The market for Shariah-compliant finance has grown rapidly in size and sophistication in the past few years, demanding expertise in regulation, product structuring, legal services and marketing. Nigel Dudley speaks to pioneers of the industry.

Will Cazenove's blue-blood culture and exclusive corporate clientele be under threat in its joint venture with JPMorgan? Rivals would like to think so but the two parties are aware of how crucial these features are. What's more, there's nowhere much else for top corporate customers to go. The biggest danger is that the merged firm will cater for so many blue chips in such sectors as mining that conflicts of interest might emerge.

Larger Asian companies have seen the benefits from improving their governance in investment and foreign expansion. Now smaller companies are also recognizing the advantages of compliance with international standards and starting to shine in our annual best Asian companies poll.

GE is not just a big lender. Through its diverse manufacturing and service operations the group has also built up vast experience in business processes. So it was reckoned to make sense to offer consultancy to potential clients for free in the hope that their businesses would grow on the back of that advice and that they would then turn to GE to fund that expansion.

Korea

Top bankers' talking shop the Institute of International Finance and the G-20 group of sovereign borrowers have proudly unveiled a new set of principles for orderly restructuring of sovereign debt. The Argentina fiasco underscores the urgent need for such an agreement. Unfortunately, this one was negotiated without much input from the most important groups of creditors.

Mexico

India Citigroup and General Electric pioneered the use of India's potential for providing cheap services to their global operations years before outsourcing became popular. But if their recent moves are any indication they have divergent views on the way they want to manage their businesses in the future.

www.breakingviews.com

www.breakingviews.com

The word once again in New York is that leading investment banks will have to subsume themselves in larger, commercial banking organizations or face loss of business. It's an old argument. And it's as wrong as it ever was.

Leading equity derivatives players are pitching higher yields and name diversification to CDO investors. But deals need to be conservatively modelled and attractively priced.

Dropping the First Boston name is the easy part of Credit Suisse's plan to refocus its investment banking strategy, a plan to be officially unveiled this month. It will be harder for the Swiss bank to figure what it wants CSFB to become. Some early indications about where CSFB might place its bets in response to external and internal pressures suggest it might be embarking on another arduous journey.

www.breakingviews.com

The biggest ever mutual fund scandal is staring us in the face, reckons Henry Blodget. All that is needed is for an aggressive prosecutor to capitalize on the obvious.

Macquarie Securities' Baywatch-themed relaunch party at London's exclusive rooftop bar, Coq d'Argent, received a cool reception from some guests and not just because of the un-Baywatch like winter weather. The hosts, who were more modestly dressed than most of Baywatch's former cast members such as Pamela Anderson and David Hasselhoff, had told guests to expect Australian pop diva Kylie Minogue to make an appearance later in the evening.

It's not yet clear exactly how the JPMorgan Casenove joint venture will be branded, but we hear that the two organizations are not planning to adopt an animal to spearhead their cause. They could be making a strategic error. Barclays Capital markets its Barx trading platform with a variety of dog mascots, from terriers to Jack Russells. And it has long been trendy to show that you are hawkish, bullish or bearish with the creature you use to front your operation. After all, Merrill Lynch is famed for its bull, Caja Madrid has its bear and there are scores of organizations from Bank Boston to Baring Asset Management that sport birds of prey in logos.

It's that time of year all employees look forward to - the Christmas office party, a chance to let down your hair with fellow colleagues and drink and eat your employer out of business. But it is not only the bar bill your boss could be dreading.

A prominent Hong Kong investment banker related a tale of events surrounding the recent death of an unnamed local property magnate. On learning of their father's imminent demise, his two sons rushed to the patriarch's bedside. Seeing him losing his grip on life, the siblings eyed each other, consulted and rushed their father from his hospital bed. They boarded a helicopter for Macau where the old man passed away peacefully.

When readers of Physics World recently voted for their favourite equations, it was no surprise when Clerk Maxwell's electromagnetism theory, which established the link between magnetism and electricity, topped the poll. Maxwell's 1873 classic beat strong competition from the likes of Einstein's e=mc2, and Pythagoras's a2 + b2 = c2. But the poll also sounded a word of warning for investors. Schrödinger's equation (HY = EY), which finished fifth in the poll, was devised by Erwin Schrödinger in the 1920s to explain how sub-atomic particles like electrons behave. As such, Cambridge, UK-based company quantumBEAM decided to design its radical optical communications technology around Schrödinger's work.

Russia

China's economy is humming along in top gear but its domestic securities markets remain stuck in neutral. As the central government continues to struggle with financial reform, losses mount and systemic risk increases.

Banks and exchanges are working to expand their commodity-based products to capture new opportunities that will arise from the burgeoning European carbon dioxide emissions trading scheme. The use of Isda documents is already boosting trade volumes. And banks are starting to lend against allowances as collateral.

European mezzanine finance is growing fast in absolute terms and as a proportion of the financing of individual deals. With hedge funds and CDO structurers eager for the paper there's a fear among some traditional mezzanine investors that pricing is not taking proper account of risk and that innovative structures are an unhealthy development for the market.

Investors are now content with the quality of secondary bond markets in Europe. They can transact large sizes on tight bid-offer spreads without moving prices against themselves. But is this just a bull market phenomenon?

Josh Rosenberg's hobbies, which include Ashtanga Yoga, skiing and cycling, are a good grounding for the often frenetic and fast-paced world of hedge funds.

Corporate bonds

Asian governments have been fighting a rearguard action to hold down their currencies. They have stopped external surpluses from fuelling domestic inflation. But they are at their limits.

Foreign exchange

Electronic trading

Private banking FirstRand has finally offloaded subsidiary Ansbacher Group to the approval of all involved. The sale to Qatar National Bank (QNB) of the group, which provides financial services to high-net-worth clients internationally, was completed in November, opening a door to the lucrative and expanding high-net-worth market in Qatar.

When Patrice Blanc joined Fimat in 1989 the company was an upstart, even in France, where it had been formed just three years before at the same time as French futures and options exchange Matif (Marché à Terme International de France).

From unlikely roots, US private-equity investor Lombard has deftly re-invented itself to emerge as a leading local value investor in Asia. It has some way to go before it has truly regional scope but an unconventional approach to investing has yielded impressive results to date.

Yann Gindre, one of the more colourful Eurobond origination heads in London in the 1990s, is returning to banking.

Barclays Capital has increased its staff by 30% to 7,000 in the past 18 months - and there's more to come. The objectives - more client contact and a broader product range - seem to be attainable. What's not so clear is whether increased revenues will outweigh the costs of this headlong expansion and how it will transform the firm's culture.

Equities

Pension funds welcome a new bond indexed to life expectancy which should cut the cost of matching a growing risk.

Banks are trying, with mixed success so far, to interest institutional investors in structured products based on funds of hedge funds and hedge fund indices. For institutions that have been slow to obtain approval for alternative investments, structured products offer a quick fix. But suspicion abounds.

Disclosure rules are forcing issuers to consider listing outside the EU, reports Michael Evans. Switzerland's SWX sees an opportunity to win business from its European rivalsThe Swiss Exchange (SWX) has launched its first offensive in what promises to be a long battle to snatch Eurobond business away from London and Luxembourg. Last month, representatives of the exchange visited capital markets law firms in London in a bid to convince lawyers of the benefits to non-EU issuers of switching to SWX. The SWX sales pitch is based on new rules unveiled on November 15. These make a Swiss listing relatively easy at a time when Europe's transparency and prospectus directives will impose costly reporting requirements on companies listed in the EU.