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November 2005

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LATEST ARTICLES

  • Brokerage firm Refco steals the headlines but Samsung faces major fine. South Korean electronics conglomerate Samsung has pleaded guilty to price-fixing in a far-reaching probe by the US Department of Justice and has been handed down the second-largest criminal fine ever
  • Sales of non-performing loan and real estate portfolios to foreign investors have stirred controversy in Germany, with the buyers being described by a senior politician as “a plague of locusts”. But the medium-term benefits could go beyond a much-needed injection of liquidity and balance sheet repair and provide a fresh impetus to the German economy.
  • Another round of changes to financial legislation could reshape the German covered bond market. But it isn’t the new Pfandbrief Act that has got banks most excited. Laurence Neville reports.
  • Why CFOs should stop mistrusting hedge funds
  • Investors are pushing bank CEOs to produce growth. Some are now touting their ability to wring cost savings from IT, capital management and the rationalization of wholesale businesses after big mergers. National regulators are losing their power to block cross-border deals. We are almost at the point, Peter Lee reports, where every big bank is in the firing line.
  • Pension funds’ need to outpace the effects of inflation has prompted growing exposure to alternative investments. Commodities look to be a good source of such diversification. But should exposure be direct or through an index? And if the index route is chosen, which benchmark is to be preferred?
  • The Philippines’ state pension schemes are in a parlous financial condition and in desperate need of reform, but the government has no money. A private sector solution is available and there is time to fix the problems, but only if politicians leave well alone. Chris Leahy reports.
  • Saudi and Qatari banks launch new investment products. National Commercial Bank has become only the second Saudi Arabian financial services provider to launch a Shariah-compliant mutual fund that will invest in the countries in the Gulf Cooperation Council.
  • BNP Paribas has filled its global head of securitization post. Former Morgan Stanley securitization syndicate and trading head Tim Drayson joined last month. Drayson left Stanley after 10 years in March and joins at a time when BNPP has advertised its intention to grow its securitization business.
  • Fresh from big spending on China’s state lenders, global banks are lining up to buy into its securities industry.
  • The jumbo covered bond market was 10 years old this year. Its key characteristic has always been liquidity. But one analyst thinks this is no longer the case. Is the jumbo market in for a shock? Mark Brown finds out more.
  • “I have 18 proposals from different banks all offering the same type of deal. When you pile them one on top of the other they stand over a metre high. I am suffering from lead harassment”
  • During the IMF/World Bank meetings in Washington at the end of September, some of the leading names in global finance gathered at the Hay Adams Hotel to witness the presentation of Euromoney’s minister of finance and central bank governor of the year awards.
  • Why CFOs should stop mistrusting hedge funds
  • Taiwan recognized the failings in its existing pension systems early. A new scheme was launched in July. It is already accumulating funds rapidly and the effects on Taiwan’s domestic capital markets are likely to be dramatic. There will also be numerous opportunities for global asset managers. Chris Leahy reports.
  • Refco, the troubled commodities and futures brokerage that went into financial meltdown after allegations of executive fraud surfaced in October, is likely to sell its futures business to private-equity firm JC Flowers. The company is also expected to put its capital markets business into bankruptcy. [see market leaders section, this issue -- Refco deals out a harsh lesson -- for comment]
  • Intrigue surrounds FSA views of an HBOS tier 1 deal. And the future’s not Bright for the bank’s funding chief.
  • Two unconnected events in the Byzantine world of Japanese banking indicate some progress, albeit slow, in the reform of this troubled sector.
  • Wealth management arm put on course to “grow by multiples”. The appointment of Thomas Kalaris as chief executive of Barclays Wealth Management signals the start of a rapid build-up.
  • Was there an ulterior motive for CMC Group’s decision to drop the deal4free brand?
  • Agency’s rating action places extra focus on bank’s securitization of first-loss positions.
  • Delphi’s bankruptcy shows that many of the imbalances remain in global structured credit.
  • The sovereign should deepen its domestic market, not issue local-currency debt abroad
  • Dismissing the official charged with setting up a debt agency sends the wrong signals at home and abroad.
  • Investors want growth and are impatient to get it. Bank CEOs are feeling the pressure, so expect more M&A activity.
  • Sovereign has shown it retains access to the capital markets despite political and economic woes.
  • Cash corporate credit might be in short supply but borrowers still need to tread carefully.
  • US investors could put more than $470 billion to work in US treasuries if Asia’s appetite for dollars continues to fall. Analysts identifify a huge potential for domestic reallocation.
  • The bankruptcy highlights the CDO market’s continued inability to price in potential credit events.
