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

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.

“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]

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.

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.

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.

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.

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.

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.

After a few tough years, the country is on investors’ radar screens again.

Hurricanes don’t just destroy cities: they can also destroy sovereign finances. Hurricane Ivan, for instance, wiped out so much of Grenada’s infrastructure in September 2004 that by the end of the year the country was in default on its debt. Things were not helped when Hurricane Emily struck Grenada in July.

Increasing numbers of pension funds in Europe are making the choice not to use hedge funds in the region since returns have dropped off.

Technology companies have to swallow harsh market truths – and some pride – and give up independence.

Germany is the new battleground for French banks, it seems, with BNP Paribas and Société Générale both making hires. BNPP has hired Menko Jaekel from Citigroup’s Frankfurt office for its DCM financial institutions group’s coverage of Austria and Germany. He reports to Razi Amin and Anthony Fane, co-heads of DCM FIG Europe. The move is the latest in a series of appointments that the bank has made in an effort to grow its covered bond business. In structured products and derivatives it appointed Ralph Heinig and Marc Steiner for the same region.

Just days after Refco announced what it termed “significant volume increases on its professional and institutional FX trading platform, FX ProTrader”, activity on the platform ground to a complete halt.

Three monoline insurers were used to credit wrap Scotia Gas Networks’ £2.22 billion ($3.9 billion) bond sale via sole arranger Barclays Capital, and lead managers Citibank, RBS and DrKW in October. This deal refinanced acquisition loans extended for the purchase of the Scotland Gas Networks and Southern Gas Networks from National Grid Transco in June (five out of nine networks were also sold). Although investors are hungry for stable investment-grade credit (BBB in this case), the lack of financial history – a requirement for an exchange listing – meant that arranger Barclays was required to bring in the monolines – Ambac, FSA and XL Capital. The structure was sliced into 11 tranches and sold to a wide variety of investors (euro and sterling, fixed, floating and index linked). SGN is owned by Scottish and Southern Energy (50%), Ontario Teachers (25%) and Borealis Infrastructure (25%).

Harvard University’s endowment fund has appointed as its head emerging-market legend and one-time candidate as IMF head Mohamed El-Erian. Formerly, El-Erian was running $30 billion in funds at bond investment manager Pimco. He takes over from Jack Meyer who, following complaints about his large compensation package decided to leave with some of his team to run a hedge fund. Meyer is likely to make a success of the new venture given that he has built up Harvard’s fund from $4.7 billion in 1990 to its present $25.9 billion.

Many investors fear October because it is associated with a number of market crashes. But according to research from ADVFN, a pan-European equity markets website, it is actually quite a good month for equities.

As the world awakes to the possibility of a bird-flu pandemic, analysts at CLSA have assessed the economic implications for Asia of an outbreak. CLSA has compiled an index of relative economic risk based on healthcare expenditures per capita, tourist arrivals per capita and total trade as a proportion of GDP. The results might surprise most readers. Based on these three measures, Hong Kong and Singapore emerge as the economies most at risk, followed by China, Malaysia and Thailand. Despite high spending on healthcare, both Hong Kong and Singapore remain highly exposed to the economic fallout from a pandemic by dint of their high dependence on international trade. Each country also has tourist arrivals roughly twice its population.

Turkey looks set to be the next great EU convergence play. Now foreign banks want a piece of the aciton. But the owners of the country's financial institutions are seeking to form strategic partnerships rather than relinquish ultimate control. Kathryn Wells reports.

The Inter-American Development Bank’s new president, Luis Alberto Moreno, speaks to Sudip Roy about his plans to make the bank’s policies more relevant to the private sector in a region that is attracting growing investment inflows.

South Africa’s Standard Bank is poised to buy Bank of America’s Argentina business, although an agreement is unlikely before the end of the year. Standard Bank is leading a group of buyers for BankBoston Argentina, including two wealthy Argentine families. The acquisition would consolidate Standard’s Argentine presence after it announced that it was also waiting for regulatory approval for its purchase of ING’s local unit. Bank of America’s decision to sell is another indication of its retreat from the region. Last year it sold its commercial banking unit in Panama and has also said that it intends to dispose of its businesses in Colombia and Peru. The bank has also announced that it is selling its asset management business in Mexico.

The hedge fund industry has matured at a faster pace than anyone could have anticipated. Sure, there are still problems, but the old habit of tarring all hedge funds with the old brush of suspicion must surely be left in the past.

UK pension funds still have 65% of their assets in equities, but the figure is still dropping, according to European Credit Management, which expects it to fall to 50%.

Kazakhstan – Kazakhmys, the world’s tenth-largest copper producer, should raise as much as $1.4 billion when it floats between 26% and 30% of its stock in London later this year. The company boasts an impressive ebitda margin of 60% and a net margin of 34%. It mines about 90% of Kazakhstan’s copper output. Copper prices have gone through the roof in the past 12 months and demand for the shares reflects this. The share price range had been set at $8.10 to $9.60. Credit Suisse First Boston and JPMorgan Cazenove are joint global coordinators and bookrunners.

47 The percentage contribution of equity capital market revenues to overall capital market revenues at investment banks in the third quarter. The contribution of ECM revenue to overall capital market revenues rose from just 38% in the second quarter, according to Dealogic estimates. 79,400,000,000 The volume of Asia Pacific (ex-Japan) ECM deals in the first three months of 2005. The figure is the highest for the first nine months of a year on record.

