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March 2013

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  • Trying to change cultures within banking institutions is never easy, which is why Barclays’ new chief executive is taking a hard and seemingly Soviet-era approach at the UK bank. The message is clear: Barclays would now like to be seen as a stodgy commercial bank run by a proselytizing Brit.
  • Markets have felt the first tremors of the big bond market sell-off to come. They didn’t like it. As the date of the Fed exit from quantitative easing draws closer, the fear of a dislocation worse than 1994 grows.
  • Astonishing investor inflows into the loan market on both sides of the Atlantic since the beginning of the year have raised the tantalizing prospect of the CLO market returning to Europe.
  • Ever since Banco Santander was named Euromoney’s bank of the year for 2012, I have been keeping a wary eye on the Spanish lender, which is also Europe’s largest bank. The share price bottomed at approximately €4 around the time of the award. This was the same level reached in March 2009. Since last July, Santander shares rose, phoenix-like, to nearly €6.50 in late January 2013, before falling back a bit. Interestingly, the chart of Santander’s stock price is similar to that of the overall Spanish market (the IBEX 35) which is probably not surprising.
  • I am rapidly becoming an African aficionado. Maybe Barclays’ Jenkins is on the right track in targeting Africa as a key region of growth for Barclays. A mole was at the recent South African mining conference Indaba in Cape Town and reports record attendance and a febrile atmosphere of deal-making.
  • I would like to refrain from carping from the sidelines, but I can’t help myself. Is there not the tiniest bit of hypocrisy in Saint Antony’s finger-wagging? After all, Jenkins was a close colleague of his now unpopular predecessor, Bob Diamond. Before ascending to the chief executive throne, Jenkins ran Barclays’ retail and business banking division. He was appointed to this role in November 2009 and thus became caught up in the tail end of the payment protection insurance scandal. Banks were found to have been selling insurance to clients who had no need of it. To date, Barclays has set aside some £2.6 billion to compensate customers.
  • "[Gallic shrug with arms fully extended to the side and look of bemusement and disdain]"
  • "We are trying to actualize a market that has been very much talked about but primarily theoretical"
  • Euromoney’s private banking awards dinner, held on February 21 at Plaisterers Hall in London, celebrated not only this year’s winners but also 10 years of the survey.
  • Euromoney is never shy about trumpeting a good cause in the name of revivalist capitalism, so this month we bring you the Hellenic Entrepreneurship Award (HEA).
  • Turkey has grown by leaps and bounds for more than a decade. Yet its stock market remains dependent on foreign capital and successful IPOs are rare. Can the country finally succeed in adding depth to its capital markets?
  • Wading through the pages and pages of documentation associated with litigation stemming from the sub-prime mortgage crisis always throws up entertaining email exchanges between bankers. The infamous "Boy, that Timberwo[l]f was one shitty deal!" from Goldman Sachs’s Tom Montag has gone down in industry folklore, as have comments from the previously fabulous Fabrice Tourre.
  • There has been a steady increase in international Latin American debt issuance recently. But is this masking a trend towards local-currency issuance, specifically in local markets?
  • Mining has been central to Africa’s resurgence and an associated wave of international listings. But shareholders are now pressing the big mining companies to conserve cash. Amid talk of strikes and nationalism, can the sector handle a less voracious China?
  • Bankers insist they want to lend more to the country’s SMEs, by far the largest private-sector employers in the nation. In the meantime, they are concentrating on growing their more profitable overseas businesses.
  • Swordfish Research founder and bond market research guru Gary Jenkins promised his regular readers a treat in February. A novel – a romantic comedy to boot – might not be exactly what they had in mind. But that is what he has produced: his first novel, Tom’s Guide Book to Romance, is now available on Amazon.
  • A burst of big acquisitions has sparked fresh talk of a new leveraged buyout boom. But, even with ripe debt financing conditions, stockpiles of cash and rising equity valuations, both private equity firms and their advisers doubt there’s a big slew of further jumbo deals in the pipeline.
  • BBVA’s Latin America model relies heavily on Bancomer, its Mexican subsidiary. The good news for the Spanish parent is that Bancomer’s finance director expects that Mexico’s rosy outlook should help offset domestic weakness.
  • Regulators are belatedly showing signs that they are thinking about potential market abuses from first principles. The broadening of the Libor investigations into the role played by interdealer brokers, a case against Nymex and two employees for divulging flow information and the pursuit of insider-trading allegations against employees of hedge fund SAC are all examples of regulators tackling potential abuse from the important principle that if it looks like a duck, swims like a duck and quacks like a duck, it may well be a duck.
  • The currency war that many feared as an inevitable accompaniment to the credit crisis played out as more of a paint-ball contest until the recent sharp slide of the yen. The violence of the yen fall of roughly 20% reawakened fears of a wave of competitive devaluations.
  • Retail investors targeted; liquidity constraints remain
  • Rosneft signs second tranche; Maroc Telecom next
  • Investors are probably being too bullish about the size and buying power of Africa’s middle class.
  • Weak 2012 earnings reflect deleveraging that’s now complete; the bank will cut costs and increase lending
  • Strong wealth management focus; Main push in Brazil and Mexico
  • First Eurolira deals; Eurorouble bonds in vogue
  • When Barclays announced its fourth-quarter and full-year 2012 results last month these were entirely overshadowed by the strategy review from new chief executive Antony Jenkins. In the aftermath, analysts and investors bemoaned or applauded, depending on their biases, the decision to retain the investment bank largely unscathed and re-emphasize its importance and particularly that of the FICC division to the group.
  • Regulators are beginning to express concerns about a potential collateral crunch causing a new market seizure. One solution might be to increase the use of SDRs.
  • Biggest post-crisis Middle East IPO; doubles ISX market cap