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May 2007

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  • Which US investment bank is back in the top 10? Which Danish bank breaks into the top 25 for the first time? What’s the best multi-bank platform – FXall or Currenex? And who are the leading local banks in emerging market FX? Here are the views of over 8,000 end-users who transacted over $120 trillion in the past 12 months.
  • Chinese regulators now want the largest state-owned firms to list at home, leaving smaller private companies to trade in Hong Kong. But these might be the best Chinese companies and losing them may be a big mistake.
  • But Tate & Lyle puts itself on the Pink Sheets.
  • Dominion Bond Rating Service is now an eligible External Credit Assessment Institution with 11 EU countries. It is part of a long drive by the Canadian-headquartered rating agency to break into the industry oligopoly.
  • With Hoteloc still ringing in the market’s ears, Deutsche Bank’s conduit trips up on its pub valuations.
  • In the second half of last year, outstanding volumes of credit default swaps grew by 33%. This compares with the first half of the year, when outstanding CDS volumes grew by 52%. In 2005, CDS volumes rose by 105%. The numbers were produced by the International Swaps and Derivatives Association, which announced on April 18 the results of its year-end 2006 market survey of privately negotiated derivatives.
  • Icap has widened the distribution of its electronic forward foreign exchange platform after what it says is its successful take-up in Europe. The company says the platform will build on the success of EBS, the spot platform it bought from its mainly bank owners in 2006.
  • Private equity specialist Carlyle is moving into the hedge fund business on the back of "client demand and product diversification", according to a source familiar with the firm.
  • The maturation of Asia’s hedge fund industry is evidenced by the number of new funds being set up by hedge fund employees in the region.
  • Small and mid-sized companies have outperformed larger ones for the past six years and their winning streak has so far continued into this year. While the S&P 500 has risen 2.2% year to date, the S&P 400 mid-cap index has shot up 7.7% and the small-cap S&P 600 by 4.7%.
  • Slackening underwriting standards in loans that back a burgeoning CDO market? It all sounds horribly familiar.
  • Rapid growth of Caja Madrid’s mortgage book last year prompted the Spanish savings bank to issue its first RMBS transaction. But as executive managing director and head of capital markets Carlos Stilianopoulos explains, the bank has its sights firmly set on the CLO market in 2007. Louise Bowman reports.
  • European credit strategist Gary Jenkins has joined Synapse Investment Management as a partner and portfolio manager in the credit strategy team. Gary was previously a managing director and head of fundamental credit strategy at Deutsche Bank, and before that was a managing director and head of credit research at Barclays Capital.
  • The range of structured credit products on offer to investors has grown as they seek to increase returns in a low-yield environment. The next stage, led by CPDOs, is to create more spread-based, rated products that incorporate default and market risk.
  • The usual post-bonus round of recruitment has generated a typical flurry of activity in Asia’s investment banking community. The one area that has been notably active is the debt capital markets business as banks reposition their businesses to reflect the exceptionally strong market conditions of 2006 and the start of this year.
  • Given that it bought Advantage Home Loans as long ago as December 2005, Morgan Stanley has taken its time to launch its first non-conforming RMBS transaction, ResLoc UK 2007-1. But the deal is not an Advantage deal; just 9.87% of the loans in the deal are actually originated by the lender. Morgan Stanley has been busy buying whole loan portfolios from other non-conforming lenders to ramp up this deal and the lion’s share of the collateral is actually originated by GMAC-RFC (79.9%). This will certainly offer investors comfort, given GMAC’s longevity in the sector. However, given the intense scrutiny that sub-prime lending has been under of late, the low, 6.1-month seasoning of the portfolio together with its 82.6% loan-to-value ratio might give some pause for thought. The US bank hired mortgage market veteran Rob Collins from Abbey last year to front its residential mortgage securitization business.
  • "Oh shit!"
  • The International Securities Exchange, which pioneered electronic equity option trading in the US, has listed contracts on four currency pairs: US dollar/euro, US dollar/sterling, US dollar/yen and US dollar/Canadian dollar. Timber Hill will serve as the primary market maker, and Citigroup Derivatives Markets, Lehman Brothers and Optiver US will act as competitive market makers. The contracts are very much aimed at the US retail sector.
  • FXMarketSpace, the 50/50 joint venture owned by the Chicago Mercantile Exchange and Reuters, officially went live as planned at the end of the first quarter.
  • Performance and regulatory changes make raising capital tough.
  • As of June 1, Rupert Allan, president of Tremont Capital, will be taking on the role of CEO.
  • More efficiency in clearing will help increase the importance of Europe’s equity markets.
  • Niall Cameron, who left ABN Amro as head of traded markets in February this year, has joined the Markit Group.
  • Credit Suisse closed the first issue of long/short collateralized commodity obligations notes in April. Rated AAA by Fitch Ratings and denominated in US dollars, euros and Australian dollars in three-year and five-year tranches, the $190 million issue of notes offers protected coupon payments and principal repayments based on the performance of long and short positions on a portfolio of commodities.
  • The opening up of the Chinese FX market has continued with the unveiling of a new trading platform by the China Foreign Exchange Trade System. The platform, which uses Reuters’ electronic trading technology, initially went live on March 12 for currencies other than the yuan before being expanded to allow CFETS member banks to trade the yuan against five other currencies in early April.
  • General Atlantic, a global private equity firm, has taken a stake in the Global Electronic Trading Company. Bill Ford, GA’s chief executive, and Rene Kern, its managing director, will join Getco’s board. GA has been steadily investing in the financial services sector. It has taken stakes in what it describes as innovative, technology-driven companies, including Saxo Bank.
  • The present run of stock market buoyancy cannot be sustained. And that’s not just because credit is set to contract – so, too, are corporate profits.
  • Euroweek, Euromoney’s sister publication, threw a lavish bash at London’s Royal Courts of Justice in April to celebrate its 1,000th edition and the 20 years the newspaper has spent covering the trillions of dollars that have been raised in the international capital markets during that period.
  • Latest securitization refinancing of GHG healthcare group is a puzzlingly complex hybrid deal that will be largely retained by arranger Barcap.
  • "And what drives me? I want to create a huge empire. That is what drives me. And as long as God is willing and gives me strength and I am healthy, I will do that"