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May 2006

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  • Goldman Sachs has reshuffled its Latin American investment banking team by naming Eduardo Centola and Martin Werner as co-heads.
  • Fitch Ratings has downgraded its rating for the Islamic Republic of Iran from BB– to B+, to take account of what it calls the “escalating confrontation between Iran and the international community over Iran’s nuclear programme.” Although it contends that material sanctions are still some way off, it argues that the risk is increasing and events “are becoming increasingly unpredictable”. The agency acknowledges, though, that with high oil prices Iran’s external financial position remains strong.
  • BMA chief confident about region’s fundamentals.
  • The Kazakh authorities would like to establish Almaty as a regional financial centre but further reform and market development is necessary first. Patrick Gill reports.
  • In his last interview as director of public credit for Colombia, Felipe Sardi talks to Lawrence White about the strategies his successor will inherit, his efforts to increase the liquidity of Colombian securities and his plans for the federation of coffee growers.
  • London is seen as the property hotspot in 2006.
  • The rush of foreign investment into central and eastern Europe has undoubtedly improved standards of corporate governance. But the results of this year’s Euromoney survey of the best companies in the region reveal that some state-owned companies that might prove difficult to acquire also rate highly for their management standards. Lawrence White reports.
  • (May 2006) It is early days but US issuers are seriously considering covered bond issuance. There are economic and regulatory reasons why this makes sense.
  • Will US issuers start to look at Europe’s institutional markets?
  • Looks to have got bargain with its $775 million purchase of spot broker.
  • China-focused forestry company falls behind in land acquisition.
  • Equity derivatives dealers have set up an industry group to improve trading efficiency and iron out operational issues in their market.
  • Lehman Brothers has incorporated its European structured finance syndicate and the short-term credit business into its wider syndicate platform. Lorenzo Frontini, European head of syndicate, now has Brett Olson, Edward Rose and Yekaterina Antropova, who are responsible for structured finance, reporting to him. Jon Ford, who runs short-term credit reports to Frontini geographically and Paul Feidelson, global head of short term credit.
  • ResCap was able to pay back its domestic debt owed to GMAC ahead of market expectations following a $3.5 billion multi-tranche transaction ($1 billion of three-year sub, and $2.5 billion of senior – split into $1.75 billion of seven-year and $750 million of three-year).
  • More than a few doubts have been raised about the rumoured plans of state lender China Construction Bank to buy a major stake in US investment bank Bear Stearns. However, sources in the firm’s Asian head office believe the plans are serious. “I haven’t seen a lot of guys with white socks walking around the office yet,” says a senior employee, “but there’s definitely truth to the rumour. It’s typical Bear strategy: late to the party, perhaps, but a smart call.”
  • No, you didn’t misread the headline. This year’s re-rating of the Philippines’ economy recently pushed short-term yields to four-year lows and even inside their US counterparts’ temporarily, according to ING. Could the unthinkable be happening? Might Asia’s perennial underachiever be about to turn the corner?
  • Having been fined £6,363,643 in April by UK regulator the Financial Services Authority for failing to observe proper standards of market conduct and failing to conduct its business with due skill, care and diligence, Deutsche Bank must be keen to promote a spotless reputation in all aspects of its business.
  • A collection of valuable photos brought together by Refco over three decades is on sale at Christie’s in New York in an attempt to raise money to help pay back the $16 billion the commodities trading firm owes to creditors. Works by such photographers as Richard Avedon, Diane Arbus and Andres Serrano are included in the collection, which is expected to raise north of $6 million.
  • Boaz Manor, co-founder of Canadian $800 million hedge fund Portus Alternative Asset Management, says he doesn’t know what has happened to the $8.8 million-worth of jewels he bought with investors’ money, according to a lawyer investigating the fund’s failure. Manor is currently in Israel after fleeing there after his company’s meltdown. In total about $700 million has been secured after being found in 130 Portus bank and investment accounts in Canada, the Turks and Caicos Islands and the Cayman Islands, says the local press. Where the jewels are remains to be seen. Creditors meet in June.
  • Investors will have to wait for deals to burn out before prepayments in European CMBS transactions begin to ease.
  • Bankers reckon convertible bonds will be a product to watch in the developing world.
  • The removal of restrictions on trans-national M&A are fundamental to EU principles. Turkey is setting an example.
  • More challenging asset classes will require a different approach to Italian public sector risk.
  • Few companies are pursuing leveraged share buybacks, but pressure from activist investors is putting the issue back on the agenda and there could be a lot more deals in the next 12 months.
  • Saudi Arabia’s stock market regulator, the Capital Markets Authority, is in an invidious position. At the start of the year CMA officials tried in vain to warn naive retail investors about the dangers of piling into the under-researched, thinly traded speculative stocks that comprise nearly a quarter of the country’s public companies. They were ignored: dismissed as interfering, risk-averse bureaucrats. The market, driven by rising corporate profitability resulting from the high oil price, rose to absurd levels.
  • There’s widespread agreement that there are too many portals providing FX prices but consolidation has been slow. Is the market going to stop waiting and roll out multi-asset platforms instead?
  • Morgan Stanley has made its most senior investment banking hire since John Mack took over as chief executive last year and since the departure of one of its star M&A bankers, vice-chairman Joe Perella, one of the key defectors during the turmoil at the bank in the first half of last year.
  • Forget the stymied constitution, Parisian événements, electoral tangles and government overspending – eurozone corporates are doing just fine and consumers are picking up on the mood.
  • Foreign and local banks are preparing for intense competition to win market share in one of Europe’s fastest-growing financial sectors. Those not already in the field are likely to find this an expensive business. Nick Saywell reports.
  • Deutsche Bank is about to launch an entirely new FX trading platform aimed squarely at attracting flow from the retail end of the market.