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

Only four years ago, the kind of research familiar to more developed capital markets was almost unknown in the Middle East. However, the quality of information available to investors is improving rapidly as global banks establish footholds. But Saudi Arabia, the region’s biggest market, has been left behind. Dominic O’Neill reports.

Financial sponsors turn attention to the region.

Demand for commodities and improving political and fiscal climates lead rapid growth across sub-Sahara region.

Investment-grade issuers balk at increased costs.

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.

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.

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.

Goldman Sachs has appointed Chris Barter and David Schwimmer as joint CEOs of its Moscow office. Barter was previously co-head of the European financial institutions group in London at the bank. He will relocate to Moscow by the end of the summer. Schwimmer was head of investment banking for Russia and central and eastern Europe. He is already based in Moscow. Goldman received its first Russian securities brokerage licence last year and, according to observers, is hiring aggressively across all products

Dresdner Kleinwort has become a victim of its own success in central and eastern Europe, says a source at the bank explaining why the firm has been hit by a series of departures in recent months.

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

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

Emerging market debt has held up well in the face of a nascent credit crunch in developed markets.

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

Environmental, social and governance issues are increasingly prominent with regard to investment management in emerging markets. However, does taking a principled approach to portfolio construction offer the opportunity for greater returns, or leave investors with one hand tied behind their backs?

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.

"Having been a customer of your bank for more than 10 years, I find it difficult to describe any of you services as excellent. Another good example of SBM’s excellence in customer care I believe is the underground parking at your Vacoas branch. The parking used to be available for customers. However since a few months back customers no longer have access to it, as it seems that it is reserved for the exclusive use of the branch employees!! So much for customer sovereignty"

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.

Bank of America has carried out a "functional alignment" of its FX business to drive what it says is greater collaboration across its global rates, currencies and commodities businesses. These are managed overall by Richie Prager. As part of the alignment, Gerhard Seebacher has been named head of trading for all GRCC products. Chris Mandell continues as head of currencies and local markets and has also been named head of sales for GRCC, a newly created position.

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.

The 2007 Italian national budget law outlines a new framework for the country’s regional healthcare administrations. The law’s purpose is to force each region with a large deficit in its healthcare funding to formulate and implement a recovery plan. "The national budget for 2007 represents a positive step forward in finalizing a set of rules for Italian healthcare," says Simone Zampa, senior analyst at Moody’s. "It aims to make regions more responsible and more accountable."

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.

283,200,000,000 the volume of share buyback programmes globally so far this year. Share buybacks are up 19% compared with 2006 year-to-date and are at their highest on record, according to Dealogic. Retail has been the most active sector, with $56.7 billion via 14 deals, up from $3.4 billion via 12 deals in 2006 year-to-date. Finance follows with a volume of $45.9 billion via 27 deals and insurance with $25.9 billion via 16 deals.

Latin American mutual funds are the best performers in the world year-to-date according to fund tracker Morningstar,which reports rises of 32.26% for the first half of 2007.

Euromoney’s latest survey of the leading banks in structured credit shows a clear top tier of five investment banks. They say that providing fresh ideas to clients is what keeps them at the head of the pack.

Peru priced a NS4.75 billion ($1.5 billion) 30-year local currency benchmark bond on July 20, as it raised funds to repay Paris Club debt ahead of schedule. Peru sold the sol-denominated bonds, due in 2037, to yield 6.9% in an offer led by Citi. The Peruvian government has approved a sale of up to $2.58 billion-worth of bonds for Paris Club debt, indicating the possibility of further issuance.

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

The recent contraction of liquidity has changed the landscape.

This month’s plans for a Latin American regional bank hit the rocks as Brazil raised objections to president Hugo Chávez’s plans for the bank.

Argentina appointed Miguel Peirano as its new economic minister after Felisa Miceli resigned on July 16

Historically, when the US sneezes, Latin America catches a cold, and Mexico comes down with hypothermia. So what on earth is going on in the market for mortgage-backed securities?

