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October 2008

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  • UBS heads the Dealogic league table for investment banking fees earned between January and September this year. The Swiss bank, which was awarded the title of best investment bank in Asia in Euromoney’s Awards for Excellence 2008, took a 5% market share with $323 million in fees during the nine-month period. Citi and Goldman Sachs were second and third respectively.
  • UniCredit is one of the world’s biggest financial groups but concerns over its capital base have made it vulnerable to panic-stricken investors.
  • It might have been the most turbulent month in memory for global stock markets but equity capital raisings did not grind to a halt. In fact, September has seen a spate of equity raisings from banks despite, or rather because of, the fact that they are at the centre of the market’s turbulence.
  • The US bank (and it will take a while to get used to calling it such) stays one step ahead of the pack through successful capital raisings.
  • The growth in Islamic finance has slowed with the deepening credit crunch but the Saudi Binladin Group has raised the first sukuk for the world’s most holy boom town: Mecca.
  • Exchanges try to steal a march on their rivals.
  • Eurasia Capital Management (ECM) has created the first-ever Uzbekistan-dedicated hedge fund. The Uzbekistan Growth Fund was launched in September with initial capital of just $5 million but ECM founder and managing partner Alisher Ali Djumanov believes that the open-ended investment vehicle could grow substantially over the next couple of years.
  • Bank failures used to be massive news. But with so many cropping up these days they have, like world records at the Beijing Olympics, lost something of their shock value. How then to judge which have made the biggest waves?
  • Citi hired seven sales bankers from Lehman Brothers’ interest rates team last month. It comes as the administrator of Lehman’s remaining European business announced 750 job cuts, predominantly in fixed income, on September 30.
  • Despite initial fears, the foreign exchange market appears to have handled Lehman Brothers’ collapse into Chapter 11 bankruptcy protection remarkably well. According to Rob Close, chief executive of CLS Bank, which settles the bulk of the market’s transactions, few deals that had Lehman as a counterparty were rescinded.
  • Funds seek alternative methods to sell options.
  • Chris Lees has been officially unveiled as the new head of financial institutions group origination in debt capital markets at Citi. He reports to Eirik Winter, head of DCM EMEA. Lees previously spent much of his career at Citi in the European syndicate team where he worked in the high-grade sector. His appointment fills a gap in the origination wall chart at Citi since Alan Patterson moved to run its capital markets product group in March 2007.
  • Longevity risk is a continuing, ever changing problem for pension schemes, determining the assets they have to deploy to cover their liabilities. Seven specialists look at how risk is identified and the different techniques and products available to cope with it.
  • A week after Lehman Brothers collapsed, the United Arab Emirates central bank announced a new credit line of a dirham equivalent of $14 billion. Was it a signal to investors that the federation would not sit by and watch as the economy of Dubai – its second-biggest constituent – went into free fall?
  • The flamboyant stage presence and forthright views of Kotaro Tamura are becoming something of an annual highlight at Euromoney’s Japan Capital Markets Congress, and this year the LDP senator in charge of the sovereign wealth fund committee surpassed himself during an onstage interview that at times reduced a packed auditorium to helpless, if somewhat nervous, laughter.
  • The failure of the US House of Representatives to pass the Emergency Economic Stabilization Act of 2008 at its first reading on September 29 came despite the entreaties of the Securities Industry and Financial Markets Association to its members to call their congressmen before noon that day to explain to them why the legislation must pass.
  • On September 29 the Dow Jones Industrial Average experienced its most severe one-day decline in history. Of the S&P index’s 500 names, just one enjoyed a share price rise:
  • The Lehman Brothers website, may have provided a little insight as to why the bank collapsed last month. According to the Life at Lehman, People section of the website, one employee called Margot at the bank was surprised she made the grade:
  • "I remember going into the Fed for meetings on the LTCM rescue plan. At one end of the table there was Jimmy Cayne, at the other Dick Fuld. Now the table is a lot smaller and the faces are not so familiar"
  • Have the big Japanese banks been over-cautious about buying stakes in troubled western peers?
  • As the financial turmoil claims its latest victims, holders of covered bonds see the strength of their investments.
  • Freddie Mac is seeking to reassure holders of its debt that the preferred stock purchase agreement announced by US Treasury secretary Henry Paulson will protect them, "regardless of who wins the elections".
  • It will take months if not years before we know with any certainty who the ultimate winners from the financial crisis will be. But having purchased the US businesses of Lehman Brothers it seems that Barclays Capital will be among them.
  • Data provider Markit announced at the end of September that it was planning to offer free access to its daily CDS pricing data to non-clients for a limited time. It also announced that buy-side accounts that wanted to confirm index trades would be given free access to its RED (reference entity database) system – again for a limited time. This largesse follows Markit’s decision earlier this year to offer free access to RED for buy-siders that only trade lightly in the CDS market. The moves will be welcomed by the smaller, second-tier institutions involved in the CDS market that have struggled to get access to information following the credit events at Fannie Mae, Freddie Mac, Lehman Brothers and WaMu.
  • The financial crisis has finally taken its toll on the money markets.
  • The relaunch of FX futures by Ice finally provides the CME with some proper competition.
  • The CDS market is trying to withstand the strain of three almost simultaneous counterparty defaults.
  • For so long seen as a banking backwater, cash management’s time has come. Revenues are high-margin, stable and growing. Products such as liquidity management will only grow in importance. And, with the huge client bases involved for the biggest players, it’s a gateway into a lot of other business. Laurence Neville reports.
  • At the beginning of 2007, Euromoney wrote that the retail lending boom in the Balkans was putting pressure on the region’s banking systems and that cooperation between banks and authorities was vital. But as the world’s economic downturn pushes into southeastern Europe, that warning might be going unheeded. Jethro Wookey reports.
  • Surely it was high time Lloyds TSB made a life-changing acquisition? Surely it had the balance sheet to do so? And surely assets were available at a never-to-be-repeated price? Philip Moore put these questions to Lloyds’ finance director less than a month before its shotgun wedding with HBOS. It’s clear that making a transformational deal for the UK bank was only a matter of time.