Spacs increasingly interested in listing on UK's Alternative Investment Market.

One piece of analysis that is certain to be a fixture on desks this summer is a 59-page report by Goldman Sachs. In preparation for the football World Cup, which kicks off on June 9 in Germany, Goldman Sachs has put together a guide to each participating country and its team’s chances of success.

Investment banks are thinking of setting up their own alternatives.

Merrill Lynch has hired Tim Skeet as a covered bond product specialist reporting to Amir Hoveyda, European head of debt capital markets. He joins Merrill from ABN Amro where he was head of financial institutions origination for Germany and France. He joined the Dutch bank at the start of 2003, before that he held a senior FIG relationship banker role at Barclays Capital. Skeet is a veteran of the debt capital markets and one of the best-known faces in the covered bond sector. He started in the business some 25 years ago at Samuel Montagu.

Richard Longmore, head of EMEA FX sales, has abruptly left Merrill Lynch.

British Land’s decision to convert to a Reit might prompt the restructuring of its Meadowhall securitization.

Bankruptcy of Nici shows vulnerability of small German SME securitizations.

Access to collateral is the number one topic of conversation in the CLO market. But if a viable leveraged loan CDS market develops, Christmas will have come early for many players.

Greece has lagged behind the rest of the eurozone in its use of techniques to free up value in real estate loans and assets. But banks’ needs for capital should fuel securitization, and new legislation will enable public bodies to make sale and leaseback deals. Dimitris Kontogiannis reports.

I was lunching at Cecconi’s with my friend Richard. Cecconi’s is an Italian restaurant in Mayfair frequented by hedge fund hotties, Latvian lovelies with pneumatic mammaries and the odd voyeur such as myself. Dame Marjorie Scardino, chief executive of publishing group Pearson – or her doppelganger – was at the next table. Regretfully, under my Cecconi classification system, she falls into the voyeur category. Well she’s hardly a buxom Latvian is she? Richard is the brother I never had. He is funny, clever, irreverent and, in his spare time, a successful investment banker. If he weren’t one of my closest friends, I would hate him for the insouciance of it all.

Although adoption of an exchange-like structure has been predicted for years, foreign exchange has predominantly been traded over the counter. Could a new initiative by the CME and Reuters finally force the transition through? Lee Oliver reports.

Here are the bond issuers that have taken the market by storm over the past 12 months: from the IFC, punching above its weight within the World Bank group with its pioneering work in developing local bond markets, to Bayer’s use of innovative methods to maintain its credit profile while making acquisitions.

Despite its size and maturity, the covered bond market is fast changing. New countries, new asset classes and new issuers vie for investors. But does the conflict between regulators’ desire for quality and consistency clash with investors’ needs for yield and diversification?

“It’s so bloody liquid, it’s not even funny.”

Indian companies have been the largest issuers of foreign currency convertible bonds in Asia. But there could be trouble ahead.

The global market tremors that have shaken emerging markets might have been expected to cause a few wobbles for the Bank of China IPO, but not a bit of it.

The bad news for Mexicans is that their country is one of the most prone to earthquakes. But at least the government’s financial resources will not be stretched to the limit should one strike following the launch of a $160 million catastrophe bond last month – the region’s first.

Reports of the death of analysis have been greatly exaggerated. Time and again, analysts are proving their worth in league tables and through innovation and bespoke research. But ‘me-too’ forecasting is a hard habit to break.

Hong Kong might have cause to celebrate the PWC report: 97% of the funds raised in the Greater China region were raised in the SAR. Yet it also has much to fear. Always an emotional and volatile market, the Hang Seng Index whipsawed its way through early May after global market wobbles.

If a product swamps a market, prices go down. Yet this basic economic tenet seems to have eluded many of the issuers in the Spanish covered bonds market. How else to explain the consistent lack of coordination in issuance endemic in the world of the cédulas?

Following a two-year hiatus, Belgium settles trade with Citi.

A busy sporting calendar means a burgeoning expense account for many investment banks.

At a time when M&A volumes are rising, a toughening up of the CFIUS could deter foreign companies looking to buy in the US. And that would take a serious chunk out of Wall Street’s fees. Kathryn Tully reports.

Quasi-independent debt management offices are bringing new sophistication to government debt management. But de-risking government balance sheets that have so far failed to account properly for contingent liabilities may be beyond them. Peter Lee reports.

Is there too much capital trying to find a home?

The ability of the CDO bid to distort the wider capital markets is significant – and growing.

