March 2015
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LATEST ARTICLES
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“Issuers can tap the US private placement market but we want to get to the next leg down. In the long term European corporates want their own source of demand”
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Jonathan Hill has eschewed grand ambition for practical reality in his CMU green paper.
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Dubai’s success as a financial centre depends on whether or not it has succeeded in its aims. And what were they?
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Successive crises have taken their toll on the private-equity industry in emerging Europe and enthusiasm for the region has waned. Nevertheless, its combination of strong growth and opportunities for convergence with western Europe continues to attract a hard core of supporters.
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Belarus’s leaders are promising a dramatic package of reforms that could overhaul the country’s sclerotic command economy and reduce its dependence on Russia. The only trouble is, no one believes them. Mixed messages to the bond markets haven’t helped.
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The country hopes a deal can revive its stumbling economy, but it will be hard to stick to the IMF’s conditions when the 2016 elections are so close at hand.
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The country’s banking industry is growing fast. New laws designed to encourage foreign investment make it easier for offshore firms to wholly purchase local lenders. But there are plenty of barriers to entry aside from regulation.
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The investment banking arm of Banco Espírito Santo’s search for an investor had begun long before the shenanigans at its parent bank began to come to the surface in the summer of 2014, according to Francisco Cary, BESI’s deputy CEO and chief financial officer.
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With equity and now debt funding getting scarcer in public markets, Latin American corporates must think of other options. For longer-term investors, and for those with a strong appetite for risk, the region’s troubles are a rare opportunity.
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It took the collapse of Banco Espírito Santo, rather than the eurozone crisis, to redraw the map of Portuguese banking. Will the revised landscape show Iberian consolidation, or a new Chinese foothold on the continent?
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HSBC is pushing hard in its drive into Latin America’s markets. From a DCM foundation, it is moving into other areas, though competition will be fierce.
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Boosted by a rich run of privatizations, the Turkish M&A market burst into life last year, hitting the highest total value of deals for close to a decade. The hope for 2015 is that the same feat can be repeated. In an election year, anything is possible.
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The region’s local debt markets are at a crucial point. International interest is growing. Investment banks are building up. But with one exception, domestic supply and demand remains limited. Can other countries follow Mexico’s lead? Euromoney investigates the dynamics of Latin America’s main bond markets.
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Private placements have usurped securitization as Europe’s great SME financing hope. The financial markets support EU commissioner Jonathan Hill’s Capital Markets Union initiative to promote it. But the thriving US market will be hard to compete with, let alone replicate. Which leaves two questions: Can the EU build it? And, even if it can, will issuers and investors come?
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Toshifumi Murata of Latin America for Bank of Tokyo-Mitsubishi UFJ (BTMU) is confident of continued growth.
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Tarpon takes control of Abril for R$1.3 billion; new regulation might limit numbers of higher students.
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Needs credibility before returning; wants to avoid punitive pricing.
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Private equity firms staff up; bank versus non-bank competition increases; talent ‘harder to come by’ than in 2008.
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Investors forced out along the curve; issuers play currency and duration game.
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Retail banks to be hit hardest; corporate clients set for higher charges.
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Having a buyside full of risk-averse investors is a common theme among Latin America’s local debt capital markets but Colombia takes this to the highest level. Unless you are locally-rated AAA or AA+ then forget about the debt markets – bank debt is for you.
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Peru’s economy has been averaging more than 5% growth a year for the last 10 years but that growth has not, as yet, been matched by corresponding growth in the volume of bonds issued in its local debt capital markets.
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Argentina’s relative seclusion from the international capital markets has meant a lot of volume has built up in the local markets.
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Bring up the topic of Chilean financial markets to a financier with a regional role and more often than not the adjective they use is 'sophisticated'. However, while the country has the longest-standing investment-grade credit rating and has strong, well-capitalized banks, that isn’t synonymous with sophistication.
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Rabo and BPCE pioneer samurai deals; Japanese investors see big risks at euro banks.
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Basel wants end to use of credit ratings; further regulatory changes deplored.
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Biggest-ever bond sold in two tranches of 10 and 15 years, underpinned by robust banks.
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The record books have multiple new market landmarks to note so far in 2015. Investors should be wary, it will be a rollercoaster ride and there may be nausea ahead.
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Political pressures and lack of growth have put the European project under threat. Reform is urgently needed to set Europe back on course.
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Brazil has all the ingredients for successful local markets, but it keeps failing to deliver.
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For many reasons Mexico is the envy of its emerging market peers. The next step in its development will require attracting more international investors, but there are big challenges ahead.
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International investors are increasingly looking at Latin America’s local currency markets, but foreign exchange volatility makes the buyside wary of losing any potential gains, as has happened with some recent deals. The mixture of currency and credit risk may be too heady a cocktail for some.
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The troubles at Petrobras have hurt all of Brazil’s borrowers but bankers in the country think the worst is now over and that the bad news has been priced in. The proof will come when issuers return to the markets, but who wants to go first – and can the local markets produce the goods?
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If a communications team is faced with the challenge of spinning the closure of a business line, it can get weird.
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Belarus’s first deputy economy minister Alexander Zaborovsky insists that policymakers are keen to boost the share of the private sector in the economy through the development of new businesses. This meets with a high degree of scepticism locally, given the government’s record on the treatment of entrepreneurs.
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From the pariah of Peregrine to thought-leader for a new type of finance, Andre Lee’s re-emergence is an example to those whose careers the financial crisis cut short.
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Innovation is held back by the gap between the old financial system, investing and lending primarily against hard assets, and the new knowledge economy that depends on intangible assets. A new type of bank could benefit SMEs seeking to develop innovative products. It could also give investors the chance to redeploy speculative capital more productively. But who is the driving force behind Snowflake?
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CEO Stuart Gulliver helpfully explains HSBC’s former practice of using a Swiss bank account in the name of a Panama registered corporation to take bonus payments for the Hong Kong bank.
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Before revelations about HSBC’s private bank, its chairman and CEO were seen as a winning combination. As the fallout becomes increasingly political, could their relationship be coming under threat?
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After the events of Black Thursday, the CEO of crest-fallen FXCM, the FX broker, discusses the shake-up in its business model, the future for retail flows, and lashes out at the institutional FX market structure.
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Standard bond-trading language project retains support of dealer banks as it enters network-building stage
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Inside the honeycomb: is this the future of bond trading? As bond market participants face up to the reality of diminished liquidity, low turnover and heightened risk of price gapping, the search for solutions is veering away from new trading protocols and exchange-like platforms towards providers of high quality pre-trade information. Do Algomi’s Honeycomb and MTS’s tie-up with B2SCAN point the way ahead?
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Malaysia’s quest to create a regional champion with a large Islamic bank came to an end when a plan for a three-way merger was scrapped. The country’s second-largest lender by assets is now retrenching to boost returns and eyeing strategic acquisitions.
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Angola could become the first African sovereign bond borrower since the great oil price crash this year in a debut deal that will set the tone for frontier-market debt.
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What goes up must come down, even the renminbi. Having appreciated by more than 30% since 2008 against a trade-weighted basket, there is growing consensus that 2015 will see further falls in the Chinese currency.
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Hungary’s government commits to reduce bank taxes, while a proposed stake in Erste Bank shows ‘we’re all in the same boat’, says the minister behind the plan.
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Prompted by new SEC rules, the largest prime money market fund in the US will switch to a government mandate. The move might herald the transformation of the $1.7 trillion prime MMF industry.