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September 1999

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  • ARAB 100: Methodology
  • All you need to make good money in Brazil is a banking licence, a few retail outlets and faith that your biggest customer will keep up payments. You don't need to worry too much about credit analysis, operating efficiency or branding. Risk-management skills may help you make even more money, but if you don't have them, relax, you should still come out ahead. Michael Peterson reports
  • The dynamics of the US equities market are such that the old system cannot last much longer without fundamental change. Internet trading, the recent appearance of electronic commissions networks, forthcoming shorter settlement times and decimalization of stock quotes are all turning the screw. Antony Currie reports.
  • World Bank president James Wolfensohn believes the Bank is becoming a more caring place, closer to the client it's trying to serve. One advanced management course includes a taste of poverty: living a week in a slum or village. Social aspects must match financial and macro concerns, he tells James Smalhout
  • "Unreal city," wrote TS Eliot about London in his 1922 poem The Wasteland. If London induced feelings of bewilderment in Eliot one struggles to imagine what he might have thought about Washington DC. Between M Street in Georgetown and Independence Avenue on Capitol Hill are a couple of square miles into which many of the world's most rarefied institutions are concentrated. Here decisions are taken with resounding affects both across the US and the world. Yet the institutions are cocooned from the actualities over which they preside. There is an air of unreality about majestic Washington.
  • Edited by Brian Caplen
  • Equities might enjoy all the glory at the moment but watch out for credit. This techno-laggard of the financial markets is set for an electronic great leap forward. If proof were needed - even the venerable CBOT has been showing interest. Antony Currie logs on.
  • Emerging market bond investors have up to now been extraordinarily ill-served by the index compilers. Only JP Morgan has made a concerted effort to provide a benchmark index to track emerging market debt, and its Emerging Market Bond Index (EMBI) and EMBI+ have as a result become the market standards.
  • The emerging markets are bouncing back - at least some of them are. While they do, the market is holding its breath as crisis-hit countries implement fiscal and monetary reforms. And while economists believe growth rates will improve, they are also resigned to sovereign defaults on foreign debt. Commentary by Rebecca Cicolecchia, research by Alexa Marx.
  • World Bank guarantees are a new way to help crisis-hit countries back into the private capital markets. But the Bank still wants to lend money. James Smalhout reports
  • Last month Front End had a little jest at the expense of one of the runners in the Chase Corporate Challenge fun run recently held in London's Battersea Park. One brave soul, you may recall, was spotted heading for the finishing line in a Yamaichi T-shirt.
  • Just suppose the World Bank's major shareholders decided they could use their money better elsewhere. Who would get the mandate to unwind or sell the bank's loan portfolio and how would it be done? One consultant, who prefers not to be named, suggested this as a hypothetical exercise, but colleagues feared it would be biting the hand that feeds them.
  • Management sages are rife but the office is an unenlightened place. Bob McGinnis, head of consumer asset-backed debt at Greenwich Capital in the US, complained to Euromoney that the French windows in his office didn't open and he couldn't practise his golf swing. When his comments found their way into print he was deluged by self-righteous colleagues and clients deploring his waste of valuable time contemplating leisure. For them the best office is one with no windows and the employees locked inside.
  • Philosophers have debated ethics for thousands of years and come up with more questions than answers. But now a super-smart Swiss asset manager has launched an ethical fund using a quantitative model to determine how naughty or nice companies are. Their efforts may not impress followers of Plato, Kant and Hume but will they persuade socially-concerned investors to part with their cash?
  • Deutsche Bank speaker Rolf Breuer recently boasted that his bank's value-at-risk (VAR) models were the only ones in Germany to be approved by the supervisors in Berlin.
  • Fringe protesters at the IMF/World Bank annual meetings are nothing new. But once they could be easily dismissed as Utopians or religious nutters not worth taking seriously. No longer.
