In the past year, fees on emerging-market bonds have plunged from 50 basis points or more to below 10bp. The fee war is taking its toll on emerging-market teams, but is it temporary or permanent? • Julian Evans reports

Investment banks are eager to do debt deals involving derivatives with Italian local authorities. Such a high level of competition is good news for the borrowers but they are also facing closer regulation of their use of innovative structures. • Jennifer Morris reports

Issuer: France Telecom Size: e16 billion Bookrunners: ABN Amro Rothschild, Goldman Sachs, BNP Paribas

Investors are still piling into US corporate bonds but there’s little sign of improved credit quality to justify this desperate enthusiasm. What’s more, interest rates must rise sooner or later. • Kathryn Tully reports

Never let it be said that communists are out of touch with market reality - North Korea, sensing an opportunity to finance itself is to issue its first bond. Ruling party daily Rodong Sinmun says the bond issue "is an important measure to raise funds" to "crush US imperialists", a pitch that is sure to play well with investors.

Sovereign debt restructuring has been hotly debated for years. Paradoxically, though, two of the elements most fought over – collective action clauses and exit consents – seem now to have been accepted with equanimity. • Felix Salmon reports

Now that the military battle in Iraq is over, my sense is that equity markets want to go up. But I don't believe that this is the start of a new bull market. It is just the eye of the storm of the secular bear market. The bounce will eventually die down and the bear market will reassert itself. We have not seen the lows yet.

Uruguay is seeking to push out the maturities on its bonds to give it time to get its economy back in shape before having to repay its foreign debt. It's doing this by means of one huge exchange offer, with which it is trying to swap all of its outstanding bonds for similar bonds of longer maturity.

Long Yongtu, China's former vice-minister at the finance and economy ministry and the country's chief negotiator for its entry into the WTO, might want to forget his performance at Credit Suisse First Boston's recent investment conference in Hong Kong. It could haunt him for a long time to come.

A restructuring of Iraq's financial obligations is arguably the most important initiative that must be undertaken in that country next to providing humanitarian assistance.

Source: www.breakingviews.com is Europe's leading financial commentary service.

Who says economists are dull? Three of Wall Street's finest, and most bearish, took part in an early-morning debate about the impact of the Iraq war on the US economy at the Council for Foreign Relations in New York last month. At times it was like stand-up comedy, with Morgan Stanley chief economist Stephen Roach as the main act.

After years of trying to make its mark on Wall Street, Deutsche Bank is finally taking up residence there. There's only one problem - the staff don't want to go.

The rise of UBS to the top of Euromoney's foreign exchange market share ranking this year proves how ill advised it is for any bank to declare itself the master of any financial market. Even in those sectors where a handful of banks appear to have achieved unassailable pre-eminence, newcomers can always break in. Seats at the top table are never reserved in perpetuity.

One key clause in Uruguay's proposed collective action clauses closes a loophole that Mexico left open in its own bonds: the question of whether the issuer could use exit consents on the payment terms of bonds with CACs. Exit consents, even on non-payment terms of bonds, are generally considered coercive and rather bad manners, even if a necessary evil for countries seeking to restructure their bonds.

For two months Hong Kong's 6.8 million residents have been at the centre of the Sars (severe acute respiratory syndrome) outbreak, better known across the border in mainland China as "strictly avoiding realistic statistics". But the crisis now seems driven more by fear and hysteria than actual risk of infection.

Block trades help to make ECM bankers look busy in quiet times. But their success rests on a knife edge. • Peter Koh reports

Issuer: France Telecom Size: e16 billion Bookrunners: ABN Amro Rothschild, Goldman Sachs, BNP Paribas

New technology is being developed to make hedge funds more transparent to investors. Risk management system provider Riskdata and Equalt, the alternative investment arm of Crédit Agricole Indosuez, are developing software to enable institutional clients to simulate the risk profile for different combinations of funds before they invest. They are working on an application for Riskdata's online risk management system. Initially it will enable investors to test how the Equalt fund would fit with their portfolios. "It's like opening a window on what we have on the book without disclosing actual positions," says Christophe Turpault, manager of Equalt's fixed-income arbitrage fund. This gives institutional investors more transparency about the risk of including funds in their portfolios. At the same time it allows the manager to protect the funds' positions.

Source: www.breakingviews.com is Europe's leading financial commentary service.

Source: www.breakingviews.com is Europe's leading financial commentary service.

After Mexico came to market successfully with its collective action clauses (CACs), most observers reckoned that the IMF's plans for a sovereign debt restructuring mechanism (SDRM) would not be taken any further. The US Treasury in general, and undersecretary for international affairs John Taylor specifically, was known to be a zealous proponent of CACs, and now that the market had managed to adopt them there was no reason to threaten it with SDRM.

Retail investors dismayed by the dire performance of straight equity and bond funds look to be ideal customers for hedge fund products. Some national regulators have recognized this and liberalized marketing rules. But it’s not clear that the sector can sustain mass investment. • Julie Dalla-Costa reports

Investor demand for US

Last month HS Securities of Japan secured the 100% purchase of Agricultural Bank of Mongolia when its head, Hideo Sawada, delivered $6.85 million to Ulaanbaatar.

The term "black box" investing has often been applied to quantitative fund management, though it is seen by its practitioners as a somewhat pejorative description. Whatever black boxes they have at BGI, they certainly seem to work.

The history of legislation on banking foundations in Italy is not a happy one. Successive governments have tried to stamp their mark, with the aim of eroding the foundations' power. This government is no different. Finance minister Giulio Tremonti has tried to wrest a bit more influence from them and next month, or perhaps the one after, could be the moment of truth. That's when the constitutional court will present its decision on whether the foundations must sell the shares they hold in banks. It isn't difficult to see why what these bodies do interests the government. Between them, the 89 foundations hold almost e40 billion in assets, including big stakes in Italy's banks. This ownership dates back to 1990, when the government decided to split savings banks into two in recognition of their different and sometimes conflicting functions. One body - the bank - became a joint-stock company responsible for financial operations. The other - the banking foundation - retained charitable status and a social role, maintaining cultural attractions and historical monuments for example.

In a period when panics have outweighed optimism among investors, the Sars epidemic is just the latest in a series of shocks that have cast doubt on Asian companies’ ADR prospects. • Chris Cockerill reports

The Indian stock markets fundamentally reassessed Indian information technology stocks last month. Jolted by a sharp fall in profit margins and a profit warning for the next fiscal year from Infosys, the bellwether for Indian IT companies, the stock sank. The market capitalization of Indian IT stocks has shrunk by over a third this year to Rs662.8 billion ($14 billion) on April 24, tipping the 30-share Bombay Stock Exchange Sensex to a six-month low. That is likely to lead to the postponement of an initial public offering by Tata Consultancy Services, the biggest exporter of Indian software services, which has been trying to list for over a year now.

Barclays' appointment of investment banker Bob Diamond as chairman of Barclays Global Investors last summer indicated the group's commitment to fund management. But can BGI, which only contributes a fraction of Barclays' profits, gain the recognition it wants?