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April 2002

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  • Hungarian oil and gas company Mol has set its sights on regional expansion and rationalization, with its current programme including bids for Polish companies and an offloading of its domestic gas interests. Both deals have, however, been disrupted by political factors.
  • Merrill Lynch has merged its high-grade and high-yield research teams. So has JP Morgan. They say it provides quality coverage, especially for fallen angels. But is it really just cost cutting in a bear market?
  • Research
  • Corporate Governance
  • Following Argentina's default the Washington Consensus seems completely devalued as there seems to be precious little correlation between the degree to which a country embraces reform and the likelihood of its economic success.
  • The uncertainty that has permeated the Pfandbrief market in the past two years persists. Investors are getting more choosy about issues, competition is intensifying in the underlying lending businesses and new regulations are adding their own challenges, some of which offer opportunities for diversification as well as restrictions.
  • Even after the dot com bubble burst, US investors continued to snap up the IPOs of another group of companies characterized by non-existent profits and total dependence on unproven new technology. Now many investors are regretting their enthusiasm for healthcare and biotech stocks.
  • The usually understated tensions between finance ministries and independent central banks have taken on a more vociferous tone in Poland, where finance minister Marek Belka is insistent that the National Bank of Poland is being tardy in cutting interest rates, thus perpetuating a period of economic stagnation.
  • China's securities markets seem to be on the verge of opening up to foreign houses working in joint ventures with local partners. The foreigners are divided on whether they should go for market share by taking on big partners or seek out smaller firms that bring the licences they need but are likely to have fewer skeletons in the cupboard.
  • Taiwan’s banking sector has a burgeoning non-performing loan problem that invites comparison with Japan’s. Swift and decisive action has been thin on the ground. Without it Taiwan may head down the same self-destructive path as its former colonial master.
  • Outsourcing is still a utopian dream for many investment houses. The idea that a fund manager can offload all of its back-office responsibilities and concentrate on investment performance alone remains an enticing aim, particularly in tough markets. However, so far only a few full outsourcing deals are actually being undertaken, with varying success, while one or two of the biggest custodians have yet to get their products off the ground. This stuttering start has left the investment community uncertain of its next step. If outsourcing really is investment nirvana, fund managers will still want to pursue it. However, the pain endured by those already on the path has made them wary. Will faith help to silence the doubters?
  • A point of increasing concern for Poland and its foreign investors is the extent to which the new government is committed to the rapid pace of privatization that characterized the country's successful early transformation into a market economy. On present form doubts are emerging about its willingness to press ahead with the rest of the job, particularly in strategic sectors and where the already high unemployment rate is likely to be increased.
  • Russia
  • India
  • Issuer: General Electric Capital CorpAmount: $11 billionLaunched: March 15 2002Lead managers: Citigroup/SSB, JPMorgan, Lehman Brothers
  • There's a game played by pretty well every banker who frequents development bank meetings. It could be called "What's the Mood?" Delegates look back on the chaos of the IMF annual meetings in September 1999, when Ecuador defaulted, or the unleavened pessimism of the IMF meetings a year earlier, held in the shadow of the disastrous Russian crisis. This year's Inter-American Development Bank (IDB) meetings can be summed up by the word "malaise".
  • Online Foreign Exchange
  • So, Deutsche Bank is buying Merrill Lynch. No, hang on, it's merging with UBS. Actually, Lloyds TSB wants to buy Deutsche. And if none of that works, Deutsche wants to buy PaineWebber from UBS.
  • Now hardly seems the time for Americans to be making pronouncements on European corporate governance. Yet Peter Clapman, chief counsel at TIAA-Cref, the US teachers' pension fund, has done just that.
  • Recent post-Enron SEC statements confirm that public companies in the US will soon have to undergo far greater scrutiny than ever before.
  • The email to Euromoney from Bank of Indonesia said simply that the governor wouldn't now be attending the Borrowers and Issuers Conference in Singapore so an interview wasn't possible.
  • Governor of the Bank of Greece
  • UniCredito Italiano is expanding fast in the EU accession candidate countries of central and eastern Europe, where it seeks local banks with good management.
  • Novelty names for special purpose vehicles in structured finance have all but disappeared thanks to Enron.
  • I have just got back from a visit to Korea. It's booming. National output rose 3% in real terms last year. Economic growth is accelerating. It grew at an annual rate of 3.7% in the past quarter and I reckon it's got further to go. Something near 6% this year looks likely.
  • Credit Fund Management
  • Deutsche snaps at Merrill's high-yield heels
  • Investment banking