Foreign exchange has arguably held up better than any other financial market in the fallout from the sub-prime crisis. Will its robustness result in it being taken more seriously as both a business and as an asset class? And which banks have fared best in Euromoney’s benchmark industry poll?

Conifer Securities, which provides back- and middle-office solutions to hedge funds, family offices and endowments, has bought Morgan Stanley’s outsourced trading business. The platform provides independent trade execution in equities, options and ETFs to Morgan Stanley’s prime brokerage hedge fund clients. Conifer has also recently hired UBS’s former head of prime brokerage for the Americas, Dick Del Bello, as a senior partner.

In the first few weeks of April, the Tadawul, the Middle East’s most liquid equity exchange, had returned to form and bucked the downward trend of developed global markets. But until then, 2008 seemed to be the year of recoupling with western markets, rather than decoupling, as far as the Saudi stock market was concerned.

There are complaints that investors are being misled by funds.

There may be plenty of doom and gloom among private equity practitioners in the US and western Europe as a result of the global credit crunch that has all but dried up their cheap financing. In Russia, though, the mood among their peers is almost euphoric. "I am amazed by how relatively easy it is to raise money for a private equity fund in Russia," says Florian Fenner, managing partner at UFG Asset Management in Moscow, which is fundraising for its second private equity vehicle. UFG is looking to raise at least $500 million and expects to make a first close at least half that figure in May.

Kazakhstan’s banks have built up onerous debt repayments after a splurge of Eurobond issuance. Are they facing a liquidity crunch?

The US secondary market in life insurance is being extended to sellers who can ill afford to relinquish their policies.

Osman Semerci, Merrill Lynch’s former global head of fixed income, currencies and commodities, and co-president of the EMEA global markets and investment banking business, has joined $1.7 billion alternatives group Duet as its chief executive. Duet Group, which started in 2002 with just $10 million in a single fund, now has 14 funds, and is looking to further expand its range of strategies, in addition to growing its private equity business.

It has become increasingly recognized that the attraction of flow from the retail aggregators can have a huge impact on the volumes of sell-side institutions.

South Korea’s new president, Lee Myung Bak, urgently wants the privatization of Korea Development Bank; he hopes it will become globally competitive. But some question the wisdom of the deal. Lawrence White reports from Seoul.

If you’re sick of hearing about Goldman Sachs beating the competition, look away now. Euromoney has conducted its first (somewhat unscientific) poll of investment banks’ online popularity as measured on social networking site Facebook, and the US firm has won by a clear margin. Facebook allows companies to create ‘fan’ pages: "...a unique experience where users can become more deeply connected with your business or brand. Users can express their support by adding themselves as a fan, writing on your Wall, uploading photos and joining other fans in discussion groups."

"The problem is that banks have ended up lending to these deals by accident – they thought that they were underwriting them"

"Who is this?"

BNP Paribas is presenting MillionTreesNYC in New York, a citywide, public-private scheme with the goal of planting and caring for a million trees across New York’s five boroughs over the next 10 years. Introduced as one of mayor Michael Bloomberg’s 127 PlaNYC initiatives to create a healthier, sustainable city, MillionTreesNYC will increase the city’s tree-count by 20%.

As a new approach to financial PR it may take some time to bed in.

UBS has done a service to all investors in bank stocks and bonds by making public the report requested by the Swiss Federal Banking Commission into the root causes of its sub-prime losses.

The International Capital Markets Association raised SFr100,000 ($97,000) for underprivileged children with its annual ski weekend in Davos at the end of March. The event is more than 30 years old, but the potential for charitable contributions was only realized last year.

The rise of alternative beta strategies seems inevitable as investors chase greater levels of diversification in their portfolios. What are the secrets of alternative beta’s success and what obstacles can still impede its progress?

The sideways, low-volatility markets of the past two years are gone, so how should investors review their currency management strategies? Should they consider shifting mandates from quant to discretionary? And should capital preservation take over from return maximization?

Competition between trading venues is leading to soaring trading volumes in Europe. Brokers are reaping the benefits and incumbent exchanges have yet to feel any pain, despite the success of new competitors.

Liquidity remains the primary challenge in the present environment, meaning that few credit managers have ventured beyond the relatively liquid credit derivative indices. Managers including BlueCrest, Cairn Capital, CQS and Pimco are all seeking to take advantage of the unique opportunities the dislocation in the credit market has created, say market participants.

