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April 2003

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  • The strength of Islamists in the ruling AKP lay behind the Turkish legislature’s refusal to bend to US military strategy. The consequences may be dire for the Turkish economy and terminal for the AKP government.
  • Since taking over from Mahmoud Abdel Salam Omar six months ago, the chairman of the Bank of Alexandria and of Egyptian American Bank (Bank of Alexandria's joint venture with American Express Bank), Mahmoud Abdel Latif, has been busy trying to get the bank in shape.
  • The Egyptian government has a chequered record in implementing economic reforms. Praise for the success of its major anti-corruption drive and its adoption of a free-floating exchange rate at the end of January has been tempered by the introduction of capital controls only two months later.
  • Issuer: Allianz Size: e3.5 billion to e4 billion Bookrunners: Citigroup, Deutsche Bank, Goldman Sachs, UBS Warburg
  • The danger of accounting irregularities creeping up on them is the one gripe that pretty well all credit analysts have about their jobs at the moment. Post Enron, the idea of unwittingly recommending a company that turns out to have cooked its books is enough to bring on a cold sweat. "How do you predict problems such as Ahold's as an analyst? I think it's a ferociously difficult job," says Catherine Gronquist, director of international credit research at Morgan Stanley. "These demands on them have tested all credit analysts on the buy side and the sell side to practically their breaking point in some cases." This nightmare came true once again when multinational retail group Ahold admitted accounting irregularities. Standard&Poor's immediately downgraded Ahold's bonds to junk and they traded as low as 70 straight away. At press time, there was speculation that the bonds might fall even further to trade as distressed credits.
  • South Korea
  • Spain
  • Risk management
  • Investment Banking
  • Hungarian privatization has helped place the economy among the best emerging-market performers of the 1990s. However, questions about the transparency of deals reappeared this year.
  • People in finance aren't normally shy about winning prizes. But the inaugural Asian Brokers Awards dinner had many ducking for cover - such was the fear of being nominated for and winning gongs like the "Ted Turner Award for humility" - for the region's most arrogant fund manager - and the "Leaving Las Vegas Award" - for the broker most famed for being slumped over bars nursing double scotches in the name of strengthening client relationships.
  • Is Kenneth Rogoff making an about-turn? The IMF research head's latest paper seems to back the views of fund critics.
  • Fixed-income investing isn't an area normally associated with soul searching. can still wrongfoot us all, though. The Pimco managing director's March Investment Outlook takes a moment out from analysis of the bond markets to conduct a pensive and very personal meditation on religion, war and the author's mortality, with the help of a few carefully chosen quotations.
  • Roberto Junguito, finance minister of Colombia, had a good Inter-American Development Bank meeting in Milan. He secured hefty funding commitments from the IADB as well as from Andean development bank, Corporación Andina de Fomento. To top it off, he received the Euromoney award for economic achievement in the Andes from the president of CAF, Enrique García who says Hunguito is a determined negotiator. García should know: CAF has just promised Colombia $3.5 billion. Hunguito modestly shared his award with his young team. "When I was minister of finance in the 1980s, I worked with their parents," he joked.
  • "Guess who I had in the back of my cab," is a refrain familiar to Londoners. "Not an investment banker," might now be an appropriate response.
  • Pension fund trustees can find equity derivatives confusing. At the NAPF conference in Edinburgh last month a baffled but brave trustee stood up to ask how he could cut through the "black art and mumbo jumbo" of these instruments.
  • Mexico was the first emerging-market issuer to include collective action clauses in an SEC-registered bond. That gave it a one-off opportunity to write its own documentation unburdened by precedent. Now the CAC route looks like the clear way forward.
  • With falling GDP per capita and minuscule foreign direct investment, things could be going better in Uzbekistan. One positive development, though, is the corporate bond market.
  • With a large trade debt outstanding from Iraq and lucrative oil contracts there hanging fire, Russia’s reluctance to toe the US line is understandable, especially in the context of a broader desire to re-establish regional ties.
  • The removal of old-guard managers from Egypt's state banks, proposals to clean up NPLs and new capital rules are shaping up the banks for a sell-off.
  • Serbia
  • Pfandbrief issuers are increasingly abandoning jumbos in favour of more traditional smaller issues taken to market as strategic need demands.
  • Many banks are reluctant to spell out how they make money in derivatives but SG's black box is even blacker than most. "It's very difficult for us to understand where it gets its money from," admits Eric Hazart, an analyst at Exane in Paris.
  • Like an old pair of slippers, retail banking is the division Société Générale knows it can rely on for a bit of comfort. When times are bad - as they have been lately - retail revenues, which comprise 60% of the group's total, provide a welcome buffer. "For French banks in general and SocGen in particular, retail banking really is a cash cow," says Guillaume Tiberghien, an analyst at Fox-Pitt, Kelton.
  • With foreign companies eager to sew up deals in China’s mega market and Chinese corporates keen to expand abroad, M&A bankers expect growing business in the People’s Republic.
  • It all sounds worryingly familiar. Mutual funds are experiencing record inflows, issuance is at record highs, prices of the securities concerned seem to be immune to bad news, and the investment banking divisions covering these popular products are going gangbusters.
  • The hope is that the EBRD’s annual meeting in Tashkent in May will give a much-needed lift to Uzbekistan’s ailing economy. But relations with multilaterals have never been worse, and the country’s human rights record raises questions about why the meeting is taking place there at all.
  • Commodities are on a roll as equities stumble and bonds reach their peak. But can commodity-based investments offer value for the long term as well as offering temporary relief to embattled portfolios?