  • Montgomery & Co is known for its M&A advisory services. Now, it's pushing into equity research, institutional sales and trading. It will offer specialist research in key areas for growth companies: medical devices, biotechnology, speciality pharmaceuticals, wireless technology, digital media technology and semiconductors.
  • Experiments show that individuals with a specific type of brain damage, which prevents them from feeling fear, outperform normal players when it comes to making some investment decisions. Crack and methamphetamine addicts as well as alcoholics similarly outperform.
  • A pan-European growth market could significantly boost EU GDP, but there are obstacles to putting it in place.
  • New US bankruptcy laws that came into effect in October will alter the way companies go through restructuring and might make it harder to enter Chapter 11 bankruptcy protection. In addition the ability of companies to manage their own reorganization will be affected – giving creditors more say after a few months.
  • Airline is courting controversy with creditors after abandoning leased aircraft.
  • One of southeast Asia’s top finance officials says that the region must continue to harmonize if it is to stave off the threat of growing competition from China and other north Asian economies.
  • New loan programme re-establishes relations.
  • Leading presidential candidate promises orthodox finances.
  • Kyrgyzstan’s central bank governor, Ulan Sarbanov, has been placed under house arrest in the course of a government investigation into funds he transferred to the previous president, Askar Akayev, in 1999.
  • Investors are offered first subordinated bond issue by a Middle Eastern financial institution, lead managed by Deutsche Bank and UBS.
  • Erste Bank launches The New Europe Blue Chip Index, covering the largest C&E European stocks traded on the Vienna stock exchange.
  • CDP’s latest issue shows the benefits of looking beyond the usual suspects to banks that offer strong secondary market support and enhanced distribution.
  • Concerns about hedge fund positions in the face of Refco’s collapse have been overstated. The real consequence should be that investors are more wary of what they buy into.
  • The competitive spirit in investment bankers at CSFB and Morgan Stanley is alive and well. But instead of the usual battle to win business from clients or trading head to head, they clashed on a non-financial field.
  • It’s good to see that the world’s leading finance ministers slum it on the same flights as us mere mortals to the IMF/World Bank meetings. For who should be on the Virgin flight from London Heathrow to Washington, DC, than UK chancellor Gordon Brown?
  • San Francisco likes to think of itself as the most liberal US city. Every May, for example, the famous Bay to Breakers race takes place.
  • Equal opportunities mean that the City of London is no longer just a boozy boys’ club – and rightly so. But plying punters with alcohol and beautiful women is still a great way to promote your product, even in these politically correct days. Just ask Threadneedle Investments.
  • China’s inefficient economy is under threat because its capital costs are set to rise, but it is as likely to falter because US consumerism hits the wall. And there are signs that American profligacy cannot be sustained much longer
  • Hybrid corporate bonds might be the new hot product of the Eurobond market but originators’ hopes for a deluge of new issues have not been fulfilled.
  • With an amazing recovery from the brink of collapse and a comprehensive debt restructuring, everything seems to be going right for the Dominican Republic. But all the old economic weaknesses are still there and they need urgent attention. Felix Salmon reports.
  • In the first of a series of articles, Euromoney examines the status of pension reform in two countries at the extremes of Asia’s pensions revolution, Taiwan and the Philippines. We ask the authorities charged with pension reform in these economies about plans and progress, challenges and expectations.
  • Zhou Xiao Chuan, governor of the People's Bank of China, tells Sudip Roy why the renminbi was revalued and what financial reforms are next on the agenda.
  • Hedge funds are overflowing with money, and margins on traditional strategies are shrinking. One solution to their search for returns is to offer their services to companies in need of financing. Some are nervous about taking up the opportunities but others are discovering just how useful these new financiers can be.
  • Spot FX prices are so tight that it is almost impossible to make a profit from market making. Some providers are going to struggle to remain profitable, which might not be a bad thing.
  • Recent popular new issues rapidly faced heavy trading and price falls. With the tendency of speculative money to disappear as quickly as it arrives, it remains to be seen whether it will continue to plague IPOs later in the year.
  • But the former Bundesbank head defends the creation of the euro.
  • Regulatory pressure has forced a crackdown on transaction delays.
  • But can their value surpass the underlying market?
  • But withdrawal of investors with unrealistic expectations seen as advantageous.
  • In another sign of the rapid modernization of China’s capital markets, the Asian Development Bank and the International Finance Corporation, the private sector arm of the World Bank, became the first foreign institutions to issue renminbi-denominated bonds, known as panda issues.
  • Korea’s love-hate relationship with foreign capital continues. In October, the government announced that it would be seeking tax payments totalling $210 million from five foreign private-equity investment firms that relate to profits earned from investments in Korean businesses.