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June 2008

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  • Star performers are not motivated solely by the chance to earn yet more, as the pending departure of Greg Coffey from GLG to start his own business shows. Neil Wilson reports.
  • The Angolan government wants foreign companies to divest part of their stakes in their subsidiaries to the country’s wealthiest companies as part of its strategy to localize key assets.
  • Standard Chartered and the International Finance Corporation have joined forces to launch the first-ever issuance of credit-linked notes backed by loans to microfinance institutions (MFIs) in sub-Saharan Africa and South Asia.
  • Martin Egan is the new global head of debt capital markets at BNP Paribas. Egan maintains his role as head of primary markets where he oversees fixed income syndicate.
  • The commodity price boom masks fundamental questions about the value of commodity investments in a portfolio, the choice of commodities and the most constructive use of indices. Euromoney’s debate panel grapples with the crucial issues.
  • Most US hedge fund managers are pessimistic about the US economy this year, according to a survey by Kinetic Partners.
  • The usually laborious task of bringing a new exchange traded fund product to market in the US looks set to become a thing of the past once new SEC rules come into play.
  • After a year that has been ruthless in its revelation of sub-par debt services, the Euromoney debt poll reveals which banks have managed to survive the credit crunch with their reputations, and their client bases, still intact.
  • Anyone with a brief to outline the benefits of mezzanine lending over the hedge fund and CLO money that recently replaced it could do worse than sit back and wait for the first wave of recent LBO deals to go wrong.
  • Bankers say there will be further equity capital markets issuance from farming groups in Ukraine in the coming months.
  • Venezuela has negotiated a new loan agreement with several Japanese companies. The money is earmarked for the expansion of two oil refineries and the loans will be repaid in future oil production. This is not the first time Venezuela has relied on oil repayment – China is owed $4 billion in oil for a loan and PDVSA owes Japanese companies Mitsui & Co and Marubeni $3.5 billion in oil. Rafael Ramírez, the energy minister of Venezuela, said the money would be used to expand the El Palito and Puerto la Cruz refineries and increase their capacity to process heavy crude. Ramírez said: "Japanese companies are moving very aggressively, they want a position in Venezuela." He did not say which Japanese companies are involved in the deal but Japan is looking for ways to reduce its dependence on Middle East production. In 2007, Japanese refiners brought Venezuelan crude for the first time since the 1980s.
  • Brazil plans a sovereign wealth fund.
  • Inflation in South Africa continues to shock after reaching 10.4% on a year-on-year basis in April. The rate confounded expectations, including that of Tito Mboweni, the central bank governor, who told Euromoney, two weeks before the announcement of the April figure, that he believed it had peaked at the end of the first quarter.
  • After the bleakest of winters, springtime in the debt capital markets was an especially joyous affair. In April and May there were record new-issue volumes in the US and a revival of the European market. That is good news for large financial institutions and the big underwriters.
  • Revelations on Moody’s mis-rating of CPDOs could be the most damaging yet.
  • Asian investment banking thrives despite woes in Europe and the US.
  • Much of the focus on the credit crunch has been on the biggest financial intermediaries, but fixed-income investors were also shaken. Alex Chambers finds out what the biggest players think are their opportunities and challenges.
  • The credit crunch has brought the benefits of a strong, experienced debt house into stark perspective, and there has been a realization that not all investment banks and their services are equal. Jethro Wookey reports.
  • It was all going so well. In the past three years the Philippines has been the poster child of emerging markets fiscal policy, turning a crippling deficit into an almost balanced budget. But having done all the hard work, its achievements might all be derailed, thanks to the soaring oil price and rising food prices.
  • Equity issuance volumes, especially IPOs out of Brazil, will pick up in the second half of the year, according to senior bankers in Latin America, after the credit crunch put a halt to the region’s four-year boom.
  • "Go West", sang the Village People when encouraging listeners to seek utopia but bankers considering their career prospects might now be advised to go in the opposite direction. In what might be a sign of things to come, Credit Suisse has relocated two senior bankers to Asia, seeking to align top talent with areas of highest potential growth. First up is Vikram Gandhi, who has led CS to its position as the top M&A adviser to financial institutions (year-to-date) since he joined the firm in 2005. Gandhi, who moves from New York to Hong Kong, will continue in his role as head of the global financial institutions group. Before he joined Credit Suisse, Gandhi was head of FIG at Morgan Stanley.
  • Oi Participações, the Brazilian telecoms group formerly known as Telemar, is to buy local telecoms rival Brasil Telecom for R$5.86 billion ($3.5 billion). The merger will create the leading telecoms operator in Brazil, with 70% of Brazil’s fixed-line market. The deal awaits changes in the regulatory framework, which does not allow a single group to hold two separate telecoms concessions. Rothschild, Morgan Stanley and Credit Suisse advised Telemar. Brasil Telecom did not employ any investment banks.
  • Hindsight is a wonderful thing. But according to analysis by Riskdata, investors would have been able to predict funds that would lose money back in June last year had they used the right models.
  • The European Commission’s threat to restrict emission credits could fatally hurt the growing carbon market. Peter Koh reports.
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  • CLS has added the Israeli shekel and Mexican peso to the 15 currencies it settles. "Bringing the benefits of CLS settlement to an ever wider community of stakeholders is central to our strategy of growing the value of CLS to the market. The local banking systems in Israel and Mexico will also experience the risk and efficiency benefits that CLS participation will bring, and we are very pleased to welcome these two new currencies to the CLS community," says Rob Close, chief executive of CLS Group.
  • CLS adds shekel and Mexican peso...
  • Nasdaq OMX has chosen the European Multilateral Clearing Facility, run by Fortis, to be the clearer for the pan-European MTF that it plans to launch in September. Nasdaq OMX’s choice is a boost for EMCF, which also handles the clearing of rival pan-European MTF, Chi-X.
  • NYSE-Euronext is capitalizing on regulatory convergence to show issuers some of the benefits that it had hoped its transatlantic merger might be capable of.
  • The Middle East and north Africa will be the top-performing regions in 2008, according to a survey of 1,000 investors by Deutsche Bank.