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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.
  • "We are trying to actualize a market that has been very much talked about but primarily theoretical"
  • "[Gallic shrug with arms fully extended to the side and look of bemusement and disdain]"
  • 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.
  • 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 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.
  • 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).
  • 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.
  • 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.
  • 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.
  • 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?
  • 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?
  • 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.
  • 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.
  • Citi, BAML and JPMorgan might need to issue subordinated debt to meet potential OLA requirements.
  • Gold and copper lose their lustre; Dynamic strategies replace index plays
  • Jamie Dimon’s dual role at JPMorgan has lost its sparkle and is past its sell-by date.
  • FSA approves Crowdcube, appoints crowdfunding officer; US P2P lenders take off, endorsed by industry stalwarts
  • By accusing Standard & Poor’s of civil fraud the US Department of Justice has removed the rating agency’s First Amendment protection.
  • 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
  • Weak 2012 earnings reflect deleveraging that’s now complete; the bank will cut costs and increase lending
  • Investors are probably being too bullish about the size and buying power of Africa’s middle class.
  • Rosneft signs second tranche; Maroc Telecom next
  • The balance-sheet re-leveraging involved in big M&A deals threatens companies’ credit standings and thus their bondholders’ paper.