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July 2008

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  • Every cloud has a silver lining. With the international debt markets only now open to a select few Russian corporates, and with many Russian banks strapped for cash, there are plenty off opportunities for asset managers to lend to strong corporate credits at distressed debt-type margins.
  • Malaysia’s CIMB has finally closed a deal in Thailand after it was outbid by ICBC on a previous attempt to buy ACL Bank. CIMB will now acquire 42% of BankThai, and, pending regulatory approval, will then scoop up the bank’s remaining equity, paying around Bt2.10 per share for stock last seen trading at Bt1.32. BankThai is in desperate need of funding after suffering heavy losses on overseas CDO investments. Ratings agency Standard & Poor’s has put CIMB and its holding company BCHB on Creditwatch with negative implications, saying it needs to discuss fundng and integration plans with the group before reversing that move.
  • The announcement of the creation of a central counterparty for over-the-counter credit default swap trades has been described as one of the biggest developments in the history of the market.
  • Tudor Investment Group, the $18 billion alternatives firm, has hired Greg Hanley and Alan Mintz, co-heads of the distressed debt group at Bear Stearns, to head a new business focusing on credit-related strategies. Three other Bear Stearns employees are also joining the group.
  • The China Securities Regulatory Commission has given Credit Suisse the go-ahead to launch a joint venture with local firm Founder Securities. The Swiss bank takes a 33% share in the new entity, which will be able to sponsor and underwrite A shares, foreign investment shares and government and corporate bonds. The firm will not be able to offer secondary market services such as research and broking, however: under new regulations announced in 2007 Sino-foreign joint ventures must show a track record of five years’ unblemished service before being able to expand their activities.
  • Andre Esteves, who was chairman and chief executive of Latin America at UBS Pactual, has left the firm to set up a fund. Rodrigo Xavier will replace him and will report to Jerker Johansson, chairman and chief executive of UBS Investment Bank. In addition, Juerg Haller has been named chairman and chief executive of UBS Latin America, spanning all business groups.
  • The 2008 Global Awards for excellence
  • Standard Chartered has opened a branch in Paris to tap into the considerable flow it already sees from French corporates and financial institutions. The bank says the branch will facilitate access for those French firms looking to capitalize on the huge investment flows between key markets in Asia, Africa and the Middle East. The team in Paris will be led by Raoul Leblanc.
  • Changes in domestic market conditions are making borrowing abroad the most attractive option for Chilean banks and corporates.
  • As part of the decision-making process for the Awards for Excellence, Euromoney journalists conduct numerous interviews with senior bankers who aim to convince us why they should win.
  • The biggest retailers will regret having been blind to opportunities in emerging Europe.
  • Tight spreads and a lack of differentiation between issuers are things of the past in the covered bond markets. But perhaps this is more “normal” than the bull market situation.
  • We could be living through the last days of the independent investment banks.
  • Last month’s Global ABS conference in Cannes was shaping up to be more of a wake than its usual annual party as things in the market went from bad to worse in the first quarter this year. But speakers at the event in June were (not surprisingly, given what they do for a living) determinedly upbeat about the market’s prospects. "We come to praise Caesar, not to bury him," declared Clifford Chance’s Kevin Ingram in the opening panel.
  • Perhaps Credit Suisse is seeking to reach the parts other banks dare not reach for?
  • Institutional investment in commodity markets is boon not bane.
  • Jack Jeffery, former chief executive of EBS, has joined option pricing specialist SuperDerivatives as chief operations officer. Jeffery will lead SuperDerivatives’ management team and oversee the execution of its business strategy. He will be based in London. The company has also employed Anton Aucamp, who worked with Jeffery at EBS, as its head of marketing.
  • HBOS, whose dealing rooms operate under the name of Bank of Scotland Treasury, has made two senior appointments to its Australian FX operations. Michael Peric joined as head of trading from NAB in early June. He has been joined by Matt Brady as head of FX trading.
  • The firm appears to have timed the launch of its upgraded option system to perfection.
  • 7 the average percentage return of US IPOs one month after listing so far this year.
  • The transatlantic exchange group this June announced a strategic partnership with the State of Qatar to invest $250 million in a 25% stake in the Doha Securities Market. The DSM will adopt NYSE Euronext technology and gain an international partner while NYSE Euronext will gain a foothold in the fast expanding Middle East.
  • After being among the top performers of 2007, Asia-focused hedge funds are suffering this year. In 2007, the HFR Asia composite hedge fund index returned more than 17%, and the Asia ex-Japan index almost 40%. Year to end-May 2008, however, the Asia ex-Japan index is down almost 10%. If investors piled in based on past performance, they will now be kicking themselves.
  • Many hedge funds are significantly more hedged that they were one year ago, says Steve Gross, principal of Penso Capital Markets, a New York asset management and risk management firm.
  • As one door closes, another opens. Odey Asset Management closed its $40 million Japan hedge fund in June after it fell more than $1 billion in 18 months. The same month, though, the manager announced that it would be creating a fund of hedge funds subsidiary in order to play out some of its investment theme convictions.
  • As the structured finance market struggles to reinvent itself, the orgy of recrimination among constituents is intensifying.
  • Citi has promoted Tom King to a new position of head of EMEA banking. His role encompasses investment banking and the corporate and commercial bank. He will also oversee the newly created capital markets origination group for the region.
  • London-listed asset management group Polar Capital is looking to launch a fund later this year to take advantage of the attractive investment opportunities it believes exists in Ukraine. Earlier this year, Polar relocated its head office for emerging Europe to Kiev from Moscow, citing the growing attractiveness of the Ukrainian economy.
  • After suffering from several departures to local rivals, especially VTB, Deutsche Bank has sought to bolster its Moscow office with new hires. Alex Bronin is appointed head of emerging markets structuring for Russia/CIS, Valeri Pouchni, head of rates and FX trading, Andrey Yumatov, head of corporate derivative sales, Alex Danylenko, head of local-currency bond trading, and Diana Nikolova as a senior structurer focusing on Russian structured credit.
  • Underlying the headlines are distortions in the market that can be overcome by liberalization.