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October 2007

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  • The allure of private equity to senior banking figures is well documented: why run a business for a bank when you can run a fund for yourself?
  • The industry collectively did not cover itself in glory during the August/September correction. But there is now a rich environment for a wide range of strategies, says Nick Evans, editor of EuroHedge.
  • Pfandbrief issuers were notable by their absence as the covered bond market descended into chaos.
  • Investors may have learnt the lesson that bonds aren’t supposed to provide equity-like returns.
  • More on CLS from The weeklyFiX
  • Absolute Capital Management is restructuring five of its equity hedge funds following the departure of co-chief executive officer Florian Homm, which prompted in excess of $100 million of redemption requests for funds with up to $530 million invested in illiquid US stocks quoted on over-the-counter bulletin boards. Chief executive Jonathan Treacher calls the affair "a significant distraction".
  • Goldman Sachs knows how to spot an opportunity.
  • Buried deep in the announcement of Morgan Stanley’s third-quarter earnings results was a substantial hit from the bank’s newly built hedge funds business.
  • Rumours that RBC Capital Markets had let go up to 40 sales and trading officials in the US were firmly denied by officials at the Canadian bank, who refused to comment on possible redundancies.
  • After the crash, here comes CASH
  • As volatility spreads across the debt markets, the CMBS market is taking stock. Property derivatives are likely to increase volatility in the market and contribute to spread widening just as refinancing activity – a significant driver of CMBS volumes – slows. But as competition between commercial lenders and conduit lenders expands across Europe, the market is looking to new jurisdictions to maintain growth.
  • When China’s leading state-run banks lined up to announce their sub-prime exposure in late August, it was surprising and disconcerting.
  • "If you speak only one language, you are an American."
  • The ADR has been a very important equity market tool for many years. So long in fact that in 2007 the instrument celebrates its 80th birthday. Apparently, the ADR was invented by John Pierpont Morgan, Jr when his friend and fellow American, Harry Gordon Selfridge, the owner of Selfridges, one of London’s most renowned retail stores, asked him to develop a way for Selfridges shares to be sold in New York. Morgan’s good deed for a friend turned into a very profitable line of work, and one that JPMorgan still holds the top spot in. Now the only question that remains is how exactly JPMorgan is planning to commemorate this momentous year.
  • Could problems in the UK inter-bank market have been avoided?
  • "Once you get a contract, unless you screw it up, you get the renewal"
  • Northern Rock’s Granite master trust did launch a deal in September – but Granite Master Issuer 2007-3 was a far cry from what the market had been expecting just a matter of months ago.
  • It seems as if the sub-prime market implosion might have roots deep in the proverbial mists of time.
  • It’s not often that you can walk onto a trading floor and are greeted by England cricket legend Mike Atherton, twinkle toes Mark Ramprakash, champion jockey Frankie Dettori and Olympics silver medallist boxer Amir Khan.
  • "Interest rate cuts will be like Viagra – an artificial stimulus that doesn’t cure the underlying problem"
  • The world’s stock and futures exchanges have benefited handsomely from equity market uncertainty.
  • UBS has continued the revamping of its European debt capital markets business instigated by Roberto Isolani – who became head of fixed-income capital markets, for EMEA and APAC, at the start of this year.
  • The first European bank to be cleared to use one of the new Basle Accord’s advanced approaches – and reap the rewards – is not headquartered in London, Paris, or Frankfurt. It doesn’t inhabit a gleaming tower in Milan or a grand old office block in Madrid. Strictly speaking, it’s not even a bank. Duncan Wood reports.
  • Just over a year on from the initial launch of its marketindex platform in Germany (see Euromoney July 2006), ABN Amro has decided to enter the highly competitive UK retail market. The bank launched marketindex, which is white-labelled from Oanda, in mid-September. The platform provides streaming two-way prices in various currencies, equity indices, commodities and bonds. For legal reasons, these are designated as contracts for difference (CFDs), although in reality there is very little difference from trading the underlying cash products. ABN Amro will act as counterparty to all trades, although all prices are sources directly from Oanda.
  • A year ago, fund managers and analysts were confidently predicting as many as seven landmark IPOs on Vietnam’s stock exchanges in 2007, raising as much as $1 billion each.
  • Hugo Chávez, president of Venezuela, announced in September that his country would expand its petrochemicals industry during the next five years, lifting annual revenues to $100 billion. Chávez said that by 2013, after an investment of $20 billion, the industry will have created 700,000 jobs, 10 times the number employed at state oil company Petróleos de Venezuela. On September 23, the president started a "petrochemicals revolution", which will require 87 plants around the country to produce primary materials and petrochemicals-based products such as fertilizers, plastics and cosmetics. Chávez expects these moves to increase petrochemicals royalties to the government from $340 million this year to $20 billion in 2013.
  • The fallout from sub-prime worries in the US has cast a pall over the equity issuance plans of Russian companies in the wake of the volatility that rocked global stock markets over the summer.
  • The developments will heat up the battle between Qatar and Dubai to become the Middle East’s financial centre.
  • Flotation gives big boost to Zagreb market.
  • After what could be described as a difficult conception and then arduous labour, foreign exchange settlement system CLS has gone on to thrive in the first five years of its life. Lee Oliver reports.