April 2007
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LATEST ARTICLES
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The financial supply chain is an important concept for CFOs and treasurers to understand. However, it is one that they might be unfamiliar with, and certainly it is unlikely to be at the top of their agenda.
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Appointment shows growing importance of Asia for business and for career growth.
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Goldman Sachs has been fined what some might call a rather lenient amount, $2 million, for selling short an IPO pre-sale.
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A wobble in China, a rapid sell-off in global equities, a flight to the safe haven of government bonds and the unwinding of carry trades were all evidence of a change in investors’ risk appetite starting in February and going through into March. The moves showed many things, including the interdependence not only of various currencies but also different asset classes. For a brief period, the path of global equity markets seemed to be dictated by what was going on in an intraday basis in spot sterling/yen.
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There was a flurry of activity in the FX employment market in March as those market participants who got bonuses banked their cheques.
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The influence of Basle II is starting to be felt in UK mortgage lenders’ funding plans.
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The launch of LCDX and release of Isda documentation in Europe could revolutionize risk transfer.
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Structured covered bond may be repeated by other German issuers.
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But move would boost liquidity when volumes are falling.
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SG CIB takes its cue from collateralized loan obligation securitization.
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Let Hoteloc be a warning on the risks in short tail period.
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In December 2006, Mizuho unveiled Alexander Rekeda, Doug Munson, Jim Shepard, Bill Budd and several others as part of its new structured credit and debt capital markets team in New York. The bankers had formerly worked at Calyon, covering various areas of structured finance and debt.
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Are present market conditions a threat or opportunity for permanent capital vehicles in structured finance?
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According to Highland Capital, there are at least 13 new managers poised to bring their first CLO deals in Europe this year. Twenty-two new managers joined the market last year, doubling the size of the market in just 12 months. If the market keeps growing at this pace there will inevitably be some form of consolidation since competition for assets is already acute. Spanish savings bank Caja Madrid is currently marketing its first self-managed CLO, Neptuno. The US market continues to boom – 16 deals a month closed last year and so far in 2007 17 have been announced and 44 are ramping.
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Hysterical headlines and wild index swings have disguised what is really going on in the world of home equity loan securitization.
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Alan Patterson, head of the financial institutions group at Citi, is moving on from origination to a new role of capital management advisory. He will report to Valentin Ehmer, who runs the fixed income and derivatives product group.
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Revenues at Instinet’s Asian business grew by an impressive 50% last year, double the growth in regional trading volumes. The electronic broker has ambitious plans to expand throughout the region this year, opening an office in Singapore, becoming the first remote member of the Australian Stock Exchange, and establishing a partnership in India to offer electronic direct market access. However, it is in its new adopted home of Japan that the broker is making its boldest moves.
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Dubai’s investment agencies might not have the scale of their counterparts from other parts of the Middle East but they are becoming voracious buyers of assets. Who are they and what are their plans? Sudip Roy and Simon Brady profile the people and strategies behind Dubai International Capital and Istithmar as they join the ranks of the world’s most powerful investors.
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Investors worry about lack of outside experience, lack of star quality and the temporary prefix.
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Recent equity market upheavals are presenting new challenges and opportunities for volatility and correlation traders. With the downturn in markets that kicked off at the end of February came a massive jump in short-dated implied volatility. The Chicago Board Option Exchange’s Vix index, which measures the implied volatility of S&P 500 index options and represents the market’s expectations of volatility over the next 30 days, jumped almost 80%, increasing from about 10% to 18%. Volatility in other major equity markets, such as the Eurostoxx, also jumped, as did equity market correlation. The 30-day realized correlation level on the Eurostoxx 50 doubled from just under 20% to 40%. Immediately before the downturn, volatility and correlation had been trading at historically low levels.
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"He’d been my client for 30 years, and he invited me down to see him at his home in Florida. When I got there he had assembled his entire family – wife, children, grandkids, the lot. I sat down. He handed me a letter and asked me to read it out loud to the room. It said simply: ‘Dear Bob, In the event that I should pass away, please tell my wife exactly what she needs to do, and ensure that she does it’"
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"Japan’s companies had better make use of the advantage of being in the Asian region. The urgent task for them is to promote localization in Asia, in order to secure from European and US firms the fruits that this prospering economy brings forth"
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The regulatory framework of Europe’s single payments system is effectively in place. But the details of implementation by banks and corporates are still a matter of debate.
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The recent sell-off in global stock markets will not be a repeat of last May – a short correction leading to new highs. There is now more to worry about in the global economy and the liquidity cycle is at a turning point.
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Hats off to the financial institutions team at a US investment bank who made a highly amusing Bollywood movie using an online service.
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In recent years success in the financial services industry has been predicated on two main strategies: first, taking on significant if not massive proprietary risk, a strategy as old as the hills; second, underwriting risk positions and using the capital markets to exit. This is an even more well-established feature of the most successful investment banking operations.
