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September 2000

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  • The great triumph of last year’s IMF/World Bank meeting was the unveiling of an agreement on debt relief for heavily indebted poor countries. But now that the promises are coming due, the international financial institutions are claiming poverty. This is special pleading - they have more than enough resources to cover the entire $45 billion multilateral share of the debt. The familiar cycle of debt and default will repeat itself, Adam Lerrick argues, unless the reform required of borrowing nations is matched by reform in the agencies themselves.
  • Brazil looks set to meet fiscal targets agreed with the IMF and also seems to have inflation under control. But fiscal discipline has rested on increasing revenues rather than cutting expenditure, a course that will eventually restrain rather than promote growth. Reform of the tax and welfare system has barely been tackled and doubts persist about whether the government has enough political clout to see it through. A key gain is that the real economy is moving out of stagnation and into growth. Jonathan Wheatley reports
  • Few banks better illustrate how the market has shifted from cashflow to synthetic CLOs than Deutsche Bank. The bank has been one of the biggest issuers of conventional CLOs, securitizing several billion euros-worth of corporate loans through its Core series of transactions in 1998 and 1999.
  • Asia’s equity markets have seen their fair share of triumphs and disasters in the past 12 months, with technology stocks still baffling market watchers in some markets and seducing them in others.
  • As the huge conglomerates that have long dominated Germany's economy transform themselves into sleek, focused businesses, a procession of corporate assets has come to the market.
  • The economic boom of recent years has created a large class of wealthy individuals with money to spare. These high-net-worth individuals now form the most enticing target market for fund managers. Meanwhile the internet is democratizing financial services, in the process opening the markets up to a swathe of new private investors. The pile-it-high, sell-it-cheap supermarket philosophy which has already swept through the US is now set to engulf the rest of the world. What does this mean for the markets? Julian Marshall reports
  • Financial talent is hard to come by these days, as any headhunter will confirm. And it can be even more difficult to keep. Case in point: Ricardo Hausmann, until recently the Inter-American Development Bank’s chief economist. Hausmann joins the Harvard faculty this month. But don’t expect him to be saying many good-byes. The international financial community seems bound to hear quite a bit more from this dynamic player. Hausmann shared some of his characteristic all-or-nothing views with Euromoney’s James Smalhout as he was packing his bags for Cambridge
  • In the heartland of Gotham and the Bay Area of San Francisco, dwarfed by the high-rise headquarters of those they seek to challenge, lurk a select few individuals waiting to strike. These men are behind the mutant companies seeking to change the dynamics of equity capital-raising forever. They are much smaller than their prey, but less weighed down by legacy systems. The time has come for the internet-based new issue houses to show what they can do, reports Antony Currie
  • Washington wags used to quip that former IMF managing director Michel Camdessus wanted to be “the bride at every wedding and the corpse at every funeral”. They had a point. Camdessus put the Fund on an ambitious course to be many things to many people during his 13-year tenure. That ended in February and today his successor Horst Köhler is getting back to core principles. He says he wants a leaner, meaner IMF. Now he has to deliver. James Smalhout reports
  • Taiwan avoided the excesses of Asian equity market euphoria last year and has escaped the worst of the stock market corrections in 2000. Some imaginative plays have helped it to the top of the Asian primary equity market this year. But even now concerns about a slowing economy, political uncertainty and a fragile banking system have many analysts believing the market has peaked for Taiwan issuers. Gill Baker reports
  • There's a lot of hot air in Khartoum, and according to one lawyer working for Talisman Energy, the Canadian oil explorer, not all of it is blowing in from the Sahara. "Well, if you include planting date trees along the roads adjacent to the Nile - well yes, I suppose the infrastructure is improving." He pauses: "Oh wait, they died. Nobody watered them." The taxi driver swerves to miss a huge pothole in the main road and then quickly veers back into the street in an attempt to avoid those sleeping on the footpaths.
  • By most economic and development measures, China would seem to have taken a firm lead over India in the great race between these two Asian contenders to become regional and global economic superpowers. Yet India, despite its slower economic growth, its poorer yet faster-increasing population and its confused politics, now has thriving new-economy sectors.
