The managers of a new equity fund say the big re-rating of Russia is over. It is time for a new type of fund that can prosper in a downturn, they argue. Julian Evans reports.

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?

After weeks of confusion, Turkey’s central bank has a new governor. Analysts hope he will preserve the largely successful policies of the outgoing chairman. Durmus Yilmaz has been appointed to replace Sureyya Serdengecti, who retired on March 14 after five years in charge. The appointment follows weeks of uncertainty after staunchly secularist president Ahmet Necdet Sezer turned down the AKP government’s initial suggestion of Adnan Buyukdeniz, chief executive of Albaraka Turk, an Islamic bank.

Vietnam’s first flirtation with western fund management ended in an embarrassing exit for all but the die-hard few. Now that money is queuing to get in again, those who stuck it out through the downturn advise caution. Chris Leahy reports.

The enormous growth potential of the Turkish banking sector is attracting a lot of attention but the mortgage business, one of the industry’s biggest attractions, is suffering from profit shortfalls because of a lack of well-matched funding opportunities. Covered bond issuance and the imminent reawakening of the Turkish lira corporate bond market could provide a much-needed boost. Peter Koh reports.

Goldman Sachs has reshuffled its Latin American investment banking team by naming Eduardo Centola and Martin Werner as co-heads.

With EU accession for Croatia still a few years away, the country’s financial authorities are focusing their attention on developing the local bond market. Oonagh Leighton reports.

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.

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.

Will US issuers start to look at Europe’s institutional markets?

Bankers reckon convertible bonds will be a product to watch in the developing world.

The capital markets are something of an open goal for debt issuers at the moment – spreads are tight, and investors want to put their money to work.

(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.

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).

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.

Equity derivatives dealers have set up an industry group to improve trading efficiency and iron out operational issues in their market.

China-focused forestry company falls behind in land acquisition.

IMF responds to Nielsen accusations

Hybrid structured products – cross-asset-class investments – are finally starting to make a significant impact with investors. Banks report increasing demand from those looking to trade several market views via a single instrument to instantly reap the benefits of portfolio diversification. But with increasing sales come new challenges, such as the pricing of correlation. How are hybrid structured product makers faring?

“I tried really hard not to use the words ‘dead cat bounce’ when we met.”

Uses of securitization to fund US buyouts is getting ever more innovative.

BNP Paribas has topped the investment grade section of the Euromoney credit research poll for the past three years but this success has not stood in the way of a shift to a new research model.

Fund managers with medium-size AUMs can be successful.

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?

Looks to have got bargain with its $775 million purchase of spot broker.

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.

ITG and Merrill Lynch have joined forces in a joint venture called “Block Alert, powered by Posit” that will create a global block order crossing service.

Recent figures from Reuters’ Loan Pricing Corporation show that borrowers have it better in the US now than ever before. Strong growth in the M&A market meant that syndicated loan issuance in the US reached the highest volume on record in the first quarter of the year.

The ECB sets great store by the transparency of its decision-making process and the clarity of its communication with the outside world. ECB president Jean-Claude Trichet was reminding us of this again last month.

The bridge loan Softbank has taken out to acquire Vodafone in Japan is enormous, negotiated on onerous terms and costly by Japanese standards.

Convertibles have regained popularity in M&A because of the types of deals being done.

10,000,000,000 the minimum amount in dollars that Russian IPOs, excluding Rosneft, are expected to raise this year, according to bankers. The Russian government hopes to raise as much as $15 billion from a London IPO of Rosneft this year.

Is there enough room for both sorts of hybrid in the European acquisition finance market?

The long-awaited privatization of Svyazinvest, Russia’s national fixed-line telecoms operator, could finally get under way within the next two months.

Azerbaijan Electronics, one of the country’s largest energy utilities, has sold a $1 million one-year bond, the first from an industrial issuer in the country. The bond yields 14.5% and was issued at par.

Central bank to change tier 1 regulation in two months.

Bank of Alexandria privatization process started.

Austrian bank CA IB has launched REX, the first publicly available real estate index to cover emerging Europe and the closely related Austrian market.

Hugo Chávez, Venezuela’s president, has issued a stark warning to the US government – threatening to blow up his country’s oil fields if the US were ever to attack. Speaking at a mini-summit in Paraguay involving four Latin American presidents, Chávez said: “We won’t have any other alternative but to blow up our own oil fields – they aren’t going to take that oil.” Venezuela is the fifth-biggest oil exporter in the world and one of the largest suppliers to the US. The US denies that it has any intention of attacking Venezuela.

Guillermo Nielsen, Argentina’s former finance secretary, has a new role in the public sector. He is the minister of finance for the city of Buenos Aires, which has the third-largest budget in Argentina. Nielsen’s main task will be to reorganize the working of the city government and to attract investment.

A new IDB report says the financial community should take advantage of the benign economic conditions and produce instruments capable of automatically compensating for economic setbacks. They include bonds linked to commodity prices, national growth rates or the occurrence of national disasters.

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.

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.

As an increasing number of hedge fund managers chase similar strategies in a bid to make returns, Bryan Williams asks why more aren’t looking at municipal bond arbitrage.

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.

The New York Stock Exchange needs to have its hybrid system ready before Reg NMS takes effect but it has only just completed Phase I. It might not have too much to worry about, though, as many other market participants are unprepared and a delay is widely expected.

Germany’s True Sale Initiative received some much-needed publicity last month when the first CLO to be structured under the programme emerged from Dresdner Bank.

“Debt providers are becoming more selective about the opportunities they are willing to support and are now concentrating on companies with good forward earnings visibility”- James Stewart, ECI

New valuation models have underscored the need for accurate mark-to-market pricing for credit derivatives.

