded to junk status and has said goodbye to Max Chapman, the chairman and chief executive of Nomura Securities International.
  • Thailand's economy remains mired in recession and the banking sector is still groaning under the volume of bad debts. But the evidence of a turnround is growing. A new bankruptcy law should give banks confidence to extend new loans; foreign banks have injected new capital into the banking system; the best Thai borrowers are finding ways to issue new debt; and, perhaps most important of all, the Thai people's famous optimism is returning. Gill Baker reports.
  • What happens when you get Australian bankers on a beach for a barbecue? Euromoney invited five of Australia's top debt market professionals to Nielsen Park beach to find out. Steven Irvine put some prawns on the barbie.
  • Never one to rest too long on my posterior, I jet in from Hong Kong to Sydney, and arrive rather the worse for Qantas at the airport. A chirpy customs man asks my occupation. When told "journalist" he asks what I intend to write about in Australia. When I reply "financial markets" he says: "Well that'll be pretty dull for you." This does not bode well.
  • Macquarie Bank is a rare type of investment bank. It has made returns on equity of over 20% for 10 years by constantly moving into new business areas such as property securitization. Steven Irvine meets its managing director Allen Moss - a man who eschews ostentation and wears pens in his pocket - and head of infrastructure and asset group Nicholas Moore.
  • Despite persistently high inflation and international financial turmoil, the Turkish economy continues to defy gravity. The country's banks lend to the treasury in lira at high interest rates. As a result, they can offer attractive interest rates on foreign currency deposits too. Armed with a fictitious $50,000, Metin Munir finds out just how good these rates can be and explores the role played by the banks in propping up Turkey's "unsustainable" economy. By Metin Munir.
  • As credit research burgeoned last year there probably were analysts who could command seven-figure salaries. Demand is still high but supply is catching up. The best research houses are formalizing their approaches and a pecking order is developing. Rebecca Bream looks at what's on offer.
  • The advent of the euro has prompted banks to reorganize their bond trading and provoked a new scramble for supremacy. Deutsche comes out top for trading euro-denominated bonds in Euromoney's annual bond-trading poll. Research by Miranda Crowell. Report by Hannah Wilde.
  • Africa - for long an economic graveyard - is attracting more interest than ever before,spurred on by a new legal framework and a slowdown in Asian development. Project-finance lawyers are leading the way. By Christopher Stoakes
  • There aren't many real ex-rocket scientists for hire, but another area investment banks might look at is nuclear engineering - a skill that's becoming less sought after these days. Merrill Lynch's affable new hire Dante Roscini spent five years designing nuclear power plant before dwindling enthusiasm for the nuclear industry prompted a rethink. After business school he ended up at Goldman Sachs in 1988.
  • Euroland's biggest banks? Assets (€bn)
  • After so many months of nervous promises that the euro would herald a new era of bond issuance and credit awareness, bankers can hardly believe it. Volumes in the first quarter have been huge. Europe's investors are forsaking the safety of government bonds and placing big orders for corporate paper. In this new market everything is up for grabs. Market practices are ill-defined, pricing is uncertain and the league table results are wide open. Peter Lee reports.
  • When a Wall Street law firm was asked to advise on investing in Hungary in 1989, it fell to Douglas Rediker, then a 30-year-old attorney, to do the research. "When we asked the opinion of a Hungarian lawyer," Rediker remembers, "we'd get back a hand written note saying: 'Dear Mr Rediker, It is okay to do what you ask.' It didn't give us a whole lot of comfort. On the other hand it was quite intriguing."
  • Talks on the restructuring of GKOs - Russian treasury bills on which the government defaulted last August - have once more been cast into disarray just days before a deadline imposed by the Russian finance ministry was due to expire.
  • The consolidation process that has been reshaping the Italian banking system for the last three years reached a climax on March 21, when four of the five top banks in the country announced their intentions to merge following hectic negotiations.
  • So, the succession at Chase is decided. Bill Harrison will inherit a bank riding high in the league tables, doing deals in the darkest days of the crisis and basking in the respect of its peers. How did Tom Labrecque and Walter Shipley do it? By rethinking the bank's whole approach to risk management and being able to say no to marriage proposals. But if it is to continue on this roll and become a true one-stop shop, Chase needs to do a deal sooner or later. Michelle Celarier reports.
  • The EBRD's shareholders demanded that the bank be big in Russia. The investment bankers running the place responded by making deals. The result? €261.2 million ($284 million) of losses last year more than half due to provisioning against the Russian portfolio. New president Horst Köhler says that strategy not volume must drive programmes in future - corporate governance, institution building and lending to small enterprises are his top priorities. But below him not a single head has rolled even though EBRD bankers sat on the boards of Russian banks that went under. Only in a public institution would they get off so lightly. Brian Caplen reports.
  • Public Pfandbriefe sold by German mortgage banks are a familiar sight in international capital markets. But less well-known is what's swimming around in the underlying pools of collateral - and how the issuers earn their money. Another Orange County in the making? Marcus Walker investigates.