Bad infrastructure, a weak economy and vulnerable financial assets – but bankers in South Africa remain confident.

Figures released by Isda during April show that the notional amount of credit default swaps outstanding during 2007 grew by 37% from the first half of the year to the second half. After the first six months of 2007 – before problems in the US sub-prime mortgage market tipped the credit markets into turmoil – there were $45.5 trillion of CDS outstanding but by the end of the year there were $62.2 billion. CDS notional growth for the whole year was a full 81%. The figures are a stark illustration of the extent to which CDS were embraced as a means of hedging credit risk when the markets turned.

A reduction in foreign capital flows means that many banks in eastern Europe are indirect victims of the credit crunch.

Credit Suisse has appointed Chris Tuffey as the new head of European debt syndicate. Tuffey replaces John Fleming, who, after nine years in the job, and 14 at the bank, has left the business. Tuffey has worked at Credit Suisse for 21 years, spending much of the past 10 associated with emerging markets and investment-grade corporate syndication. In addition to syndication, he ran emerging markets origination for the past two years.

Tradeweb has unveiled an electronic market for deposits. The platform’s management say that Tradeweb Deposit will support the placement of new and maturing deposits in euro, sterling, dollar, Swiss franc and yen. The timing of this launch comes just as the focus on the money markets has sharpened as discrepancies between the reported fixing of the interbank offered rate and the real level of bank funding have emerged. The new offering has been running on beta since January and 1,500 placements had already been conducted as of April 22. Tradeweb’s belief that electronic trading will help price transparency in the market will no doubt be challenged by the leading brokers. But the benefits of e-finance around processing are less disputed.

The grip of the credit crunch seems to be easing for Brazilian corporates wanting to issue debt. This optimism from Brazil is in line with the rest of Latin America, where the debt market fog is clearing.

The Eurasian Development Bank, which was founded in 2006 to finance infrastructure projects in Russia and Kazakhstan, is to expand its remit to include investments in financial institutions, according to its chairman.

Uncertainty worldwide on the next move in interest rates is leading to short-term volatility and price gyrations in the foreign exchange market.

It is too early to call the end of the credit crunch but evidence that the crisis is not worsening, if not starting to ease, was in abundance last month. If March marked the lowest point in the financial crisis, the first half of April gave ample reasons to believe that sentiment is improving – at least in the short term.

Barclays Capital has poached Adrian McGowan from Deutsche Bank, where he was head of FX complex risk, to head its FX business in Asia. McGowan will be based in Singapore and report to Ivan Ritossa, the bank’s head of global markets – trading, Asia Pacific, and global head of FX and prime services.

Standard Chartered Bank has made three senior appointments of former Lehman Brothers staff to boost its financial markets management team. Remy Klammers becomes the bank’s new global head of fixed-income trading with responsibility for FX, rates, credit and structured products trading. Klammers reports to Lenny Feder, the bank’s group head of financial markets. Klammers was previously managing director of structured products Asia at Lehman. He is being joined by Alexis Suzat, who has been appointed as global head of structured products trading, and Marten Agren, who joins as global head of modelling and analytics group, financial markets.

UniCredit Markets and Investment Banking has hired Xavier Alexandre as its head of e-commerce and electronic trading for FICC. The bank has yet to finalize the reporting lines for this new position. Alexandre will be based in London.

Retail FX provider Oanda is building up its presence in Asia following the recent appointment of K Duker as its managing director for Asia Pacific. The company has hired Maxine Loh, formerly a marketing director at UBS; Zena Tong, formerly a senior sales executive at Saxo Bank; and Tracey Tan, who was a senior customer service executive at Bloomberg, to work out of its Singapore office.

The Bank of England’s special liquidity scheme does nothing that hasn’t already been done by the Fed and the ECB – except on more onerous terms.

The fuller acceptance of volatility as an asset has moved closer with a new range of investable indices.

Banks are paying the price for hanging on to their stuck leveraged loans for so long.

According to press reports, Polygon Investment Partners, an $8 billion UK hedge fund, is changing its redemption system in a bid to slow investor withdrawals. The fund, which had lost 4% by the end of March, operates a first-come, first-served redemption system that limits the amount of withdrawals at any particular time. But management reportedly claims that this has resulted in investors applying to withdraw money in a bid to be first out of the gate, simply to avoid being caught last if the fund were to get into serious trouble.

