Euromoney, is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024
Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

April 2008

all page content

all page content

Main body page content

LATEST ARTICLES

  • The highly respected Gavin Wells has left Citi after a 14-year stint at the bank. Wells originally joined as part of the bank’s experiment of recruiting former British army officers; he successfully marched through the ranks to ultimately head the bank’s e-commerce trading force. Following Wells’s decision to stand down, Citi has decided to use its existing forces and deploy them in more distinctly divided specialist areas.
  • Citi has apparently raided rival UBS and captured its global banks marketing team. Neither bank was able to comment at the time of writing but it is believed Citi hires include Bruno Widmer and at least five of his Zurich team.
  • Highly levered funds are always at the mercy of credit and liquidity suppliers. So be wary of those active in markets where liquidity can rapidly dry up, says Neil Wilson.
  • Deutsche Bank is believed to have suspended two of its Italian FX sales team because of procedural irregularities. Sources say that Riccardo d’Antonio, the bank’s head of Italian FX sales based in London, and his subordinate, Santo Caristo, who was based in Milan, were told of the action in early March. Their suspension is believed to relate to a small loss incurred by one of their clients, which led to an abuse of the bank’s booking procedures. Deutsche and the Financial Services Authority, which held d’Antonio’s registration, decline to comment.
  • A merger of BNP Paribas and Société Générale would be difficult to fund and to execute.
  • The covered bond market has not behaved in the way investors had been led to believe it would. It’s time to realize that covered bonds are not the golden child of the bond family.
  • Will the long-awaited recovery in the German real estate market be stopped in its tracks by turmoil in the debt markets? Louise Bowman reports.
  • Dimitri Psyllidis, co-head of EMEA FICC at Merrill Lynch has left the firm. David Gu was announced as sole head of EMEA FICC.
  • ECBC plenary meeting divided about how to handle market making.
  • Awash with cash that far exceeds domestic investment opportunities, Australia’s pension funds are continuing to expand their holdings in global and alternative assets, developing an expertise paralleled by that of the country’s banks. Chris Wright reports.
  • We are engulfed in a tornado of gloom. Wall Street titans and employees alike have seen their share options decimated, pension pots plummet and everyone feels insecure about job security. I’m hearing that investment banks need to cut 20% of their employees to accommodate lower profitability.
  • Spanish bank BBVA has announced plans to open a new platform in Brazil, following the sale of its 5.01% stake in Banco Bradesco.
  • With the public markets all but closed, issuers have turned to private and structured products to fulfil their requirements. Those who have maintained the best relationships with their investors and dealers have proved best able to ride out the turmoil, printing deals at half their CDS levels or better. Infrequent borrowers and those who have taken cheap funding for granted are in for a shock.
  • Banco Santander in Brazil has named Banco Real chairman Fabio Barbosa as the new head of the Spanish bank’s businesses in Brazil. Barbosa will take up this new role when Banco Real is legally separated from ABN Amro. Gabriel Jaramillo, the current country head of Santander in Brazil, will "provide advice and support to the office of the chairman of Santander". Jaramillo’s post will be filled temporarily by Jose Paiva until Barbosa takes over the combined operations.
  • Brazil’s Banco Itaú plans to open a Tokyo branch of its securities subsidiary, Itaú Securities, in the autumn. The subsidiary will become the first securities firm from the Bric countries (Brazil, Russia, India, China) to set up an operating base in Japan. The new branch will sell Brazilian stocks, bonds and other financial products to institutional investors.
  • Rating agency considers wider implications of CDO methodology change.
  • Last month two interdealer brokers unveiled their participation as official venues for the trading of Dutch bonds.
  • Despite widespread investor puts of pre-crunch extendible notes, the sector is experiencing a relatively good 2008, with investors calling the shots.
  • It’s pitiful trying to blame short sellers for the woes of the financial system.
  • Chatting with Ajith Cabraal, the amiable governor of the Central Bank of Sri Lanka, in his lofty eyrie above Colombo, one could be forgiven for thinking that he’s presiding over some approximation of a Switzerland-sur-tropique. Although his Indian Ocean homeland is besieged by a civil war escalated by an ambitious president with an advancing personality cult, "things aren’t nearly as bad as they might appear on CNN," Cabraal says.
  • March 7
  • The Fed is finding innovative ways to fund US financial institutions to combat the systemic risk that has done for Bear Stearns.
  • All market participants must still confront the reality of near total market failure across the debt and money markets, an inability to sell even quality assets for cash or to borrow against them and a complete loss of faith between financial institutions. More public money is surely coming, but how can it repair this?
  • Rapid growth can mean rising inflation, as Vietnam is discovering.
  • "I’ve reluctantly discarded the notion of my continuing to manage the portfolio after my death – abandoning my hope to give new meaning to the term ‘thinking outside the box’"
  • "It is an inauspicious year because the rat year brings about slower world economies where unemployment, money matters and environment matters would be the key issues. There would be plenty of natural disasters/diseases which could affect the world."
  • "Low sovereign default rate reflects buoyant global market conditions."
  • "It is very hard to distinguish a catastrophe CDO from any other type of CDO in this market – aren’t all CDOs catastrophes?"
  • Cross-border partnerships are tricky at the best of times. Each side tends to be wary of the other. Often cultural differences come to the fore. And then there’s the internal politics. So the failure of Barclays and Absa, the South African bank in which Barclays holds a 60% stake, to reach agreement on the sale of the UK bank’s other African businesses will only reinforce the impression that the relationship is tense.
  • Even given its tumultuous history, the past few months have been especially volatile in Pakistan, highlighted by the assassination of Benazir Bhutto. From a financial perspective, the country faces several problems, in particular rising inflation. Shamshad Akhtar, governor of the State Bank of Pakistan, tells Sudip Roy why, despite this, she is confident about the nation’s medium-term prospects.
  • They are China’s emerging rich: hundreds of thousands of entrepreneurs making money hand over fist. They want that money to work hard for them. And they are the target market for a new domestic industry: private banking. Chris Wright reports.
  • Unless Japan gets more involved in international capital markets, perhaps through a sovereign wealth fund, it is likely to become increasingly irrelevant in Asian finance.
  • Icap’s launch of an insurance derivatives and securities broking joint venture will promote liquidity and transparency in this fast-growing niche. If new sources of capital prove resilient to soft markets, insurers may see them as a new strategic challenge.
  • Brian Stevenson is the head of the new global transaction services division at RBS, following its acquisition of ABN Amro’s business. In his first interview since he took the job, he talks to Laurence Neville about separation, integration and what the future holds.
  • While investment bankers in the west expect a difficult 2008, counterparts in Asia cite the successful closing of buyouts, bond issuances and IPOs during the market turmoil as proof of the region’s opportunities. Lawrence White reports.
  • Commodity prices continue to break records, defying the spectre of slowing growth in the US and the performance of other asset classes. With some commentators attributing the price rises to the billions being poured in by investors, is it boom or bubble? Peter Koh reports.
  • The credit crunch is inevitably limiting banks’ ability to offer supply chain finance services. But demand for these is set to keep growing, so the broader effect might be consolidation of the business into the hands of a few truly global banks. Laurence Neville reports.
  • The stellar returns from reinsurance that lured in hedge funds in the wake of the 2005 hurricanes have dissipated. But this won’t deter managers with long-term strategic plans, reports Helen Avery.
  • As financial stress grows, economies weaken and companies see risks looming at every turn, insurers offer themselves up as strategic risk advisers. They must prove their risk engineering skills, upgrade systems, overhaul archaic industry practices and adapt to capital market investors seeking insurance exposure. Euromoney polls 255 leading corporations to fi nd which insurers and brokers are doing the best job.
  • More assets are yet to be hit in the credit crisis and, as leverage continues to fall out of play, liquidity will keep on drying up. Equity prices are bound to fall still further too.
  • Much is made of Ben Bernanke’s academic work on the Great Depression. However, the Fed chairman seems to making policy with one eye on the recent Japanese debt deflation cycle.
  • Shinsei Bank is to sell the headquarters building it inherited from its previous incarnation, Long-Term Credit Bank of Japan, in order to avoid booking a net loss for a second consecutive fiscal year. The ¥118 billion ($1.18 billion) sale is to a real estate fund managed by Morgan Stanley, and will help to offset the total of ¥32.5 billion of sub-prime related losses announced by the bank so far. The bank says it will rent the space for the next three years while it searches for a more cost-efficient base. This continues a recent trend of banks selling their Tokyo headquarters, with Resona announcing on March 11 that it is seeking a buyer for its Otemachi base. Meanwhile market participants wonder what Morgan Stanley knows about Tokyo property that they don’t: in addition to its participation in the Shinsei deal, the US bank bought Citi’s Shinagawa HQ in February for just over $1 billion.
