When André Perold, professor of financial management at Harvard Business School visited JP Morgan Investment Management in 1987, it was a momentous occasion for Adrian Lee, president and CIO at Lee Overlay Partners, who was then working at JPMIM.

Convertibles

CEE issues have innovated on several fronts this year. Bulgaria made Europe’s first Brady exchange, Poland revived sterling sovereign issues and Gazprom launched Russia’s biggest ever domestic corporate bond.

India

Keen to exploit the massive oil deposits found in its segment of the Caspian Sea, Kazakhstan is pushing for an end to the decade-long dispute over how to draw borders between the five countries that share its coastline.

Riba, Gharar, Murabaha, abba, Ijarah, Salam, Istina, Sukuk, Mudarabah, Musharaka, Takaful

A dispute over the funding of oil pipeline development pinpoints increasing tension between foreign investors and the Kazakh authorities that may hamper the development of offshore Caspian oil resources.

Russia’s central bank is launching a controversial new scheme aimed at creating stability and competition. Deputy central bank chairman Andrei Kozlov explains why the reforms are needed.

Few people know currency overlay - an industry always on the verge of maturing - better than Neil Record, chairman and CEO of Record Currency Management. According to Mercer Investment Consulting, the company he started was awarded the world's first currency overlay mandate in 1985, when the Water Authority Superannuation Fund asked it to implement a dollar-based hedge.

Bank reform in Russia is hampered by the dominance of the two big state-owned banks, neither of which can be speedily rationalized or sold off without disruption. So although the central bank is now intent on regulatory activism it is seeking to enable competition rather than enforce it.

Bond performance

Few capital markets participants will be sorry to see the back of 2002. Fear dominated the year: fear of more terrorist attacks, fear of the consequences of a war against Iraq, fear of more corporate scandals, fear of losing yet more money, fear of losing one's job, fear of going to jail.

Lehman Brothers' trials and tribulations with its wayward chef continue (see Euromoney, November 2002).

E-finance

Indonesia

If the role of a banking system is to finance corporates through the bad times as well as the good, the German system is failing. At least that's what the recent decision by the Federal government to establish a Mittelstand bank strongly suggests.

Few if any currency managers attempt to forecast precise exchange rates. The trick is to predict directional moves. Different managers work to different time horizons but, broadly speaking, currency management can be separated into two categories: a technicals-based approach and one that looks to fundamentals.

With trading costs bearing down on them, UK fund managers are tentatively exploring the savings offered by alternative trading venues.

Citibank opened its first retail branch in Moscow in November as Russia's leading commercial banks begin to slug it out for Russia's retail banking business.

The volume and sophistication of Poland’s debt strategy last year made it the golden mandate for emerging-market debt teams. And they’ll be chasing Poland hard in 2003. But could its public debt prove too large even for this masterful finance ministry to handle?

"I wish my last year had been in better times," sighs Albrecht Schmidt, soon-to-be ex-CEO of HypoVereinsbank, over lunch in a London restaurant. "There's still so much to do." Officially Schmidt is still CEO until January - the changeover was bought forward from May to pacify investors - but when Euromoney meets him in mid-November, he's already handed over day-to-day responsibility to the new CEO Dieter Rampl. Schmidt now spends his time shuttling between Munich, Brussels and London in his job as an ambassador for the Munich Finanzplatz.

Electronic trading

Financial engineering for ethical investors

Islamic law once forced Muslims to make do with poor investment returns. Now, complex Shariah-compliant structures are burgeoning to add value. We look at the market leaders.

Russia's re-emerging middle class is driving strong growth in the country's embryonic mortgage market as pent-up housing demand and limited supply have caused property prices to soar 30% in Moscow and St Petersburg in the past year.

HVB and Commerzbank face an awful choice: lend more to German companies and rack up those NPLs, or stop lending, induce more bankruptcies and drive away customers.

CEO, Duke Street Capital

There have been many departures from investment banking this year but doubtless staff around Citbank in London will be mourning the loss of Nicola T from their compliance department more than many.

Kazakhstan has had a good run, but the easy things have been done and the strong economic growth of the past two years has eased. The republic is banging up against a ceiling that will only be breached if there is more reform.

Despite the supposed fiscal rectitude demanded by dollarization, Ecuador has once again spent itself into trouble.