The crisis suggests that privately owned banks are not self-evidently better managed nor more effective at allocating capital than state-owned ones.

Growth potential is the buzz-phrase in the central and eastern European private equity market. Many in the market are extolling its virtues, not to mention its returns, but what are the hidden risks? Jethro Wookey reports.

The number of new equity-linked issues in the first quarter of 2008 fell dramatically across all regions in comparison with the same period in 2007.

The weather might not have been very spring-like (at least in London), but April heralded definite signs of a thaw in the loan markets. The standoff between the banks and opportunity funds that resulted in the $237 billion logjam of loans in the leveraged finance market (see Leveraged finance: Funds go hungry as distressed trough fails to fill , Euromoney, December 2007) has finally ended, with the former having blinked first.

The Bank of England levelled the playing field for UK financial institutions last month when it followed the lead of the Federal Reserve and provided a facility for domestic banks and building societies to refinance mortgage-backed bonds for government bonds. Continental European banks have long been able to use the European Central Bank’s repo facility for their mortgage-backed securities. Until the European securitization market shut down, UK banks were by far its biggest users – accounting for between 40% and 50% of annual issuance over the past three years alone. The Bank of England has carefully constructed its programme to ensure that banks retain all credit risk.

Non-performing loans in Mexico are growing at a worrying pace. Despite official estimates putting consumer NPLs at 5.8% of the total consumer loan market, some analysts believe that real levels are in double digits already.

ING has released a report on the economic and market implications of US obesity. Entitled The fat of the land, the report looks at possible effects on the US economy of the growing numbers of obese people. In 1980, some 15% of Americans were classified as obese, under the (admittedly questionable) BMI method. By 2004, that figure had risen to about 33%.

Ukraine’s financial institutions are thriving despite renewed political upheaval. A surge in M&A and IPO activity could be the next stage.

While elsewhere the mortgage market is drying up and securitization is quiescent, the biggest economy in the Gulf is trying to expand both. The finishing touches are being applied to laws on the Saudi mortgage market but it’s uncertain they will provide enough flow to meet demand for funding. Dominic O’Neill reports from Riyadh.

Sepa came into being in January but there is still much work to be done before the full benefits come through for banks and corporate customers. What are the main threats or opportunities of the developments? What obstacles have to be overcome? Euromoney’s debate panel wrestles with the key issues.

The world is starting to resemble a spinning top: one week the markets soar, the next they sink. Even mighty masters of the universe are confused: hedge funds and banks had a dire month in March. And could there be a mightier master than Hank Paulson, the present US Treasury secretary and former Goldman Sachs chief executive?

Can the rapid growth of e-trading in recent years continue?

29.4 and 44,000,000,000

The net new inflow into hedge funds collectively was a meagre $16.5 billion over the first quarter of 2008, according to Hedge Fund Research, in comparison with almost $200 billion in 2007. Some strategies fared better than others: macro hedge strategies posted $1 billion in redemptions; merger arbitrage strategies had outflows of $4 billion; while distressed strategies attracted $8 billion. Macro strategies, however, posted returns of 4.7% in Q1, while the overall hedge fund index was down more than 3%.

London’s position as a centre for hedge funds is under threat. Brevan Howard is the latest to warn the UK government that it will be moving its headquarters abroad if proposed tax changes are implemented.

Does the EC need to force clarity on clearing?

Not content with its £10 billion-a-year PFI programmes, the UK government plans to extend its use of securitization to its student loan book. This is worth about £18.1 billion and is expected to increase in value to £55 billion over the next 10 years. Legislation is now in the House of Lords to enable the government to sell these loans to the capital markets – a process that it hopes will raise £6 billion by 2010.

Speakers at the EuroHedge Summit offered sound advice: leverage addicts were warned about the drug’s potency, and panickers were advised to panic in good time. Neil Wilson reports from Paris.

The volume of equity raised in the Middle East so far this year is up 62% on the same period in 2007. Issuers from the region have raised $11 billion-worth of equity year to date, mainly through IPOs, which account for 60% of total volume, up from just 47% in 2007.

In the run-up to the annual general meeting of the European Bank for Reconstruction and Development in Kiev there were encouraging indications that dire predictions about the economic demise of the countries of central and eastern Europe are looking increasingly wide of the mark.

Freeing up markets would help the country lose its tag as the poor man of Latin America.

In April, Instinet added Korea to the growing list of markets where it operates alternative trading systems.