Funds may take the chance to rebalance but don’t expect a crash.

The ballooning demand for mortgage credit in Spain is attracting new players and more flexible products.

After years of unfulfilled promise, there is the whiff of optimism in Indonesia as government tackles tangled economic and political challenges. Euromoney spoke to Indonesia’s finance minister, Sri Mulyani Indrawati, about problems, progress and promise. Chris Leahy reports.

Japanese government-guaranteed issuers such as DBJ and JBIC have been among the largest issuers of debt from Japan. With reform of these agencies in the pipeline, what plans do they have for issuance as interest in the Japanese economy picks up?

Investors have welcomed Thailand’s largest IPO for years with open arms. The problem is that those investors are in Singapore, not Bangkok. The failure to list one of the kingdom’s prize assets at home is symptomatic of much larger problems in the country. Chris Leahy reports.

Banks in the Philippines are set for more consolidation as new regulations threaten weaker lenders in a fragmented market. High valuations have dissuaded some from deals, but economic recovery might force them to reconsider. Chris Leahy reports.

Although banks have been leading securitization developments so far in Russia, the monopoly railroad infrastructure provider has come to market with the country’s first transaction backed by lease receivables. Kathryn Wells reports.

Why the European government bond markets have failed...and what the European Union would like to do about it

“Given all that has happened I’m surprised it wasn’t negative $60 billion” James Gorman, Morgan Stanley In his first public presentation since joining Morgan Stanley in February as president and COO of the global wealth management business, James Gorman outlined how he intended to turn the dwindling arm into a competitive force in the industry.

Buy-to-let mortgage originators in the UK market have often argued that these assets should be seen as prime assets rather than non-conforming.

At the end of May, representatives of many of the quasi-independent agencies set up to manage the government debts of OECD and emerging market sovereigns gathered in St Petersburg to compare experiences. There was much to discuss: the meeting came just as diverse pressures are building up on the debt management offices (DMOs).

Too much of a good thing can be harmful, and so it is proving with Asia’s fledgling real estate investment trust sector. Given Asian markets’ passion for property, Reits were always going to be popular. Now one of the latest offerings suggests that investors are becoming more discerning.

The advent of whole-business securitization and the creation of a liquid market in project-related debt has opened investors’ eyes to the rewards available in infrastructure. Governments’ desire for off-balance-sheet funding has also boosted the supply of suitable investments. But what makes infrastructure different? How do you buy it, sell it and manage it?

Hedge fund managers need to realize that many investors will be attracted most by track record and big-name managers.

Lebanon puts itself back at the hub

The ability of the US to run a high current account deficit rests on a widespread belief that inflation and the cost of capital will remain low. But the conditions that underpin the deficit and the dollar’s role as the principal source of global capital are unlikely to be sustained for long.

A rival trading platform for smaller stocks in London is giving the LSE a run for its money.

The dealers at Scottish Widows cemented their reputation as smart traders by winning the Goldman Sachs trading game at the Trade Tech Equities conference for a second year in a row.

New Federal Reserve chairman Ben Bernanke received a B+ from economists surveyed by the Wall Street Journal, but the Dean of Columbia Business School in New York would probably fail him if students are to be believed.

“Financial institutions should put customers’ needs first”, according to a report published by PriceWaterhouseCoopers on May 24. But should their services extend to matchmaking for young journalists? One of Euromoney’s débutant hacks was secretly pleased on a recent trip back from Moscow when his host bank’s head of IR forgot her passport: the subsequent delay meant a missed flight back to London, and a chance to watch the Champions’ League final in Vienna with the bank’s PR man and a gentleman from the Austrian media.

Venture capital in Latin America, led by Brazil, Chile and Mexico, has come a long way since 2003, when the industry raised just $417 million in funds. Last year, the figure reached $2 billion, according to the Latin American Venture Capital Association and, if Brazil can realize its potential, the figure could double by 2008. Brazilian pension funds, with about $120 billion in their portfolios, are making venture capital-linked investments for the first time ever this year, led by state oil workers pension fund Petros.

Maverick leader opens arms to international and national investors.

Wondering why everyone in global capital markets is thinking China these days? Look no further than PricewaterhouseCoopers’ Greater China IPO Watch. According to the accountants, the average deal size from the Greater China region (including mainland China, Hong Kong and Taiwan) was $260 million in 2005, an increase of more than 200%. For the first time, it exceeded that of the US ($170 million) and Europe ($100 million).

One year on, new bonds offer good value.

