Euromoney, is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024
Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

March 2006

all page content

all page content

Main body page content

LATEST ARTICLES

  • International cash management meets the global challenge
  • Bank of America gets the edge with its acquisition of Financial Labs.
  • Grupo Santander is often considered to be among the sharpest of borrowers, and it certainly has one of the biggest profiles. José Antonio Soler, who has run its funding operation for a year and a half, talks to Alex Chambers about the group’s quest for new pools of capital and its developing issuance strategy.
  • With the notable exception of Deutsche Bank, German investment banks’ performance has lagged their French peers for most of the decade. But the German sector is picking up on new market possibilities, with Commerzbank in particular looking to rebuild its business after a dramatic recovery. Philip Moore reports.
  • Brazil’s biggest private sector bank has announced the creation of a new subsidiary, Bradesco Investment Bank. This will focus on all aspects of the local and international capital markets business as well as asset management. Bradesco is a retail powerhouse but the bank’s CEO, Marcio Cypriano, is keen to take advantage of growing capital markets activity from Brazilian entities. Cypriano told Euromoney last year: “In general, we should be bigger and better in capital markets. That business should closely match Bradesco’s retail performance.” [See Euromoney December 2005, “Bradesco's plan of attack”.]
  • The Swiss bank is making determined efforts to grow its US private banking business.
  • Goldman Sachs might still be the firm to beat when it comes to global M&A but it has just lost the chairman of its European investment banking business, Claudio Costamagna, who will leave this month after 17 years at the firm.
  • Dollar bond with enhanced curve is a sign of bigger things to come.
  • The Iranian authorities’ recent granting of operating licences to two new private banks (Bank Sarmaye Daneshgah and Bank Pasargeda) suggests that the sector has a future, despite president Mahmoud Ahmadinejad’s apparent disdain for his predecessor’s reformist agenda.
  • Supply of both Islamic-compliant and conventional instruments has so far failed to keep up with the voracious levels of demand across the Middle East, but there are signs that product-starved investors might now begin to see a steadier flow, though far-reaching challenges remain. Kathryn Wells reports.
  • Fund managers' priorities for 2006
  • ESG
    Invest with female mutual fund managers to save on trading costs
  • FX heads aspire for gold in L’Etape du Tour bike race.
  • It’s not easy to see, but behind the trillions of dollars of FX trading a collision between new technology and traditional banking is changing the economics and mechanics of the business. So far, participants talk politely of cooperation.
  • A mixture of accounting issues, demographics, trends in the equity market and a sharp fall in bond yields has revealed the chasm between the assets and liabilities of pension funds in the UK, Europe and the US. Many will be unable to pay their pension promises in full. Most will be pushed into liability-driven investment strategies. But are they a real solution or an expensive act of desperation?
  • “We’ve made $100 billion of investments in the past few years. We have to be number one in every product, in every market. We have no choice. There’s no other way to go.”
  • Argentina’s debt default, devaluation and subsequent recovery is, along with Enron’s fall from grace, the biggest financial story of the decade.
  • “Citigroup should wipe the floor with everyone in credit derivatives. What happened?”
  • Synthetic bond is a precursor to bonds in Egyptian pounds.
  • Our December cover story, The problem with foreign exchange, has sparked debate about the structure of today's FX market. Responses to the feature are still arriving at the Euromoney office.
  • It hasn’t been the easiest of starts to 2006 for Citigroup in Asia, with continuing integration challenges at its Korean banking acquisition and difficult negotiations with existing and future partners over its China strategy [see Citigroup fails to solve the China conundrum, this issue]. Now Citi’s China strategy will need to be reconsidered after the departures of chief rainmakers Francis Leung and Wei Christianson.
  • Jollibee Bee, mascot, all dressed up to collect company's award for Best-managed consumer goods company in Asia.
  • The problems of open-ended real estate funds might pave the way for the rapid success of Reits.
  • Javier Lazaro has joined Credit Suisse as head of global markets solutions covering Spain and Portugal from Goldman Sachs’s leveraged finance group. He will report to Paul Raphael, head of European equity capital markets, and Marisa Drew and Craig Klaasmeyer, co-heads of European leveraged finance origination.
  • The number of Middle East-based hedge funds is set to increase. In January, Abu Dhabi headquartered First Gulf Bank launched the first hedge fund of significance in the region. The fund, Al Saqer (“the Falcon”), is a macro-strategy hedge fund and has a capitalization of Dh3 billion ($817 million).
  • Second-lien financings grew dramatically in 2005. Total US second-lien loan issuance alone amounted to more than $22 billion in 2005. In Europe, second-lien issuance totalled €5.75 billion in 2005, rising from €1.88 billion in 2004.
  • The Chicago Mercantile Exchange has launched a snowfall index. From the end of February, investors were able to trade snowfall futures and options based on snowfall in New York and Boston. “From municipal snow removal budgets to holiday retail sales, snowfall, or lack thereof, can have a major impact on local and regional economies,” says Scott Mathews, president of CTA WeatherEX. “Our clients will be able to hedge the expense or revenue side of the snowfall equation.” It will be a little too late for those affected by the snowstorms in New York in February. A record 27 inches of snow fell in 24 hours, costing the city an estimated $20 million.
  • As KPMG wins a $5.4 billion advisory mandate, are consultants stealing big deals from investment banks?
  • This could be just the beginning of a battle between exchanges and their users.
  • DrKW has embraced blogging in a big way. The fondness for internet opinion boards has spread from the bank’s IT staff to the rest of the bank, which now has about 300 internal web logs, used for sharing work ideas.