  • Despite avoiding the worst effects of the global credit crunch, Kazakh banks will need to undertake reforms in the coming months if they are to regain trust and confidence, concludes Standard & Poor’s credit analyst Ekaterina Trofimova. She says: "The Kazakh banking system has reached a decisive point in its development, with the continuing turbulence highlighting the need for a deep transformation of business practices, strategies and regulation."
  • Investors looking for attractive long-term return potential could do worse than look at bank stocks in southeastern Europe. That’s the conclusion of a recent report by Günther Hohberger and Gernot Jarny, banking analysts at Erste Bank in Vienna. Entitled South east European Banks: Boom or bust? the report looked at the banking sectors in Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Montenegro, Romania and Serbia, and concluded that overall growth rates for banks in the emerging economies of southeastern Europe versus the more developed markets in central Europe will be higher for the next decade at least.
  • The financing of Nigerian energy company Oando’s acquisition of a 49.8% stake in two offshore oil blocks owned by Royal Dutch Shell was due to close at the end of March, according to Wale Tinubu, the company’s group chief executive.
  • As part of plans to boost Moscow’s position as an international financial centre, the Federal Financial Markets Service has announced plans to exempt investment in securities from taxation. The proposal forms part of a strategy document covering the period to 2012. If approved, the FFMS proposal will come into force in 2009.
  • The Dubai Multi Commodity Centre Authority, which is owned by the Dubai government, is buying a 4.99% stake in Shariah Capital. The two companies are also creating a joint-venture investment company that will develop Shariah-compliant commodity-linked investment products.
  • Moody’s Investors Service has assigned a Baa1 country ceiling for long-term foreign currency debt and Ba2 issuer ratings for the Republic of Montenegro. All ratings carry a stable outlook. "Montenegro’s ratings reflect the new country’s growing integration with the European Union and the financial stability afforded by the use of the euro as the official currency," says Kenneth Orchard, a Moody’s senior analyst. "Among Montenegro’s main rating constraints are its lack of administrative capacity and relatively underdeveloped judicial institutions."
  • Credit Suisse and Gulf Capital, one of the region’s biggest private equity firms, have announced an agreement in principle to launch a strategic alliance focused on investing in the Gulf and Middle Eastern economies. Karim El Solh, chief executive at Gulf Capital, says: "Of particular help to us will be Credit Suisse’s expertise in leveraged buyouts, its global footprint, its financial strength and award-winning debt and equity franchises in the Middle East."
  • Its strength in emerging markets makes it a serious player in FX.
  • Market participants say that the borrowing binge by Russian banks and corporates in recent years could come back to haunt them, given the much tighter credit market conditions in 2008.
  • If Japan’s property bubble has already expanded and popped, China’s might be close to bursting.
  • Measures to boost the competitiveness of Brazil’s exporters might well be fruitless.
  • Far from solving BAA’s financial problems, the CAA’s regulatory review will make life for it even worse.
  • Despite the volume of high-profile mergers and acquisitions between exchanges, the number of trading venues in the US is an astonishing 55 and rising. According to industry consultant Larry Tabb: "The US financial markets are not just in flux; they are in full-out, no holds-barred, free-for-all radical change." Moreover, it is a trend that he believes is likely to be exported.
  • "The private equity party is over," says Kevin Dolan, chief executive of $5 billion fund of hedge funds La Fayette Investment Management in London. The credit crunch has made it difficult for private equity firms to take companies private, and that is good news for activist hedge funds, he claims.
  • The European Central Bank’s term repo window shows no signs of diminished popularity. With the European mortgage-backed market firmly shut, the central bank has continued to back securitization technology and extend liquidity for triple A-rated securities issued by Europe’s banks.
  • $20,500,000,000 The value of equity capital raisings postponed or withdrawn so far in 2008, according to Dealogic. The value of deals pulled is more than 10 times as much as the $1.9 billion over the same period in 2007 and is the highest ever on record.
  • Local-currency debt markets in emerging economies are beginning to suffer from the credit crisis and broader global slowdown.
  • With big declines and huge daily swings, stock markets around the world looked even less welcoming to new issuers in March than they had for much of the year, during which time companies fearful of a cold reception had withdrawn or postponed more than $20.5 billion-worth of deals.