Funds are circumventing anti-concentration regulations with single-stock futures.

Yulia Tymoshenko, Ukraine’s former prime minister, says her political coalition is committed to a programme of privatization and economic reform if a representative of her team assumes the top job in the country’s next government.

HSBC’s decision to tell the world in advance when it is will carry out a large FX transaction to pay its non-dollar based shareholders their dividends is transparent. But is it wise?

It is a good job that investors don’t seem to be able to get enough of UK prime RMBS as the pipeline of such paper stood at more than £9 billion ($16.7 billion) towards the end of May. The new RMBS issuers poised to launch into this market (revealed in Euromoney’s April issue) were flexing their muscles mid-month, with Lloyds TSB confirming its RMBS programme and RBS first out of the gate with its £4.7 billion Arran Residential Mortgages Funding. The bank has decided not to set up a master trust but will have securitized £9.2 billion of UK mortgage risk via just two transactions in roughly six months when the deal closes. Arran Residential Mortgages, which accounts for half of the pipeline on its own, should get a rapturous reception, given how buyers responded to Standard Life’s latest Lothian issue, which achieved record tights for the sector with dollar-denominated triple-A paper placed at eight basis points over Libor. Later in the month Granite Mortgages saw triple-B risk sold at an eyewatering 47bp over Libor, which could go a long way to explaining the recent intense issuer interest in this sector.

Until recently, it seemed that the big FX players in FX were happy to leave the retail sector to aggregators, perhaps taking comfort from the prospect that once these had built up a decent size position they would see the business anyway.

Andy Abrahams, you’re rubbish...

Of the 8,000 or so hedge funds globally, around 97% are focused on the US and European capital markets. And although opportunities in Asia, Latin America, and central and eastern Europe are being recognized, with the net amount of money flowing into hedge funds that focus on emerging-market investments rising 13% in 2005 according to Hedge Fund Research, not many investors are sufficiently confident to invest in these regions separately.

KBC Alternative Investment Management has suffered redemptions in its hedge fund assets that reportedly amount to 80%. The Belgian bank says the redemptions were made predominantly in 2005 by large institutional investors that were “no longer entirely satisfied with the performance of the hedge funds they had invested in, and decided to move out of convertible arbitrage and other relative value arbitrage strategies”. It says that the alternatives business had €2 billion in assets at the end of last year.

Anthony DeChellis The head of UBS’s private wealth management team in the US is joining rival Credit Suisse to head its private banking operations for the Americas. Credit Suisse has made clear it intends to focus aggressively on building its wealth management offering in the US.

General prosecutor to appeal not guilty verdict against Ulan Sarbanov.

Overvalued IPOs give cause for concern. Some bankers are becoming wary of damaging their reputation with rushed or over-valued Russian IPOs. Two banks dropped out of a deal last month and some analysts urge that caution be exercised in further IPOs.

Troubled emerging markets companies could soon benefit from the development of sophisticated bespoke deals aimed at increasing investor confidence.

Investors need to tread with caution as uncertainty surrounds the Federal Reserve’s next move.

Floating rate notes are typically a short-dated bank product traditionally aimed at other banks’ treasuries. Is this the start of a new trend?

US inflation fears spooked nervous markets this May, causing the biggest one-day falls in years. In the space of a week, the Nasdaq Composite Index and the FTSE 100 gave up their entire gains for the year. Both indices shed about 7%. Markets took fright at the larger-than-expected 0.6% rise in April’s US consumer prices, which also spilled over into commodities markets. Although many think the sell-off has been exaggerated, May’s Merrill Lynch’s Global Fund Manager Survey shows growing pessimism about inflation and corporate profits. The survey shows a sharp increase in the percentage of fund managers who expect a rise in core inflation, to 64% from 47% a month earlier. A net 9% of fund managers also expect corporate profits to deteriorate while a net 27% except operating margins to deteriorate. Nevertheless, half the sectors in the S&P500 have been posting double-digit earnings growth. Despite the uninspiring outlook for equities, bonds are still looking overvalued to a net 48% of respondents while equities by contrast are still looking underpriced to a net 3% of investors.

...While Wax wows them

Russian firms seek investor-friendly foreign talent; investor-friendly foreign talent seek large bonuses.

Merrill Lynch has upgraded Tunisia to overweight in response to the government’s announcement of a $1.56 billion debt management programme to be funded by the privatization of Tunisie Telecom. The bank believes this active approach will help bond prices, and categorizes Tunisia as a defensive asset at a time when the global emerging markets outlook is unsteady.