  • The Lehman Bond Show will now be available via podcast.
  • Bond investors are starting to clamour for extra protection as buyout risk increases.
  • Further consolidation in Latin America’s banking industry is expected on the back of strong economic growth and financial stability. Foreign banks, which were active acquirers in the 1990s, are expected to play a big part in this. Leticia Lozano reports.
  • Latin American companies are shedding reputations for irresponsible management to become competitors, and even leaders, in the global markets. So much so that some don’t even want to be considered Latin any more. Lawrence White analyses the results of Euromoney’s first survey of the best-managed companies in the region.
  • The country’s banks are successful and stable. But a small domestic market leaves a difficult choice: concentrate on building at home or seek to expand overseas. Laurence Neville reports.
  • Taiwan is desperately overbanked and the unprofitable financial sector is crying out for successful consolidation and rationalization, rather than ill-judged government initiatives. But that has not stopped foreign investors buying into the market for the first time. Nick Parsons reports
  • The market is attractive to potential foreign acquirers, but the process of acquisition is proving far from easy. Patrick Gill reports.
  • India’s distressed debt market has a problem. Specialist firms, often set up by a consortium of banks, buy the assets from one arm of a bank, package them up, and then have to sell them back to the original banks. After intense lobbying from firms such as Arcil, the Indian government has changed the rules. Niranjan Rajadhyaksha reports.
  • Foreign investors are back in Thailand to scoop up bargains. The timing couldn’t be better for a new drive to develop the capital markets but politics could get in the way of some important deals. Peter Koh reports.
  • Arcelor, the Luxembourg-based steel company that has in the past preferred not to use bank advisers, is wheeling out the big guns to defend it against the €18.6 billion ($22.1 billion) hostile bid from Mittal Steel. It has just hired Morgan Stanley, which will join BNP Paribas, Deutsche Bank, UBS and Merrill Lynch in advising it. Most of the main advisory firms are involved in the hostile bid on one side or the other. Mittal Steel is being advised by Credit Suisse, Goldman Sachs, HSBC, Société Générale and Citigroup.
  • The sale of Hotspot has prompted a torrent of speculation about the future of other ECNs. But it seems the rumours about new owners for FXall are true.
  • Cheyne Capital Management sold one of the largest-ever European arbitrage CLOs last month via Nomura. The €1 billion Cheyne Credit Opportunity CDO 1 incorporated several structural features to overcome problems that could arise from its relatively large size. In contrast to typical CLOs, which are normally half the size, 40% ramped up at launch and have around a year to complete sourcing loans, Cheyne Credit Opportunity has a two-year time period to ramp up fully. This extra flexibility will be particularly useful. The competition for leveraged loans will be greater than ever, given that an estimated 35 CLOs are operating this year, compared with about 25 last year.
  • Dave Tait has not only had a long and successful career in the FX market, but he has also climbed some notable peaks outside of the trading environment.
  • The FSA took a couple of years but the UK regulator has finally accepted the concept of covered bonds; the Netherlands will be next.
  • Reserve confirms Wachovia deal qualifies for tier 1. And that could spark over $40 billion of copycat deals.
  • Hedge fund managers are increasingly shopping around and using more than one prime broker at the same time.
  • Latin America’s development bank has to change tack as countries in the region rely less on dollar funding.
  • Regulators outnumbered the regulated at a meeting at the Federal Reserve Bank of New York on February 16. Representatives of 15 bank and securities regulators and exchanges were relieved to hear that the world’s 14 largest credit derivatives dealers had fulfilled their promise, made last October, to cut by 30% the number of credit derivatives trades remaining unconfirmed for 30 days or more by January 31 2006. The backlog, which arose from high-velocity trading and assignment by hedge funds in a market with underdeveloped systems for initial confirmation of trade details, had sparked widespread alarm across the industry. More good news: electronic confirmation has risen to 62% of trade volume, from 46% in September 2005.
  • The rapid influx of new managers to the CDO market is a staffing headache for established players.
  • It’s the time of the year, with the bonus season over, when people moves are back in swing. So far, several have caused a bit of a stir.
  • The UK government’s commitment to imminent PFI transactions appears to be wavering. Have critics of the funding strategy won the argument?
  • “Probably a good idea” was how a leading market participant described the news that the International Capital Market Association (Icma), the International Swaps and Derivatives Association (Isda) and The Bond Market Association (TBMA) have formed a Global Capital Markets Board (GCMB).
  • Financial sponsors now account for an important chunk of advisory fees, but not all banks are cashing in.
  • Oil producers strike it rich, but long-term issues remain

    The high price of oil highlights the fact that many economies are too reliant on raw materials exports, with governments creating unfavourable conditions for foreign investment through neglect or for political reasons. Florian Neuhof looks at the main drivers behind Euromoney’s latest country risk poll.
  • Hugo Chávez’s war of words with US president George W Bush has escalated, with the Venezuelan president threatening to sell his nation’s oil refineries in the US. Chávez has threatened to sell Citgo Petroleum’s refineries and divert US oil exports to other countries. “I could easily order the closing of the refineries that we have in the United States. I could easily sell the oil that we sell to the United States to other countries...[to] real friends and allies like China, India or Europe,” he told supporters at a rally last month.
  • Rio de Janeiro now offers a developing market alternative to Chicago.
  • Government rumoured to be planning new bond deal although holdouts issue remains unresolved.