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April 1999

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LATEST ARTICLES

  • 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 Philippines began to woo a new set of investors in February with the launch of a euro-denominated bond. The issue is not without its critics and it was made amid mixed reviews from bankers of the country's efforts to pull itself out of the Asian crisis. Gill Baker reports.
  • 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.
  • Mix telephone evangelism with telephone banking and you have... Bank of Scotland's latest direct banking venture. The bank already has a UK operation in partnership with a supermarket chain, J Sainsbury, but it has chosen a more controversial partner for the US in the form of Marion "Pat" Robertson.
  • So farewell, then, Max Chapman, the banker who got closer to the top of a Japanese financial institution than any other westerner, and who resigned last month to spend more time enjoying his Arizona ranch and his personal fortune estimated to be $100 million.
  • 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.
  • The IFC and World Bank have spent much of the last two decades at each other's throats. The appointment of Peter Woicke as head of the IFC and a managing director at the Bank should change that. It should also help increase emphasis on private-sector funding. James Smalhout reports.
  • 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.
  • Taiwan's stock market paused for breath when local finance house, Pan Asia Bank, released its grim 1998 financial results. Pan Asia is too small to affect the Taiwanese banking sector at large but investors and analysts are worried that the size of Pan Asia's losses, NT$6.2 billion ($194 million), combined with an 8% overdue loan ratio, indicate that the Taiwanese banking sector could become the next victim of the Asian downturn. A total collapse is not forecast but deterioration in the sector's overall health is on the cards.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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."
  • 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.
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