UBS has appointed Tom Fox and Matthew Koder as joint global heads of equity capital markets, replacing Lucinda Riches, who has headed the division for the past seven years.

NAIC’s SVO brings further woe to the hybrids industry; the US market looks less viable than it once did.

Despite brighter prospects for the Japanese economy, corporate issuers are not rushing back to the international or domestic bond markets. Chris Wright reports.

The eagerly awaited opening up of mainland China to Reits investment continues to hang fire but the market is hot elsewhere in the region, with retail and institutional investors piling into new issues. Some in the market, though, reckon that investors often have over-inflated expectations of Reits’ returns and a poor grasp of the complexities of the deals. Chris Wright reports.

Greek real estate moves into catch-up mode

Otmar Issing has been the most impressive advocate of the ECB. What happens now that the bank has lost its implicit third pillar in monetary policy?

AXA’s proposed extreme mortality cat bond will set the tone for the insurance securitization sector this year.

The National Bank of Slovakia is likely to consider a 50 basis point rate increase this month as the koruna’s failure to appreciate in recent months drives inflation, according to analysts at Deutsche Bank. The Slovak Republic enjoyed an acceleration of real GDP growth to 6% in 2005, and the central bank felt confident enough to issue a target inflation rate of below 2% by 2007. But the currency’s disappointing performance has led to higher than expected inflation this year, and the strong suspicion that the NBS will buy crowns if further tightening doesn’t prevent further depreciation.

Europe’s government bond auctions are a classic example of market failure. The department of Charlie McCreevy, the EU’s markets commissioner, knows this but can do nothing until it receives an official complaint. If banks are subsidizing the auction process to the tune of €600 million a year, as some claim, why don’t they make the call to Brussels?

Financiers in the Caribbean are planning to establish a region-wide capital markets exchange to create a financial hub with critical mass.

Spain’s securitization market grew by more than 35% last year, driven by demand for more, and more flexible, mortgage credit. Specialist investors are now hoping that issuers can be persuaded to sell first-loss exposure to this risk. This comes, though, as concerns grow about the potential fallout from a seemingly unsustainable house price boom. Louise Bowman reports.

Barely a month seems to pass without either the launch of a new foreign exchange trading platform or at the least a significant enhancement and upgrade to an existing one.

Saudi petrochemicals company Sabic will issue domestic sukuk bonds with a total value of at least SR1 billion ($267 million), according to the company’s financial vice-president, Mutlaq al-Morished. The bond should be finalized this month or next, with huge demand expected from the paper-hungry local market.

The structured bonds business is changing in emerging markets. The rapid development of local capital markets means that the product’s future lies closer to home. Euromoney takes a closer look at some of the developing world’s more innovative securitization markets and deals.

As more and more Mexicans are encouraged to buy their own homes, the companies that provide mortgages will increasingly look to the international capital markets to fund their lending. Armando Guzman, director general of mortgage provider Metrofinanciera, talks to Lawrence White about his expansive borrowing strategy and his hopes for the development of mortgage-backed securitizations.

Hiring and firing securities markets regulators on the basis of stock index performance is not a particularly credible policy. But that’s what the Saudi authorities did last month, sacking the chairman of the Capital Markets Authority, Jammaz Al-Suhaimi, a modernizer and reformer unfairly demonized on stock speculators’ bulletin boards across the kingdom as somehow being responsible for the crash of an overvalued market.

The listed infrastructure fund, which is common in Australia, is gaining traction in Asia, with two new structures hitting the market in recent weeks.

Love them or loathe them, institutional investors are now an increasingly important fact of life for LBO financial sponsors. CLOs now account for more than 30% of the market in Europe and are starting to venture into every part of the LBO structure. But if things go wrong, there is now a fund manager across the workout table, not a friendly banker. Louise Bowman reports.

The heyday of the traditional debt capital markets is long gone. Who would have thought that, some six months into the year, it would have taken just a $6 billion share of underwriting to take top place in the US investment-grade corporate bookrunner table? Go back to 2004 and it would have been something like $10 billion. Perhaps a bigger surprise is that this number trails behind the equivalent European league table (€8.5 billion).

Dmitry Eropkin, president of Russia’s Impexbank, said as Raiffeisen completed its acquisition of his bank that he expected to see “the consolidation of the top 50 Russian banks within the next two to three years”.

Saudi regulator leaves a positive legacy for his country’s financial markets.