The number of wealthy individuals in Latin America is growing fast on the back of high commodity prices, buoyant equity markets and foreign interest in acquisitions and IPOs. Private banks are adapting quickly, developing new products to attract investors intent on diversifying from their traditional reliance on fixed income and offshore investment. Jason Mitchell reports.

The investor revolt in the leveraged loan market during June and July was long overdue and much needed. But have the excesses of the past few years left the LBO market teetering on the precipice of a far more serious credit squeeze? Louise Bowman reports.

Michael Reich, a Harvard MBA student, has come up with a way of tapping into investment talent to run a fund. Reich has set up a website, www.theupdown.com, where keen investors, either students or professionals, can run virtual portfolios, and submit investment research in a competitive environment.

There is a lot going on in the swaps industry right now.

What exactly is causing weakness in the credit markets? The obvious answer is contagion from the sub-prime crisis – the fear is that there will be massive losses from the original securitizations of these poor-quality loans and the CDOs backed by these securitizations.

Bond markets are still too sanguine about inflation prospects. But present global growth rates will inevitably drain liquidity from the financial system.

Dear Sir,

It has been the ‘everybody has won and all must have prizes’ market so far in 2007. That phrase was uttered by a (fictional) Dodo. Now it is time for Darwinism to reassert itself.

John Cummings is the new treasurer of Royal Bank of Scotland. He replaces Brian Crowe, who moved into a senior management role in the corporate bank several years ago. Ron Huggett, a well-known figure in UK bank financing circles, continues as capital-raising director. Continuing with the Scottish financial theme, Andy Townsend has replaced Cummings as treasurer at Standard Life.

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.

UBS has merged its Scandinavian and UK debt capital market coverage teams for the corporate and public sector. The team is headed jointly by Allegra Berman and Mahnaz Safa. Cecilia Hulten, who previously looked after Scandinavian coverage, is leaving the firm to pursue other interests after five years. The integration does not include FIG, which was already run on a pan-European basis.

Independence day for Walsh: The WeeklyFiX

The UK Treasury has presented its proposals for a covered bonds legislative framework. The UK’s unregulated, structured covered bond market is the largest in the world of its type but suffers alongside regulated markets such as those in Spain and France through not being compliant with the Ucits directive. The new proposals, when implemented, will do away with this disparity, halving the risk weighting of UK covered bonds to 5%.

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.

Are Pfandbrief issuers out of touch with modern rating methods?

Row over charges for trades routed through execution system.

Albania has finally secured a credit rating in a move that the authorities in Tirana hope will help boost the Balkan republic’s investment profile with international investors. Moody’s Investors Service assigned a Ba1 country ceiling for foreign-currency bonds and a B1 issuer rating to the government. Moody’s also awarded a B2 foreign-currency bank deposit ceiling along with a local-currency country ceiling of A3 and a local-currency bank deposit ceiling of Baa1. All ratings carry a stable outlook.

Bank of America has appointed Derek Dillon and Doug Baird as co-heads of global equity capital markets, replacing Ciaran O’Kelly, who was named co-head of global equities in June, a role he shares with Peter Forlenza. Dillon and Baird are both based in New York and report to Forlenza and O’Kelly as well as Bill White, the global head of capital markets.

London Stock Exchange takes on Euronext with launch of dedicated market.

Structured product providers were last month encouraged to conduct "know your distributor" approval processes in order to ensure that only appropriate distributors be allowed to pass on complex derivatives-based investment products to the retail and high-net-worth markets.

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.

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.

Asset management research and advisory firm Carbon360 says assets under administration for hedge funds globally are $3.4 trillion. Single-manager assets under administration are $2.72 trillion, the firm claims. The figures were reported in Carbon360’s 2007 fund administration fact book, which analyses 74 hedge fund administrators.

In July, Credit Suisse announced that it had finally been allowed back into investment banking in India by local regulator Securities and Exchange Board of India. The new merchant banking licence permits Credit Suisse to undertake securities underwriting and corporate finance in what has been one of Asia’s most active markets in the past two years.

Nick Evans, editor of EuroHedge, applauds the creation of a hedge fund manager working group.

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.

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.