The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

March 2003

all page content

all page content

Main body page content


  • Financial markets seem to be assuming a short, sharp US assault on Iraq with finite post-war costs. But there's well-documented evidence that Iraq is only the first step in a strategy of total war that could undermine both the US and global economy.
  • With so many corporates under pressure to raise cash, and understandably loath to sell off holdings at depressed prices in a weak market, the hunt for higher valuations is driving a wave of complex structured equity deals.
  • For luxury goods company Richemont, whose brands include watchmakers Jaeger-LeCoultre and Baume&Mercier, raising money was not a priority. It did, though, have a delicate timing problem. It owned 27.7% of British American Tobacco. But it also held just over 120 million convertible preference shares into BAT due to mature in June 2004 with a redemption price of 675p. If, at maturity, the shares were trading below 675p, Richemont would redeem the bonds and receive £820 million in cash. However, if the share price rose and the bonds converted, Richemont would go above the upper holding limit under the UK takeover code and be obliged either to launch a full bid - which it did not want to do - or become a forced seller.
  • Pension fund shortfalls have come to the fore as new accounting requirements and credit rating agencies factor them in to assessments of corporate health.
  • A unified European securities trading infrastructure finally appears to be within reach. But will the market appreciate it when it gets what it's always asked for? After all, inefficiencies present opportunities to make money. If cross-border trading gets cheaper the benefit should be passed back to the end investor. Yet banks and fund managers, under pressure to slash costs, might not be ready to hand it over.
  • By 2005 Germany's Landesbanken will lose their state support. Then, say the private commercial banks, the country's banking system will benefit from a level playing field. But none of the banks will be able to turn a profit if they don't make radical changes.
  • A series of problems for other retailers seemed set to spoil the show for Metro when it issued in January. In the event it attracted e11.1 billion of support from euro investors. Then came Ahold.
  • Few people would want Michael Conolly's job. As the chief financial officer of Portugal's state-owned carrier TAP, he faces all the problems his airline peers are struggling with, plus a few that are specific to his own company.
  • Paul Myners' address at Institutional Investor's European equity research awards' dinner was a neat second act to New York state attorney general Eliot Spitzer's attack on US equity research analysts at the magazine's awards dinner in New York in November.
  • Foreign exchange
  • There can't be many countries where the finance ministry gives visiting journalists an information pack including a graph entitled "Social protest events during 2002". Such events are helpfully defined as "crowd concentrations, mobilizations, blocking highways and downtown streets, partial and total strikes, takeover of establishments, and so on." Apparently the number of such events has fallen from over 2,000 a month in the first four months of the year to fewer than 1,000 a month since June.
  • Argentina is coming out of crisis, but few investors have noticed. Those that have can do little to profit from their knowledge. But there's a long way to go and the aspirations of the 1990s are unlikely to be fulfilled.
  • The focus of consolidation of European equity exchanges lies in the triangle of Deutsche Börse, Euronext and the London Stock Exchange. To the impartial, dispassionate observer, there might seem little problem with any tie-up between London and a continental European player. But to those who work and live in the markets, exchanges, like national airlines, are a mark of a country's honour and something to be fought for.
  • IN NOVEMBER 2001, a 73-year-old businessman defeated an anti-US ex-president to lead a troubled central American country. The news was celebrated in the US, but more because Daniel Ortega had lost again than because of any hopes surrounding Enrique Bolanos. What no one-expected was that Bolanos would turn out to be something of a revolutionary himself, embarking on a crusade to clean up Nicaraguan politics and rehabilitate his country not only in the eyes of the world, but, more important, in the eyes of its own citizens.
  • For someone who lists the presidency of the Institute for the Development of Eucalyptus Applications on his CV, Jorge Armindo Teixera is remarkably personable. The main achievement listed on that CV is his position as the president and CEO of Portucel - Portugal's leading pulp and paper manufacturer and the country's best hope for a privatization in 2003.
  • The new euro-denominated 30-year bond market found natural buyers in insurers with long-term liabilities. But when the market broadened into a rush, things rapidly went wrong.
  • Roberto Lavagna is that rarest of breeds in Argentina: a popular politician. As finance minister he has put the economy on a steady growth course as elections approach.
  • With much of south America in economic turmoil, central America has become a safe haven for high-yield bond investors. But oversupply and renewed instability might soon undermine the region's attractiveness.
  • Portugal
  • There's a war that's always being fought in financial markets - sometimes beneath the surface, sometimes in plain view - between the interests of debt holders and shareholders.
  • Following three years of disappointing earnings - and plummeting stock prices - leading Greek banks hope 2003 will be a turnround year. Their hope is based on a firm foundation absent elsewhere in Europe: strong loan growth underpinned by a growing economy and a largely under-leveraged household sector. Tapping that customer base should finally boost their bottom line.
  • Pity small investors. After three years of being kicked around by the markets, now they're being kicked by the people who encouraged them to have a punt in the first place.
  • Germany's banking elite struggles to keep a secret, it seems. Confidential talks between executives from the country's largest banks and government officials wound up being anything but.
  • Despite investment banks' profits being under pressure, with share prices on the slide, bonuses and jobs being slashed and a general state of panic and insecurity throughout the industry, all the major banks will still be shelling out for a box or suite at this month's CSFB-sponsored Hong Kong Rugby Sevens.
  • Privatization looked to be the answer to Portugal's widening budget deficit but poor market conditions have stymied it. The government, though, has cut costs and boosted revenues, with favourable capital market effects.
  • Bankers have long been fond of jargon and they do a good line in euphemisms too. As we reported in December, some will do anything to avoid actually saying that the economy is in tatters and people are being sacked.
  • Not so long ago, a large stake in Deutsche Telekom would have been a nice asset for any company to have on the balance sheet. When telecom companies were all the rage, such holdings could be sold for a healthy profit. By last year, however, such a block of shares was far more of a millstone than a jewel.
  • John R Taylor Jr is the CEO and founder of FXConcepts, a global investment management and research firm specializing in currency risk ( Uncontrollable major disruptions in financial markets are a distant memory. That's about to change.
  • IT WAS THE kind of grouping that could only happen at Davos. Five Latin American presidents were assembled in one place in February, for a panel discussion: Alvaro Uribe of Colombia, Eduardo Duhalde of Argentina, Alejandro Toledo of Peru, Vicente Fox of Mexico, and Lula of Brazil. Uribe explained the economic reforms that he had managed to push through with the aid of his finance minister, Roberto Junguito, who was sitting next to Francisco Gil Diaz, his Mexican counterpart.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree