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March 2009

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  • The 2009 guide to Technology in Treasury Management (PDF)
  • Fitch Ratings downgraded its ratings for Russia for the first time in more than a decade as a result of falling oil prices, dwindling foreign currency reserves and record capital flight. Fitch cut Russia to BBB from BBB+ and maintained its negative outlook. "The scale of capital outflows and the pace of decline in Russia’s foreign exchange reserves have materially weakened the sovereign balance sheet," says Ed Parker, Fitch’s head of emerging markets in Europe. "The downgrade reflects the negative impact on Russia from the fall in commodity prices and the dislocation to global capital markets that has left Russian banks and companies struggling to refinance debt."
  • If you have nothing, so do I.
  • The glitz and glamour associated with the Oscars was expected to take a hit this year. As the economic climate continues to deteriorate many thought Hollywood would want to show it was in touch with the real people who are having a difficult year – something their similarly wealthy counterparts on Wall Street have been so bad at doing.
  • With Latin America’s equity markets still shut, some cash-strapped corporates will be able to turn to the debt markets to raise much-needed funds, although opportunities will be limited and only selective credits will have access.
  • On February 15, Venezuelans went to the polls to vote on a constitutional amendment eliminating term limits for public officials, including the president. The result was a victory for Hugo Chávez, the president, with 54.3% of the electorate voting in favour of the change. The result means that Chávez could rule his country for at least another decade. In his speech after the results were announced, Chávez avoided his usual jubilant claims for sweeping economic changes, promising to focus on more immediate issues. Rampant crime, corruption and inefficient institutions that waste large sums of money are the top priority this year.
  • Rio de Janeiro came in a close second to New York for Madoff losses according to locals in the Brazilian city. Reports continue to emerge that despite the big losses few customers will report them because much of the invested money was undeclared. "Go to the country club in Rio and the only conversation is about how much each person has lost," says a local banker.
  • The International Finance Corporation has teamed up with Japan Bank for International Cooperation to launch a new recapitalization fund for struggling private-sector banks in the emerging markets.
  • Today few banks in Europe could raise equity capital from private sources. Governments are now the leading providers and will continue to be so for some time. But Swedish banks are hoping to complete a little flurry of conventional rights issue recapitalizations this month, in a reminder of how equity capital markets used to work in the days before banks in Europe resorted to taxpayers to cover their losses.
  • Corporate China’s drive to secure supplies of natural resources while they are available at low prices will be a big source of investment banking activity in Asia this year, according to bankers in the region. Aside from a record-breaking January in the debt market there has been little capital markets activity in 2009. However, several multi-billion dollar deals from China in the past few months suggest that its leading companies are aggressively seeking to take advantage of their cash reserves to buy assets across the world. These deals are fraught with political sensitivities, however, and the current crop will be closely monitored by potential buyers, sellers and advisers that might be considering joining the rush.
  • "I hope they’re not more of the same. I hope you’re smarter than that"
  • The partly state-owned Brazilian oil company sees no conflict between profitability, state ownership and social responsibility, according to its chief financial officer, Almir Barbassa. Jason Mitchell reports.
  • Acquisitive stock exchange operator Wiener Börse is considering a possible bid for a stake in Croatia’s Zagreb Stock Exchange, a move that would further boost its claim to be the leading bourse for investors looking for exposure to central and eastern Europe. Wiener Börse official Beatrix Exinger told Euromoney that there had not been any formal discussions about a takeover offer but added: "Generally we are interested in making strategic investments in exchanges throughout the entire CEE region and that would naturally include the Zagreb Stock Exchange as well, but there have been no detailed talks as yet."
  • As gas exports from Qatar provide the country with a buffer from the Middle East’s financial crisis, investors are expected to favour Doha over troubled Dubai. Already, some regional and global banks are transferring staff from Dubai to Qatar’s capital.
  • As part of a government reshuffle, Hamad Saud Al Sayyari, governor of the central bank of Saudi Arabia, has been replaced by the vice-governor, Muhammad Al Jasser.
  • More heat than light was generated when UK MPs interrogated hedge funds. Neil Wilson reports.
  • One region that will feel the force of a deep recession in the US is central America. However, recent financial reform could help soften the blow to an extent. Two of the region’s finance ministers tell Euromoney about their hopes and fears.
  • Legislation to stop coupon payments could have wide consequences.
  • Royal Bank of Scotland is closing its operations in Kazakhstan as part of its business reorganization.
  • Poor Citi. Not even sport can provide the beleaguered bank with an escape route from its woes. Just as RBS is coming under attack in the UK for spending £200 million on sponsorship contracts with top sportsmen such as Sachin Tendulkar, Jack Nicklaus and Sir Jackie Stewart weeks before it got a government bailout, Citi is facing flak for a deal with the New York Mets after receiving $45 billion of taxpayers’ money. US lawmakers have criticized Citi for continuing with a $400 million sponsorship deal for the Mets’ baseball stadium even as the bank’s future continues to be in doubt. Citi and the Mets deny that Citi Field stadium will be funded by government money, although some wags reckon the stadium should be called Fed Field.
  • Prytania Investment Advisors has hired Paul Levy as a partner based in London. Levy is an experienced structured credit banker, having worked at Morgan Stanley, Deutsche Bank and Merrill Lynch – where he was head of exotic credit structuring. Levy will focus primarily on assisting Prytania’s clients in managing the risk in their structured finance and credit portfolios, some of which are managed directly by Prytania. Prytania’s advisory business has attracted substantially greater client inquiry since Lehman Brothers defaulted in September 2008. Its financial institutional clients are looking at better understanding and managing retained credit risk, and Levy will help facilitate that given his expertise – especially in investment-grade synthetic credit.
  • 1 trillion the yen value ($10.6 billion) of the corporate bonds the Bank of Japan says it will buy to try to inject liquidity into the stagnating market. The bank will buy bonds rated A or better held by banks in an effort to increase lending from financial institutions.
  • The recession in the US economy is beginning to bite in central America, leading to a big slowdown in remittance flows that are vital to the region’s health. Guatemala and El Salvador, in particular, are most vulnerable to a drop in the growth in money flows from relatives in the US and elsewhere.
  • It seems that no area of life can remain untouched in this financial downturn – not even the English language.
  • Despite their mounting woes, several US and European banks claim that they remain committed to Latin America, especially Brazil, according to their regional heads, although some are paring down their presence.
  • The eurozone’s advantages for both strong and weak members far outweigh any disadvantages that might incline countries to walk away.
  • "If I was Bob Diamond I’d offer to pay Fred Goodwin’s pension because if he hadn’t bought ABN Amro, all the senior Barclays guys would be out of a job"
  • Temasek’s decision to replace Ho Ching with Chip Goodyear as chief executive raises a host of questions about the future direction of Singapore’s sovereign wealth fund.
  • While corporate bond issuance in Europe has got off to a record start for the year, in Asia another trend is dominant: debt buybacks.