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March 2008

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  • Published in conjuction with: ABN Amro - BNP Paribas - Citi - Commerzbank - Deutsche Bank - Fortis - HSBC - ING - Rabobank - SEB - Société Générale - Standard Chartered
  • Two of the leading banking groups in central and eastern Europe, Austria’s Raiffeisen International and Italy’s UniCredit, have demonstrated that there is continued investor appetite for structured finance assets from the region with the launch of pioneering transactions.
  • Credit Suisse is building its investment banking presence in the Andes. The Swiss house is adding an executive in Bogotá and is on the lookout for a person in Lima to bolster client coverage. The group has been aggressive in the region for the past 12 months and wants to consolidate its position. Credit Suisse took part in a series of high-profile deals in 2007, including the $2.8 billion privatization IPO of Ecopetrol, as well as deals for some first-time issuers such as Peruvian fishmeal company Copeinca.
  • Richard Herman has moved across from his role as European head of debt sales to become Deutsche Bank’s global head of sales following Jim Turley’s decision to take a sabbatical and focus on rugby coaching. The bank has also announced that Mark Carrodus has stepped down from his position as global head of FX spot and options at Deutsche Bank for personal reasons. Carrodus, who is returning with his family to New Zealand, will be replaced by Rob Mandeno, who coincidentally is at present based in New Zealand. Mandeno will move to London to take up his new role.
  • China’s ICBC, the world’s biggest bank by market capitalization, has been granted a licence to operate in the Qatar Financial Centre. This is ICBC’s first outlet in the Gulf, although in September 2007 the bank’s president indicated that a branch was planned for Dubai. Activities at the Qatar branch will include wholesale and investment banking, as well as asset management, consulting and trust services.
  • Since launching in 2007, Chi-X, the pan-European multilateral trading facility run by Nomura’s Instinet, has made notable inroads into the market for trading German stocks, regularly trading more than 15% of the daily turnover of blue-chip companies such as BASF. At the same time, however, Xetra, Deutsche Börse’s order book, has increased its market share of domestic trading to a record 99%.
  • The record number of ratings downgrades in structured finance has fundamentally altered the market’s dynamic.
  • Structured products debate: presents a range of new challenges for providers and distributors of structured notes. Representatives of leading structured products houses discuss those challenges, and the opportunities.
  • Hugo Chávez is trying to commit Venezuela to 21st century socialism. In the meantime, private financial services are booming. Buoyed by the oil price, Chávez’s policies keep pumping out money. But can left-wing policies and capitalism work an economic miracle in the long term?
  • Inflation, far from being a thing of the past, is back in the forefront of investors’ and issuers’ minds. The increased use of innovations such as liability-driven investment means a rise in demand for inflation-linked products. How are the markets responding?
  • Exchange-traded funds backed by physical gold are to be launched on the Tokyo Stock Exchange, following last August’s debut on the Osaka exchange of ETFs backed by bonds linked to the price of the precious metal. Japan’s investors have long had an affinity for gold: it is the only country where buyers of gold-related options contracts frequently exercise their right to delivery, according to Itsuo Toshima, regional representative of the World Gold Council. It is also the only country in which gold accumulation plans, whereby investors gradually acquire small amounts of the metal through diligent monthly payments of as little as ¥3,000 ($30), have succeeded.
  • The Indian stock market is in free fall, but on the sub-continent that story has had to take second billing to the forthcoming Indian Premier League 20/20 cricket tournament set to take place in April.
  • Banker: "We looked at SG, but the integration would have been very difficult and, in any case, the French don’t like to sell to foreigners"
  • Brazil is notorious for many things, caipirinhas, carnival and beautiful beaches... but in the mind of one Euromoney journalist Brazil also breeds a special type of PR who can invent some of the most original excuses for delays to meetings.
  • The internet campaign to raise €5 billion to save the career of rogue trader Jérôme Kerviel, launched on social networking site Facebook, has got off to a slow start, with only 2,095 members so far having pledged €1 each towards the cause.
  • Anyone who follows the travails of England’s football, cricket and rugby teams should easily have predicted Northern Rock’s troubles.
  • "On the day the Jérôme Kerviel story broke, we had two options for the lead story on the main news bulletin: SG, or the official inquiry’s report on the maltreatment of Iraqi prisoners by British soldiers. It had found that the abuses were isolated incidents rather than systematic failures. A bit like SG claimed..."
  • Marking everything that is complex down to zero, because markets are illiquid, does not seem to be a particularly equitable or sensible way of going about things. And that’s before you even consider the way the marking malaise is contributing to systemic risk.
  • Latin American bankers appear confident that the region can continue to avoid the worst of the US contagion.
  • Chinese banks face a potential corporate defaults crisis for the first time in five years.
  • Fitch’s proposed new methodology will tighten CDO ratings, and Moody’s is considering abolishing its current ratings scale altogether.
  • Private placements are becoming an increasingly common route for emerging market companies seeking to tap global debt markets.
  • Anticipation of the much-discussed but now postponed launch of the European residential mortgage-backed securities index (ERMBX) is behind violent swings in spread levels on single-name credit default swaps on RMBS tranches. Markit, ERMBX’s owner, announced that the index’s debut has been delayed because of market volatility. That volatility, in fact, has been caused by buyers of protection on single-name CDS referencing prime RMBS AAAs, say market participants.
  • The UK government’s actions and intentions remain confused. It is time to end the uncertainty.
  • Tough talk by the regulators might bear fruit for the monolines.
  • The Japanese megabanks claim there are no shocks to come on the sub-prime losses front. If true, it’s a big leap forward for transparency.
  • It seems they may be using support to grow balance sheets rather than to roll funding.
  • As an agreement between FXall and ITG shows, multi-asset platforms can be created virtually.
  • Six months into a credit crunch there are few signs of an improving outlook for non-government bond markets. It is a signal equity investors would do well to heed.
  • Amid all the bad news surrounding the world’s best-known banks, one institution can hold its head high after its latest results.