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November 2003

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  • Thirachai Phuvanatnaranubala, deputy governor of the Bank of Thailand, has been one of the main drivers of recent Asian financial market initiatives, most notably steering ABF1 to fruition. He spoke to Euromoney's Nick Parsons about pan-Asian achievements and hopes for the future.
  • Covered bonds are moving out of their traditional heartlands of France and Germany and becoming a global product.
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  • Continental Europe's corporate bond market is expanding and catching up with the US and UK. French banks and issuers are stealing a march on their nearest competitors in the range and sophistication of their issues.
  • Deutsche Bank has launched a set of tradeable foreign exchange indices, with new products that make it simpler for clients to take positions on individual currencies.
  • Thailand
  • It must have been sweet music to the ears of bankers sitting in advisory departments across the globe. After two years of falling volumes, mass lay-offs and sorry looking deal pipelines, here was the M&A pick-up they had been dreaming about for so long. When it arrived, it did so in dramatic style. Over $80 billion of deals were announced on October 27, the biggest volume of deals announced on a single day since the height of the M&A boom in 2000.
  • In June, the 11-member Executives Meeting of East Asia-Pacific (EMEAP) central banks announced the birth of the $1 billion Asian Bond Fund 1 (ABF1) - something few market observers expected to see so soon.
  • Since the dot com bust banks have been forced to come down to earth in their electronic offerings. They are focusing on super-fast pricing engines, error-free post-trade functions and good internal risk management rather than on fancy websites. Euromoney’s fourth annual awards highlight those that have done this best. Katie Astbury, Mark Brown, Julie Dalla-Costa, Julian Evans and Peter Koh.
  • The decision of the Organization of Petroleum Exporting Countries to cut production means that oil prices are set to stay high. This will keep Europe's consumers spending less and will dim prospects for eurozone recovery.
  • Rob Mannix reports on how an investor group aims to stop borrowers giving security over assets to other lenders without doing the same for bondholders
  • Source: is Europe's leading financial commentary service.
  • As Euromoney went to press investors were struggling to come to terms with the freezing by Russian prosecutors of a large block of shares in Yukos. Badly burnt by the 1998 crisis, foreign investors have been slow to return to the Russian stock markets and those that did were all buying shares in Yukos, commonly viewed as Russia's most transparent and best managed company.
  • Too much intelligence is bad for your financial health.
  • Here's some bad news for those people who don't find STP boring: other people do.
  • Those who know him might not believe it. Antony Currie, our US editor, actually managed to complete a marathon.
  • Chinese whispers seem to be distorting the office gossip at Deutsche Bank.
  • Source: is Europe's leading financial commentary service.
  • If the recent sparkling performance from Turkey's economy persists, the country's banks will be under increasing pressure to wean themselves off dependence on revenues from government borrowing and seek economies of scale through mergers and acquisitions.
  • ? Running a company is a thankless task now that chairmen and CEOs are regarded with suspicion not admiration. In a further affront, in the UK at least, any CEO who makes a deal to become chairman of a merged company may well face the chop.
  • ? The August 2003 edition of Euromoney contained a table ranking banks in Emerging markets by shareholders equity ('A world of difference', p.78-81).
  • Modest initial proposals for a $1 billion Asian bond fund to be invested in by regional central banks are blossoming into more ambitious attempts to develop regional financial markets.
  • Issuers have taken the keenest interest in Moody's covered bonds policy, but Standard & Poor's announced in October that it was refining its approach to rating European covered bonds. The rating agency said that the variety of legislation in Europe meant that investors were asking it to clarify how it rated covered bonds. Specifically, investors want timely payment, and reassurance on how their investments are likely to be affected by the insolvency of an issuing bank.
  • Although new covered bond jurisdictions such as the UK have monopolized recent headlines, established jurisdictions such as Germany, Spain, and France still account for the bulk of issuance. According to figures from CDC ICM, in the first quarter of 2003 total issuance was €35.6 billion. Of that, obligations foncières accounted for 15%; cédulas hipotecarias for 31%; and jumbo Pfandbriefe for 37%. Obligations foncières, with their true bankruptcy separation, are widely perceived to be among the safest covered bonds. Investors are also fond of them because of the relatively small number of French issuers - Crédit Immobilier de France (CIF), Compagnie de Financement Foncière (CFF), and Dexia Municipal Agency (Dexma).
  • In view of president Vladimir Putin's assault on Yukos it might seem an odd time to take on extra Russian risk. Nevertheless, that is just what RZB's Russian subsidiary, Raffeisen Zentralbank Oesterreich (RZO), has been doing in its lending operations, and the strategy has been paying off.
  • Eiji Hirano, assistant governor of the Bank of Japan, spoke to Euromoney's Nick Parsons about Japan's views on a broadening and deepening of Asia's bond markets. He tempered his enthusiasm with an emphasis on the need for simultaneous development of the region's banking system.
  • ? The debate about soft commissions and bundling arrangements rumbles on in the UK, with fund manager and pension fund bodies at loggerheads over whether the Financial Services Authority should regulate arrangements.
  • Even before the arrest last month of Mikhail Khordorkovsky and the freezing of a large block of Yukos shares, Moody's decision on October 8 to raise Russia's sovereign credit rating, from Ba2 to Baa3, had been greeted with as much concern as joy. The RTS closed that day 3% up at an all-time high of 628.98. Yields for Russia's 2030 Eurobond contracted by 40 basis points.
  • Partners, Auerbach Grayson
  • ? India may well be the second-fastest growing economy in the world this year, after China. Government, independent think-tanks and investment banks agree that GDP will grow by close to 7% this year. Moody's put India's foreign currency sovereign rating on review for a possible upgrade from sub-investment status in early October, citing its foreign exchange reserves of over $90 billion.