In the end the winner was Mohamed ElBaradei and the International Atomic Energy Agency, but a little-known fact is that Hugo Chávez was also in the running for this year’s Nobel Peace Prize. Venezuela’s president was one of an incredible 199 people on the short list for the award. According to Australian bookmaker Centrebet, Chávez had odds of 80-1 to win. Long odds, perhaps, but a whole lot shorter than Tony Blair’s at 500-1 or George W Bush’s at 1,000-1. It’s doubtful that this will encourage a rapprochement between Washington and Caracas.

At long last the first big refinancing of German multifamily residential units is starting to happen. The €1.55 billion Immeo Residential Finance is in effect a new asset class – multi-family residential. The underlying asset is a portfolio of 48,000 units in the Rhine-Ruhr region formerly owned by Thyssen Krupp purchased by Morgan Stanley Real Estate Fund (MSREF) and Corpus. This will be the benchmark for other German multi-family real estate refinancings that will take place in the coming months.

632 The number of entities at risk of downgrade as of mid-September this year, according to a report from Standard & Poor’s.

Quote from Brian Shapiro, president of management and technology consulting firm Carbon360, in regards to the impending registration deadline imposed by the SEC.

General Motors said it had reached a tentative agreement with the UAW to reduce the company’s spending on healthcare benefits and was exploring the sale of a controlling stake in its finance arm, GMAC. Along with its third-quarter results, it announced total planned cost savings of $6 billion over the next three years from a combination of reduced healthcare spending, sourcing cheaper supplies, making job cuts and closing plants, all in an effort to shore up its balance sheet.

Reports that Spanish company Telefónica was in talks to acquire Dutch telecom rival KPN for around $24 billion sent shares in KPN soaring and prompted talk of another round of consolidation in the European telecoms market. KPN denied being in talks with Telefónica.

In the face of an uncertain economic outlook, including rising inflation caused by oil price rises and the scrapping of heavy fuel subsidies that forced rises in local interest rates, the Indonesian government has raised $1.5 billion of bonds. The government’s steps actually helped the issue since international investors felt that the administration of president Yudhoyono is finally getting to grips with the problems facing the country. The government issued $900 million 10-year bonds at a yield of 7.625% and $600 million 30-year bonds at a yield of 8.625%, respectively 329 and 406 basis points over US treasuries.

In another sign of Vietnam’s economic reforms, the finance ministry confirmed in local media that the government had approved the country’s maiden sovereign bond issue. Up to $500 million-worth of dollar-denominated bonds are likely to be issued this year. Moody’s upgraded the sovereign to Ba3 in July.

Venezuela’s president is also unlikely to endear himself to Washington after saying that he has sold $20 billion of foreign reserves, mostly in US treasuries, over the past four months and deposited the funds at the Bank for International Settlements in Basle. A central bank director admitted that Venezuela had sold some of its holdings of treasuries, citing financial reasons. Some analysts, though, reckon the move was motivated more by political reasons.

There are no holds barred in the competition between exchanges. As people arrived to hear a Hans Tietmeyer lecture in the City of London organized by the Chicago Mercantile Exchange, they were greeted outside the venue by young ladies handing out leaflets spouting the benefits of trading FX with Eurex US. It all seemed harmless enough.

1,900 – estimated number of hedge fund managers that need to register with the SEC by February as part of the US regulator’s new rules for the industry.

Denmark’s Saxo Bank has announced that it will open a London office in the “near future”. Lars Seier Christensen, Saxo’s chief executive, says the focus of the new office will initially be purely institutional.

The European Union is introducing the first uniform covered bond legislation. The long-term effects could be beneficial, but some issuers still point to discrepancies between countries that could stifle the development of a cross-border European mortgage funding market. Mark Brown reports.

Global M&A volumes are heading back up to levels not seen since 2000. This should give investors pause for thought: 2000 was, after all, a year of excess. Although the market is very different today, some things never change. Peter Koh reports.

In 2005, while issuers, underwriters, rating agencies and regulators have still been grappling with the question of covered bond identity, investor concerns have been more basic – spreads, yields, and the arrival of new investors. Mark Brown reports.

“You ask a hedge fund manager how quickly can they do a deal. And they reply: ‘Is tomorrow quick enough?’”

Arab banks have sustained the recovery that began in 2002, with Gulf institutions in the forefront. Morris Helal reports. Research provided by Capital Intelligence.

Fears of oversupply fade in Europe.

Why CFOs should stop mistrusting hedge funds

India’s private-equity business is growing fast again. But unlike the late-1990s boom of flows to technology companies, money is heading into a broad range of sectors, reflecting the strong performance of the economy. Kautilya Shastri reports.

Do hedge funds need strategic advice from investment bankers? And do banks need to set up new departments to offer it? Yes, reckon UBS and CSFB; no, say many of their competitors. Antony Currie reports on whether treating hedge funds like other corporate or private-equity clients is the latest development in the industry or just a fancy bit of spin.

Banco Central de Chile president Vittorio Corbo is arguably Latin America’s most respected central banker. He tells Euromoney how he is keeping a lid on the region’s biggest economic danger – inflation. Sudip Roy reports from Santiago.

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