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June 2004

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  • The International Swaps and Derivatives Association is writing to capital markets regulators in the Middle East to see whether its derivatives documentation can be used in Islamic jurisdictions.
  • BNP Paribas has long been a staunch supporter of tennis and is firmly connected with the French Open championships at Roland Garros in Paris. But the surprising success of Tim Henman this year will surely have raised Gallic eyebrows.
  • Of all the global investment banks, UBS has perhaps the most unlikely provenance, rooted as it is in private-banking skills. After transformational acquisitions a new UBS has emerged that means business. Group CEO Peter Wuffli outlines its ambitions in Asia.
  • Glittering skyscrapers, air-conditioned malls, manicured lawns, litter-free boulevards, and a law-abiding population... It is hard to believe that 200 years ago Singapore was a disease-ridden backwater populated by fisherman and pirates. And just 40 years ago the island state was racially divided, lacking in resources and reliant on unfriendly neighbours for food and water. Singapore?s transformation into a thriving global financial centre, however, is not a result of natural evolution. Rather, its leaders have approached it as a carefully thought-out project. What Singapore has lacked, it has simply created ? it?s ?a man-made miracle?.
  • M&A activity in Australia, which has the largest M&A market in the Asia Pacific ex-Japan region, is set to grow by 20% this year, according to JPMorgan.
  • As Euromoney's annual awards show, best borrowers come in all shapes and sizes, winning acclaim because of their investor appeal, tight pricing, good timing, or structural ingenuity. But, as Kathryn Tully reports, activists on the buy side are developing a more formal view of the basics of an investor-friendly issuer.
  • The promised crisis never came and instead last year turned out to be a good one for most banks. This year is set to be even better as banking becomes structurally ever safer, though it will never be entirely risk free.
  • Igor Yurgens, executive secretary of the Russian Union of Industrialists and Entrepreneurs, is a little wistful. “We used to have regular meetings with president Putin, roundtable discussions, normally in the presence of the prime minister and chief of staff,” he says. “We delivered a message, and usually he listened attentively, then we prepared a draft law if required. Then we’d work through bilateral committees and commissions.” But invitations from the Kremlin have got scarcer. “There has been a pause since the Khordorkovsky case,” Yurgens says. “We haven’t had any of these roundtable discussions since June last year. We had a chance to express some of our concerns to the president at our congress in October 2003, and that’s it. So now we’re waiting for a new meeting. It’s supposed to take place this month, and we’re hoping the dialogue will be resumed there. But at the moment, it’s pretty tense.”
  • Siemens Financial Services (SFS) has teamed up with UK securitization boutique SecDebt to try to bring SMEs and mid-cap companies to the capital markets. SFS and SecDebt reckon that between them they can cut the cost of issuing bonds backed by invoice debt in trade receivables-style deals.
  • Investment banks are bulking up their presence in mortgage lending, once the exclusive domain of their commercial and retail brethren. For some, such as Merrill Lynch, the advantage lies in being able to offer yet another financial product to its wealthy private clients.
  • Continuous Linked Settlement (CLS), the electronic settlement network for foreign exchange, is handling a growing proportion of transactions globally, according to a new report.
  • It seems Bank of England governor Mervyn King?s love of football is catching on at the UK?s central bank.
  • ABN Amro last month made a curious choice of words to announce the arrival of some new staff in its commodity derivatives division.
  • UK bankers depressed by the size of their last bonus should stop reading now. The news gets worse.
  • If you ask a trader to explain the emotional relationship he has with his positions, you will usually be met with a gruff rebuff.
  • Private investors and institutions have both benefited from the flexibility of hedge fund products. But as the market matures, the products available have become more complex and the strategies employed more diverse. And with market growth comes a possible dilution of the hedge fund ideal. What should investors do now?
  • It was a case of save the whales but lose the CEO on the island of Sakhalin off the far-east coast of Russia last month. Sakhalin Energy, a multi-billion dollar oil and gas project whose majority shareholder is Shell, is rethinking plans to build an offshore pipeline in the Piltun-Astokhskoye field ?to ensure minimal disturbance to the western grey whale?.
  • Seeking funds for a US acquisition, Royal Bank of Scotland filled the book for a £2.5 billion equity placing in one day. The money raised will part fund the purchase of US bank Charter One Financial.
  • The panic selling that hit high-yield bonds, high-yield currencies, and emerging-country debt and equity markets last month has utterly destroyed market consensus.
  • The timing couldn?t have been worse. The Yukos saga moved into its endgame as charges against both the oil company and its biggest shareholders went to court at the end of May. The bankruptcy of what was once Russia?s most valuable company now looks like a real possibility. Investors would have been unnerved anyway, but the start of the trials coincided with a string of bad news and Russia?s leading RTS index slipped, wiping out all of this year?s gains in a week.
  • By Fiona Maharg Bravo
  • There have been more rumours in the past two years that CSFB and Credit Suisse were about to be sold than there have been sightings of Elvis. And like the King of Rock 'n' Roll, these rumours just won't go away. The recent spate of commercial bank mergers in the US fuelled speculation, with Credit Suisse said to be hooking up with Deutsche Bank, Citigroup and, lately, HSBC.
  • The family's toilet seat hangs on a nail in the shared bathroom. The man in the big room at the end of the corridor is always drunk. No-one cleans the kitchen properly. And the baby next door always cries in the middle of the night. Tens of thousands of Russians still live in communal apartments (komunalka) in buildings confiscated from the rich and given to the workers immediately after the revolution. Entire families are crushed into each room, with six or seven families to an apartment. The irony is that some have decent jobs but are unable to borrow from a bank, so moving remains beyond their reach.
  • There was great potential for confusion at Deutsche Bank?s London office one day last month. Standing in the grand reception area was a large sign bearing the words ?Welcome to Marks and Spencer?.
  • Development bank AFD's issue offered government-style risk with enhanced yield. That was a winning formula with investors, whose interest rapidly took the e300 million deal's book to e1.2 billion.
  • Six years of haggling came to an end last month when Russia and the EU finally signed off on a bilateral trade agreement that clears away a major obstacle in Russia?s efforts to join the World Trade Organization.
  • Investors panicked last month as fear spread that the US Federal Reserve would soon hike rates. Momentum players of the global reflation trade rushed to unwind positions in high-yield markets. Borrowers were forced to pull deals. The panic subsided as quickly as it arose and the sell-off failed to engulf global markets this time. What happens next?
  • When WestLB put the venerable but slightly dishevelled corporate broker Panmure Gordon up for sale in January 2004 it was probably rather surprised to find 35 bidders competing for the toy it had got bored with.