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March 2008

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LATEST ARTICLES

  • Published in conjuction with: ABN Amro - BNP Paribas - Citi - Commerzbank - Deutsche Bank - Fortis - HSBC - ING - Rabobank - SEB - Société Générale - Standard Chartered
  • Julius Baer plans to undertake an IPO of its US asset management business later this year, aiming to raise $1 billion. According to filings with the SEC, the US arm also intends to launch hedge fund and private equity vehicles. Its private equity funds will focus on central and eastern Europe.
  • The main clearing houses in Europe have had a busy few years.
  • Marcus Browning has resigned from Citi, where he recently took up a new role to build a proprietary team to trade volatility. He is believed to be headed for a position on the buy side. "We are disappointed to see Marcus leave, he has been a profitable trader for us and he has been instrumental in building FX options into the strong business that it is today at Citi. But we understand that he has long harboured a desire to work on the buy side, and we wish him success in the future," says James Bindler, global FX options head at Citi.
  • 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.
  • "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..."
  • Egypt’s banking system is undergoing wide-ranging reforms designed to make it more competitive. Have the lessons from the past finally been learnt?
  • Foreign banks continue to eye expansion opportunities in Kazakhstan, despite the cloudier outlook for the central Asian republic’s financial sector. South Korea’s Kookmin Bank is in talks with Bank CenterCredit, the sixth-largest Kazakh bank, with a view to taking at least a 30% stake. UniCredit is looking to finalize its $2.2 billion purchase of ATF Bank, Kazakhstan’s number four player. But the Italian bank has become embroiled in a legal dispute with US hedge fund QVT Financial, which has accused it of abusing minority investors’ rights. Finally, a Russian investment bank is reported to have built a 10% to 15% stake in the country’s largest bank, Kazkommertsbank, on behalf of an unknown party, prompting further takeover speculation.
  • Large Latin American companies with substantial exposure to foreign investment are adapting rapidly to the need for good corporate governance and receptive investor relations. But there is still a hard core of resistance to change from family-centred businesses. John Rumsey reports.
  • Understanding the mark-to-market meltdown
  • 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%.
  • New Bramdean fund looks to bring new players to alternatives.
  • ABCP conduits suffered a reputational battering as a result of last summer’s liquidity freeze in the commercial paper market. However, if events in Mexico are anything to go by the concept has survived. In late February, Deutsche Bank was poised to launch the first Latin American ABCP conduit in Mexico, a diversified multi-seller vehicle dubbed Aztlan. Named after the mythical place of origin of the Aztec people, Aztlan has been set up to invest in various peso-denominated receivable pools, including trade receivables, future flow receivables, mortgage loans and consumer loans. Crucially, given the problems that this and the structured investment vehicle sector have wrestled with over the past six months, the conduit is supported by a 100% liquidity facility from Deutsche Bank. "I think that one of the most compelling features about this structure, unlike an extendible programme or a SIV programme, is that this conduit is afforded a traditional liquidity facility," says Alberto Santos, a senior director at Fitch Ratings. "The lack of liquidity facilities was at the forefront of the funding issues experienced during the second half of 2007. The structural features within this conduit, including the liquidity agreement, are expected to mitigate market disruption or timing risk for this conduit. Typically, liquidity facilities can be used to pay maturing commercial paper or to cover timing mismatch between assets and liabilities of a multi-seller asset-backed commercial paper conduit."
  • The UK Financial Services Authority has questioned the spread of derivatives-based trading strategies, such as 130/30, by traditional long-only managers. The increasing use of derivatives poses a "range of risks", warns the FSA.
  • 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.
  • With no sub-prime problems, real estate bubble or complex credit portfolios to worry about, the country’s banking sector should be a relative safe haven. But while investors remain receptive to their covered bonds, banks are finding liquidity scarce. Peter Koh reports.
  • It seems they may be using support to grow balance sheets rather than to roll funding.
  • Tough talk by the regulators might bear fruit for the monolines.
  • Perhaps unsurprisingly, given the Japanese reputation for electronic gadgetry, Japanese institutional equity investors are embracing electronic trading in a big way, according to a survey by Greenwich Associates.
  • Distressed seems the right route to take.
  • Operating company securitizations had to take a back seat to real estate as UK corporates rode the real estate boom in recent years. But with commercial property valuations in free-fall and the hybrid CMBS market dead in the water are opco/propcos about to make a comeback?
  • 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.
  • Richard D’Albert, global head of the securitized product group and CDOs at Deutsche Bank is not to become global head of the institutional client group at the European bank after all. Euromoney heard that D’Albert was taking on the global sales role Jim Turley’s decision to take a sabbatical.
  • Infrastructure financing has become synonymous with Brazilian president Lula’s second-term government. As the country enters the first stage of its largest ever hydroelectric project there is a growing demand for funds that the local market is struggling to source. Chloe Hayward reports from São Paulo.
  • As an agreement between FXall and ITG shows, multi-asset platforms can be created virtually.
  • Central and eastern Europe is by no means immune to financial woes, strong economic growth levels notwithstanding.
  • The effects of the sub-prime crisis are spreading and could cost 2.5% of world GDP. Emerging market economies will not be immune.
  • Latin American bankers appear confident that the region can continue to avoid the worst of the US contagion.
  • The UK government’s actions and intentions remain confused. It is time to end the uncertainty.
  • Reserve managers are unlikely to suddenly adjust foreign currency holdings and latest IMF data suggest they will not chase the euro higher.