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July 2007

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  • In the July 2007 edition of Euromoney, Bank of America CEO Ken Lewis gave a rare in-depth interview. Lewis said: "We are not believers in the build it and they will come mantra. We need to look our shareholders in the eye". "In time, we want to be one of the top five investment banks in the world". More than 18 months ago Euromoney said: "Bank of America is at a tipping point. Ken Lewis is about to face his biggest challenge yet." Little did we know how great the challenge would be. Re-read the story here
  • John Mack has the job he always wanted. One of Wall Street’s leading firms has the leader it desperately needed. Morgan Stanley is now the investment bank with momentum. Mack and his senior management tell Clive Horwood how they revived the firm’s fortunes.
  • Its pivotal role in the most important transactions of a hectic year in M&A makes Goldman Sachs the outstanding player in the most competitive market of all.
  • Find out which institutions have excelled this year in providing high-quality products and services across all areas of commercial and investment banking.
  • Rob Lichten has left his role as global head of FX sales and trading at JPMorgan to take what the bank described as a long sabbatical. His decision came after the bank decided to merge its G10 FX and rates businesses and combine all its emerging markets into its wider EM platform. The bank later announced that Chris Willcox and Matt Zames would co-head global rates and currency trading, excluding Asia ex-Japan.
  • The launch of further FX indices by Citi and Axa underlines the acceptance of FX as an asset class, which has attractions across the entire investment spectrum.
  • The Securities and Futures Commission of Hong Kong announced in June that it would be "streamlining and simplifying" the licensing process for hedge fund managers with immediate effect. Alexa Lam, the SFC’s executive director of intermediaries and investment products, said: "These initiatives will make the licensing process easier for fund managers and more particularly for overseas hedge fund managers. They are not intended to lower our regulatory requirements because we recognize that these contribute to Hong Kong’s reputation among investors as being a jurisdiction in which appropriate standards are insisted upon among its market participants."
  • "My only expectation is that I am going to continue to work my ass off"
  • The storm clouds that were once on the horizon are now overhead.
  • Head appointed of a new strategic solutions group.
  • There’s trouble brewing in the Chinese stock market. But a short, sharp shock could be just what is needed.
  • Great-West Lifeco (GWL) has priced the first Canadian dollar-denominated, tax-deductible hybrid capital transaction.
  • 110 the percentage increase in SEC-registered ECM volume from the mining sector year-to-date. Mining companies have raised $6.7 billion via 11 deals so far this year, compared with $3.2 billion via nine deals over the same period in 2006.
  • Neil Wilson, editorial director at HedgeFund Intelligence, argues that there is little substance to the conspiracy theories that dog private equity.
  • Numbers of specialists up 63%, to over 300 since Sept ‘05.
  • Decisions by two leading banks to allow clients to post bids and offers on their platforms call into question the need for multi-bank portals.
  • The third draft of Italy’s covered bond legislation has been published.
  • Private financing and the crossover space between debt and equity is an increasingly attractive area of business for investment banks. Already a player in the sector, Deutsche Bank is making a renewed push for dominance in Asia with a significant hiring programme.
  • S&P this June launched the new S&P Pan Asia Shariah Index, a new addition to its Global Shariah Index Series.
  • "OK, so I screwed up. Even my COO called me up and said: "Great pitch mate, really compelling – shame about the logo on the top of the page"
  • Hedge fund research group HFR says that in response to enquiries from investors, it is launching an index of hedge funds run by women and minorities called the Diversity Index. Since January 2003, the number of minority and women-owned hedge funds in the HFR database has doubled to more than 100. HFR president Ken Heinz says that requests have come from institutional investors that are required to invest a certain percentage with minority groups. On a historical basis, from January 2003 to May 2007, the index would have produced an annualized net return of 11.26%.
  • HVB has continued the build-up of its FX business with several senior-level sales appointments, including Mark Sweeting, who it enticed from ABN Amro in London. The bank also hired Toby Angel from JPMorgan, Peter Graham from Pru-Bache and Sue Rasmussen from ANZ.
  • Sub-prime-induced volatility was cited as the reason for the withdrawal of a five-year and 10-year euro-denominated transaction by Arcelor. The lead managers – Calyon, Citi, Commerzbank and RBS – sent out a terse statement saying that the borrower would return when stability returned.
  • The UK’s Financial Services Authority has granted CME the status of a recognized overseas clearing house. This will allow it to clear products that are not traded on the centralized markets run by the CME in the US, including currency forwards.
  • Corporate treasurers are keeping a close eye on the new regulations that will impact on cash management. The Payment Services Directive is due this autumn – another step forward – yet the timetable for Sepa is still vague. Even identifying the benefits of the changes is a matter of hot debate. Julian Marshall reports.
  • The world economy is set to keep growing fast for the next few months. But this will take an inevitable toll on the cost of capital, which is already rising.
  • According to a study by Greenwich Associates, funds of hedge funds are beating high-net-worth individuals and family offices as a source of assets for hedge funds with more than $1 billion in assets under management. HNWIs and family offices contribute 21% of assets, while FoHFs contribute 25%. Pension funds, endowments and foundations directly investing comprise 25%. US institutional allocations to hedge funds are now at more than double the 2001 level, says Greenwich. Some 36% of US institutions invest in hedge funds.
  • Global Maritime Investments fund has annualized net returns of more than 30%. Founder/partner Steve Rodley of manager M2M explains to Helen Avery how shipping hedge funds are meeting investor demand for diversification and performance.
  • The launch of faster, higher-capacity systems by exchanges will make life harder for ATSs.