  • Issuer: EuroCredit CDO 1
  • As Daewoo, once symbolic of the strength of new Korea, is forced into dismemberment because of crippling debt, the government hopes the demise of the second largest of Korea's chaebols will spur others to restructure to avoid a similar fate. However, there is a worry that economic recovery has taken some of the pressure off chaebol chiefs. Steven Irvine reports
  • The Asian crisis delivered a devastating blow to the region's sprawling conglomerates. For years they diversified and grew rapidly, feeding on a rich diet of debt, much of it in foreign currencies. Then suddenly their markets collapsed and their debt service costs soared. But the bad times are ending and after drastic restructuring the best companies are on the move again. Alex Mathias reports.
  • Meet the new breed of Asian banker - the ones who survived the crisis and are now able to put their hard-learned lessons into practice. They are leading the way into a new era of openness and transparency in Asia.
  • Banks, like priests before them, have survived in part because of their monopoly of information and access. The internet is changing all that. As Steven Irvine argues, the data and choices that can be accessed with a mouse click must mean the death of banks as we know them.
  • Credit and swap spreads have already risen in anticipation of the world's financial markets clamming shut this December. Borrowers and bankers talk nervously about the disappearance of liquidity and short-term funding in the run-up to year 2000. Central banks are on standby. So are some traders who hope to take advantage of illiquidity and mispricing. The frustration for many is that it is their own contingency plans, not their computers, that threaten chaos. But no-one knows how fierce the full millennium effect will be. Marcus Walker reports
  • As the risk of a round of sovereign bond rescheduling looms, bondholders are dusting off the documentation to see what it says. By Christopher Stoakes
  • In the run-up to the European single currency there were expectations of major political changes that might take place after monetary union leading to more decentralized funding, with local authorities and regions issuing more and sovereigns less. Generally in the eurozone this change has been slow in coming. Spain is a key test case. Any significant increase in debt issuance by local authorities may hinge on political horse-trading between the central government and the "fast-track" autonomous regions.
  • In the past six months international investors have differentiated central and eastern European countries they once grouped together. Economic performance and market development have varied widely, partly reflecting how badly each country was hit by the Russian crisis. The gap between the richest and poorest is growing, and there is increasing polarization between the first wave of applicants to the EU (Poland, Hungary, Czech Republic, Estonia, Slovenia), the second (Bulgaria, Romania, Slovak Republic, Lithuania, Latvia), and the former Soviet republics. Rebecca Bream reports on Poland, a leader in attracting foreign interest.
  • A new advisory science has been born this year in Europe: how to launch and defend hostile bids. The aggression and free-flowing finance are straight out of America, but the old continent's politics add an extra level of difficulty. The latest landmark battle, following the struggles for Telecom Italia, Gucci and Société Générale, is raging in the French oil sector. TotalFina's raid on Elf Aquitaine, and Elf's counter-attack, highlight once again the primacy of politics in shaping French business. The battle also provides Europe-wide lessons for the M&A tactical manual.
  • After eight years of campaigning, Germany's private-sector banks finally won a judgment in Brussels against WestLB's contentious capital-raising scheme, striking a blow at the financing privileges of state-owned banks. But WestLB chairman Friedel Neuber barely missed a beat: in less than a month he had demonstrated his political shareholders' loyalty by arranging yet another capital increase. Cowed by an angry government, the private banks dare not take the challenge to its logical conclusion. They fear losing more than they would gain, says Laura Covill.
  • The credibility of the UAE's stock market continues to be affected by the lack of a settlement, clearing and custody system - leaving it highly unregulated, devoid of transparency and subject to manipulation. But, Nigel Dudley reports, a regulatory system now seems on the way
  • Hyperinflation, a stalled privatization process, a lack of raw materials and a national currency near-impossible to convert have understandably encouraged the view among foreign investors that Belarus is an economic basket-case. But, as Theodore Kim reports, for the adventurous it's one of the cheapest places in the world to do business and it does have an industrial infrastructure so massive that it earned a reputation as the assembly plant of the Soviet Union