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The excitement of the inaugural Euromoney US covered bond conference clearly got to some delegates in New York last month. Not least Dr Louis Hagan, executive director of the VdP – otherwise known as the Association of German Pfandbrief Banks.
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The bizarre decision by Moody’s to grant Aaa status to a rag-tag assortment of obscure Nordic credits has put the raters in the spotlight. The relationship between the rating agencies and the big investment banks should also come under scrutiny.
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The good times might be back in Asia’s markets for foreign investment banks. Alas, though, the feel-good factor does not appear to have reached French bank BNP Paribas.
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The Euromoney investment banking champions league game table is taking shape, and after a bloody back and forth at the top, Citi has put daylight between itself and its nearest competitor, BNP Paribas.
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Relics of a troubled past are soon going to be put behind Mexican glass company Vitro, which has just completed a total debt refinancing. Chloe Hayward speaks to CFO Alvaro Rodríguez about his company’s rocky past and shiny future.
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"Actually, I just pitched one of those today," says a debt capital markets banker when asked whether he detected developing interest among emerging market clients in toggle notes.
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With growth surging ahead and inflation high, some analysts have voiced their concerns that the Egyptian economy is getting ahead of itself.
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ABN merger may give global scale, but at what cost to the businesses that have driven the UK bank forward?
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The equities business at leading investment banks is booming, according to a report from the Boston Consulting Group.
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Abu Dhabi investment vehicle builds global partnerships.
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The sub-prime mortgage crisis in the US will feed through to mortgage markets elsewhere as share prices plummet and borrowing costs soar.
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The foundation on which Ferrovial built its acquisition of BAA was its securitization exit. But nearly a year after the buyout, the refinancing is nowhere to be seen. Louise Bowman finds out what’s happening.
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Success in investment banking has always depended on relationships and connections, as well as expertise.
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Asian investors still love property, despite the tight spreads.
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More real estate companies have come to the market in the past two months than in the past two years.
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Havens Advisors’ hedge funds focus on merger arbitrage, high-yield bonds and distressed debt. Helen Avery speaks to founder Nancy Havens about the opportunities in high-yield.
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Bankers’ growing interest in environment-friendly financial opportunities can only be a good thing – whatever their motivation.
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Big hires, new local offices and investment in a specialist hedge fund show the US firm is getting serious about the emerging markets.
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Long overdue fiscal prudence and a rising economic tide have presented the Philippines with its best chance in decades for sustainable economic growth. Chris Leahy reports.
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Latin American markets have proved to be a fine investment in recent years, although not, it seems, for Mexican private pension fund managers. Pension funds, afores as they are locally known, are coming under increasing scrutiny for failing to provide the kind of stellar returns posted in Chile and Peru, despite new freedoms to diversify investments.
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Bank Negara Malaysia, the central bank, announced in March a further relaxation of foreign exchange regulations designed to normalize trading in the Malaysian ringgit.
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The inflation-linked bond market has grown dramatically in size and sophistication. What is driving its expansion, and just how far can the market develop?
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As the deal between US-based Lyondell Chemical and Saudi Arabia’s National Titanium Dioxide (Cristal) closes so Saudi Arabian merger and acquisition activity looks set to increase further, and to cover more types of business, in 2007.
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With gross public debt more than 170% of GDP and domestic investors increasingly diversifying overseas, the country is keen to attract foreign investors, even as it struggles to reduce government bond issuance and stave off roll-over risk. Hiroshi Watanabe, Japan’s vice-minister of finance for international affairs, speaks to Peter Lee about Japan’s funding policy and broader economic prospects.
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According to a survey by Tiger 21, a US group for high net-worth investors, the wealthy wouldn’t have been too hard hit by the sharp slide in public equity markets last month as they had already cashed out and moved money to alternative investments. Tiger 21’s 115 members, who have $7 billion in assets, reduced their public equity exposure in 2006 by 30% in anticipation of a correction. They doubled their exposure to alternative assets to 9.5% over the year.
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JPMorgan has overtaken Goldman Sachs as the largest manager of hedge fund assets globally.
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Recent setbacks will not hold back the world’s second-largest economy’s growing globalization.
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Capitalizing on the surge of private equity funds to list on stock markets, in March Standard & Poor’s launched its S&P Listed Private Equity Index.
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Richard Price is moving from UBS to Dresdner Kleinwort to take on the role of head of equity sales, based in London. He has spent 18 years at UBS in a variety of roles including head of institutional sales for Australasia, head of pan-European equity sales North America and, most recently, head of pan-European sales into the UK.
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Asia’s debt markets have soared and spreads over US and European markets have all but disappeared. Meanwhile, risk appetite continues to rise as new products become increasingly marginal. Asia’s debt bankers have much to ponder. Chris Leahy reports.