When Gloria Estefan released her 1987 chart topper “Rhythm is gonna get you”, she was on to something. Nearly 20 years later she still has the crowd dancing in the aisles, or “partying on out” as she put it – even when that crowd is attending a swanky mid-week benefit dinner on Wall Street.

A compulsory minimum free float for banks listing in Russia is illogical, hard to police and might not be in investors’ best interests.

According to both EBS and FXall, the first quarter of 2006 was the busiest ever for FX trading. Talking purely about spot, EBS says daily activity in the quarter averaged $132 billion, a 2.3% increase on the same period in 2005.

UK companies struggling with pension fund shortfalls have been thrown a lifeline in the shape of investment banks and hedge funds. Wheels are in motion to create a market of defined benefit pension buyout ventures back by banks, hedge funds and entrepreneurs.

Russian companies are not renowned for adherence to international standards in corporate governance but several from the Russian Federation are looking to list their stock domestically and abroad. How are these companies dealing with the standards demanded by international investors? Kathryn Wells reports.

While some analysts worry about the Austrian bank’s effect on prices in central and eastern Europe, others have a great deal of confidence in CEO Andreas Treichl and his X factor. Julian Evans reports.

Radoslav Jelasic, governor of the National Bank of Serbia, tells Nick Saywell about the challenges facing his country’s banking industry as levels of foreign ownership rise. The main issues now are transparency and supervision rather than solvency and liquidity.

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.

The removal of restrictions on trans-national M&A are fundamental to EU principles. Turkey is setting an example.

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.

More challenging asset classes will require a different approach to Italian public sector risk.

Investors will have to wait for deals to burn out before prepayments in European CMBS transactions begin to ease.

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.

News of the first RMBS transaction out of Saudi Arabia has focused attention on the potential for real estate-backed issuance from the region.

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.

It’s Vietnam, but not as we’ve known it. The country’s financial markets have promised much in the past and delivered little but disappointment. Reforms are now for real and initially most apparent in the banks. Significant opportunities are there for the taking. Chris Leahy reports.

At the start of April, Chuck Prince, chairman and CEO of Citigroup, came to Riyadh to lobby the Saudi finance ministry, central bank and capital markets regulator to let the US firm back into the kingdom less than two years after Citigroup sold off its 20% stake in Samba (previously Saudi American Bank). It was one of the early big decisions of Prince’s tenure as CEO and signalled the end of Citigroup’s presence in a country where it had operated since 1955.

Australian regulator’s charges cast doubt on legitimacy of prop trading.

The most representative annual FX poll Euromoney has conducted to date examines a market in which technology shapes the present and the future, and the buy side is unwilling to break the bank when buying services. In a growing market that demands huge expenditure and promises little return, banks have to position themselves well to stay in the game. Florian Neuhof reports.

The central Asian republic may still be developing suitable funding channels, but a pick-up in deals is expected, given an economy that continues to grow and an appropriate legal framework. Patrick Gill reports.

Competitors gloating over the firm’s current predicament are likely to be sorely disappointed.

What’s going on at Merrill Lynch? The investment bank has posted impressive overall first-quarter results, as revenues hit the $8 billion mark, but the Latin American debt capital markets desk seems to be lagging.

Proponents of European high yield think covenants for issuers should be relaxed if the market is to survive.

Euromoney’s investigation into the global FX market in 2006 – seven years before the fixing controversy - revealed the scale of the practice of banks’ pre-empting, or front-running, clients' FX orders.

Until discrepancies between index auction prices and single-name CDS recovery rates can be ironed out, investors should sell recovery basis risk.

In recent weeks significant moves have taken place in the higher echelons of European structured finance.

Latin America is no stranger to banking crises. Every so often a banking system will implode, and depositors will lose all or some of their money.

A rather angry group of American football players and the federal government are reportedly looking for Kirk Wright, whose International Management Association hedge fund allegedly robbed 500 investors of $185 million. The fund was eligible for investment as part of the football players’ financial advisers programme. Wright failed to appear in court, and has reportedly gone underground, claiming that he has received death threats.

UK non-conforming mortgage lender Kensington Mortgages has shown how well the monoline, securitization-funded business model can work. Group treasurer Mark Wilten tells Louise Bowman why its risk profile has moved away from sub-prime lending and denies that the company is for sale, despite persistent rumours to the contrary.

Central Asia, a stronghold for dictators, poverty and corruption, doesn’t at first glance seem to offer fertile ground for high investment returns. But this is precisely what some of the region’s more intrepid investors hope to find and profit from. Kathryn Wells spends a week on the road with two hedge fund managers, on the lookout for opportunities on this new frontier.

After having been unseated as CEO of Deutsche Börse by hedge funds, Werner Seifert has concluded that the hectic race for alpha will destroy capitalism. Euromoney looks at Seifert’s passionate espousal of good old corporate values.

JPMorgan Chase CEO Jamie Dimon wants a clear, new structure for the bank, without personal fiefdoms and superstars. But what does this mean for one of its most important franchises – the structured credit business that JPMorgan once dominated – now in the hands of a new generation of managers? Alex Chambers reports.

State Bank of India has decided to enter India’s rapidly growing market for securitized assets.

Structured credit investors rushing to list residual income funds need the capacity to accurately price this esoteric risk.

The authorities of Saudi Arabia have used the stock market to redistribute wealth, but in doing so they helped inflate a bubble. The inevitable crash has aroused some discontent. Rather then rushing to bail the market out, policymakers should use the sell-off as a spur to force out the manipulators and build a sounder infrastructure by forging ahead with privatization, licensing new investment banks and brokers and fostering institutional asset management. The pain of the sell-off will eventually pass, because Saudi Arabia is booming.