  • The increasing pace of developments in both the syndicated loan and the debt capital markets
  • After the fanfare of the meeting between chairman Kim Jong-Il and president Kim Dae-Jung in Pyongyang in mid-year, moves toward a closer relationship have been slow. North Korea’s Tokyo-based unofficial spokesman, Kim Myong-Chol, has predicted peaceful reunification of Korea within five years. It might happen. But the road to unity will be longer and harder than was the path to German unification, finds Kevin Rafferty
  • At some point the government plans to privatize the Hong Kong Airports Authority, and is expected to give it more attention once it has sold off the Mass Transit Railway Corporation (MTRC).
  • To date, most Arab countries have been insulated from outside pressure due to highly protected markets and huge oil reserves. But foreign competition is set to increase, especially for markets joining the World Trade Organization. The biggest banks in small countries will have to look outside their domestic markets for growth, either through acquisitions or alliances. Darren Stubing reports
  • The boom in yen-denominated bond issuance looks likely to be sustained. Foreign corporates are coming to the samurai market because they need yen funds, not because they intend to swap into dollars. There’s also strong demand for emerging market sovereign bonds from Japanese investors starved of yield by low domestic interest rates. Anja Helk reports
  • Conversation in Kazkakhstan in recent months has centred on one topic: oil. What appears to be a major new find has excited locals, multinationals operating in the energy sector and buyers of an oversubscribed sovereign Eurobond. The prospect of this impoverished country, where the average wage is barely $100 a month, becoming the next Kuwait has also enabled the nation teasingly to play prospective bride to both the West and Russia. Ted Kim reports
  • The "Turn Prague into Seattle" slogan has been pinned to thousands of protesters' T-shirts, websites have been set up, and accommodation organized months ago. The protesting community has prepared well for the 55th annual IMF/World Bank meetings from September 19 to 28.
  • It has been a busy year for presidential and parliamentary elections - and coup attempts. Throw in worker unrest (Peru, Ecuador, Ghana), violent separatism in Indonesia and looming emerging market elections and it would be wise to expect big changes in Euromoney’s first Country Risk ranking in 2001. Keri Geiger reports
  • Last month Freddie Mac did something that solid, dependable US agencies are not supposed to do: it took a gamble. It announced that it would start borrowing large amounts in euros.
  • The ebb and Flow of the Asian debt and equity markets in the past three years has inevitably brought upheavals in investment banking in the region, and it looks as if there are more to come. Avinder Bindra, Citibank's outgoing head of global loan products of Asia, Japan and Australia, foresees continued consolidation among banks, with the number of loan arrangers already diminishing because of mergers involving Chase and Chemical, Deutsche Bank and Citibank. Twenty years ago there were 20 loan arrangers on the scene, now there are eight or 10 globally. There are tentative signs of the Japanese banks coming back into the Asian market and rebuilding assets. "Competition is there for banking lending that would not have been the case a year ago," says David Russell, executive director for debt capital markets at Nomura International in Hong Kong.
  • The policy team of new Mexican president Vicente Fox has thought of everything. An impressive set of reforms covering the central bank, capital markets, the fiscal deficit, the energy sector and judiciary are all laid out ready. But can they be got through congress and made to work free from interference and corruption? Mexico is facing one of the biggest make or break periods in its history, writes Andrea Mandel-Campbell
  • Equity capital market bankers are in a state of shock. It’s not simply that their market has seen record volumes of issuance this year. It is rather that the international equities market has gone through an entire lifecycle of change in less than 12 months. Michael Peterson reports
  • Emerging markets may be back in favour but few investment markets are as exotic as Palestine.
  • Forewarned is Forearmed: or How to survive in some of the riskiest business travel destinations in the world
  • Delegates at the IMF meeting in Prague this month will have a variety of cultural events to enjoy away from the main event.
  • A year is a long time in the capital markets and who better to demonstrate it than those consummate Financial politicians in Malaysia.
  • If a market is mature when its founders move on, the Czech Republic has Finally come of age. Richard Wood was one of the First expatriates to arrive in Prague after the fall of the Berlin Wall and built from scratch the internationally respected stockbroking Firm Wood&Co. But ever alert to the prospects for exciting times and doing business, Wood has recently moved to Istanbul.
  • "Ever since foreign banks were able to open representative offices we were confident that the door would open wider and wider," says Samuel Lau, manager of HSBC's Beijing branch office. "But we never knew when or how far the door would open. [China's impending membership of] WTO establishes a Firm timetable which is important in terms of planning future resource allocation."