HSBC has beefed up its DCM operation, making a number of hires – especially from Nomura.

Quinenco, the largest shareholder in Banco de Chile, and Citi have agreed a partnership in which Citi will have the rights to acquire up to 50% of the holding company that controls Banco de Chile.

UniCredit continues to expand its operations in central and eastern Europe, with the acquisitive Italian banking group turning its gaze towards Ukraine in July. Bank Austria Creditanstalt (BA-CA), which is responsible for UniCredit’s commercial banking activities in central and eastern Europe, has signed an agreement to buy 95% of Ukrsotsbank (USB), Ukraine’s fourth-largest bank by assets. The deal follows June’s $1.5 billion purchase of a controlling stake in Kazakhstan’s ATF Bank and the acquisition of the European Bank for Reconstruction and Development’s 10% stake in Russia’s International Moscow Bank for $229 million.

Illiquid hedge funds should stop smoothing returns, report urges.

Jim Siracusa is the new global head of DCM and securitization at Calyon. Siracusa previously worked at Dresdner Kleinwort, where he was co-head of client coverage, which included DCM origination and media, telecoms and technology coverage. In his new role he is responsible for securitization, debt principal finance and client solutions. He also covers traditional DCM, including emerging markets. He reports to Guy Laffineur, global head of fixed income.

The newly enlarged CME Group, which now also comprises former rival Chicago Board of Trade, says that its second-quarter 2007 total revenues were up 17% to $329 million and net income up 15% to $126 million on the second quarter of 2006. Commenting on the figures, CME Group chief executive Craig Donohue referred to aspects of the exchange’s growth strategy, including FXMarketSpace. In a web broadcast Donohue admitted that volumes fell off in July but that customer "onboarding" had increased and that the joint venture with Reuters remained on track to break even at some point in 2008.

Japan’s equity bounce-back has lost momentum. But there are good grounds for believing that a floor has been reached and that renewed buoyancy is around the corner.

It is not uncommon in any market for an underlying to gravitate towards certain option strikes as they near maturity. In foreign exchange, which is arguably the most sophisticated options market, it is increasingly the barrier component of exotic trades that acts as the magnet. The amount of leverage certain structures can provide results in huge buying and selling of the underlying as participants try to defend or knock out the barrier.

The sub-prime contagion has now reached as far from the USA, geographically, as it possibly can: Australia. In July Basis Capital, arguably the best-known home-grown hedge fund manager in the southern hemisphere, ran into serious trouble after defaulting on margin calls to several of its creditors. At the time of writing its survival was in the balance.

Investors will still want access to the best-run funds.

Dealers are hoping a new-look contract will finally get the European leveraged loan credit default swap market off the ground.

Every so often the insurance-linked securities (ILS) sector rears its head and FIG bankers get excited that they will have a rich vein of new assets to bring to the capital markets. Around two years ago the great hope was that value in force (VIF) securitizations from UK insurance companies would take off following a couple of landmark transactions and regulatory encouragement from the Financial Services Authority, but activity there has slowed to a near halt. Once again there are now signs that investment banks and insurance brokers are ramping up their product capabilities amid a pick-up of deal flow in the past year.

After many years during which change was merely incremental, electronic trading in debt markets is about to be fundamentally transformed. New entrants and platforms have emerged or are mooted, and fresh partnerships are being considered as incumbents find their value proposition under pressure. Dealers and clients will face a completely new way of debt trading. By Alex Chambers.

ABN Amro is embroiled in its own M&A battle but that has not stopped the bank’s investment banking arm closing some landmark deals for clients.

If, as expected, US regulator the National Futures Association implements a proposal it has sent out to its 43 forex dealer members (FDMs), the result will be that many firms will have to attract fresh funding or close down.

Azerbaijan is set to become the latest sovereign from emerging Europe to tap the international bond markets, with a probable $300 million, five-year transaction slated for launch in September or October, market conditions permitting. The Caucasian republic has mandated Citi and Deutsche Bank to lead manage its debut transaction, which has been in the offing for several years. Gunduz Mammadov, chairman of the State Committee for Securities, says that the proceeds from the planned issue have been earmarked for general funding purposes. Deutsche Bank beat off competition from 11 other banks to book its berth on the landmark transaction and Citi was a shoo-in for the deal, having been a ratings adviser since 2005. Azerbaijan has a Ba1 issuer rating from Moody’s Investors Service and a BB+ grading from Fitch Ratings. The outlook on both ratings is stable.

Asset manager New Star has seen significant growth in its alternatives business. In the second half of 2006, the firm raised more than $550 million for two hedge funds. In May this year, it launched a European opportunities hedge fund, which has now about $100 million in assets under management. In the last quarter of this year, New Star will be launching a property hedge fund. Robin White, of Rock Capital, is joining to head the fund.

Downgrading tranches and revising criteria will not convince the market that the rating agencies are on top of the sub-prime mortgage crisis.

Investment-grade issuers balk at increased costs.

When Stan O’Neal spoke at the Euromoney Forum in London in late June, concerns about the fallout from the sub-prime correction were at their height. In a wide-ranging interview with Euromoney’s editor, Clive Horwood, Merrill Lynch’s chairman and chief executive discussed the market’s reaction to sub-prime, and whether or not the contagion would spread.

Country is now a net creditor, paying off external debts and developing local markets.

Commerzbank has hired Julien Mareschal as its new head of ABS trading and David Hoffman as a senior trader on the ABS team. Mareschal ran ABS trading at BNP Paribas, where he was responsible for ABS/MBS and cash CDO trading. Hoffman joins the team as senior trader with a special focus on developing Commerzbank’s ABS derivatives business.

Dear Sir,

Investor appetite for exposure to the Russian banking sector shows no sign of weakening, with a series of transactions concluded in recent weeks. Headline-grabbing deals included foreign purchases of stock in MDM Bank and Rosbank. Domestic consolidation also continues, with the sale of LipetskComBank to Bank Zenit the latest example.

Financial sponsors turn attention to the region.

Investment house issuance on private electronic markets relieves them of regulatory burdens and speeds up funding. But poor liquidity remains a problem.

But there are signs that the supply of suitable targets is contracting.

Private equity and hybrids are main planks of growth strategy aimed at taking merged company to third place.

Investment banking has long been a demanding profession. Bankers have been accustomed to always-on cell phones, the ubiquitous BlackBerry and late-night meetings. Spare a thought, however, for one banker caught between a call from the boss and a call of nature.

Like most Philippine banks, Banco De Oro has enjoyed a re-rating as the fortunes of the local market have improved. With the shares now at a price to book ratio of about 2.8 and on a prospective P/E ratio of 18, even CEO Nestor Tan thinks the bank, like the stock market, is fully valued for now.