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September 2002

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  • Saudi Arabia’s investment needs are so great that it looks as if economic reform – however halting – will win out over statist, introverted policies.
  • Dubai is busily preparing to host the annual IMF/World Bank meetings in 2003 which it hopes will showcase the city’s credentials as an international financial centre.
  • The IMF has disbursed $13 billion to Tukey this year and claims to see widespread support for economic reform in the country. But the summer’s political crisis has raised the prospect of electoral success for the Islamists.
  • The affair is not over but investors’ passion for a new EU convergence story has cooled. They are beginning to price in the impact of delays to entry for leading candidates, the long run-in for others, and the unlikelihood of rapid single-currency status for any new members.
  • The robber-baron days of the Yeltsin-era oligarchs might be over but high-level power play is still a feature of Russia's economy, fuelled by a still underdeveloped legal system.
  • Businessmen are joining Kazakhstan's democracy movement as independent economic activity hits a ceiling.
  • September 11 awakened financial institutions to the inadequacies of their business continuity systems. Across the industry, much thinking has been done about how to implement such systems. But in the course of the past year, some firms have nodded off again.
  • The Korean government’s sale of Seoul Bank to another domestic player has upset foreign bidders . But the sale is likely to prompt further consolidation.
  • Will it be fourth time lucky for Luiz Inacio Lula da Silva in Brazil's presidential elections? If he wins, the result will not be welcomed on Wall Street. What are the repercussions for Brazil, already teetering on the brink?
  • South Africa’s big banks have first-world management, technology and systems but operate in an emerging market where growth prospects are poor and the future is uncertain. They’re seeking ways to grow without risking the bank.
  • Credit markets have contracted dramatically in recent months and all but the safest borrowers, which have benefited from a flight to quality, have had to pay a high price for funds. On the buy side investors want assurances that they will be protected from risk. The banks that have performed best in this year’s capital-raising poll are therefore those that have come furthest in developing complex products that can save money for borrowers and enable lenders to hedge effectively.
  • MarketAxess has risen to the top of online credit trading through a mix of luck and skill. Now TradeWeb has launched corporate bond trading too. The downturn has helped position them as the two biggest platforms. But they’re competing for a tiny share of overall corporate bond business.
  • China is a massive liberalizing market. Does this mean big opportunities for foreigners to make money? Up to a point perhaps – size of this order is difficult for outsiders to get a grip of and domestic institutions will in any case want the biggest share.
  • A minority of a minority – five holders of part of the 15% active capital of Icelandic mutual savings bank Spron – are crucial to the takeover bid being made by commercial bank Búnadarbanki.
  • The US is unlikely to remain the world’s engine of growth. The trade deficit is at a record high, the federal budget has reverted to deficit, and talk of a fall in consumer spending, even deflation, is growing. The Bush administration appears hell-bent on war with Iraq. Congressional politics are acrimonious and gridlock is the likely outcome of upcoming mid-term elections.
  • Brazilian banks continue to dominate indigenous banking in Latin America and continue to grow despite the economy’s woes.
  • To talk, as many people do, of common technological standards in the drive towards straight-through processing is hypothetical. In the purest sense, there is no such thing. The same can also be said of straight-through processing itself.
  • In my view the bear market in equities will resume beyond the so-called summer rally. Crucially, the huge fall in household wealth will dampen consumer demand and rising risk aversion will delay a revival of global investment. There will also be much weaker corporate earnings growth, making equities overvalued; a weaker dollar spreading deflation into emerging economies; and poor leadership from the US administration on global economic policy and geopolitics.
  • For over a decade the triumph of the Anglo-American model of capitalism seemed assured: but no longer. So what happened to the Washington Consensus, and what new ideology might replace it?
  • Interdealer brokers Cantor Fitzgerald and Icap fought a bitter courtroom battle this year over staff poaching. Now the two are armed for conflict in electronic bond broking.
  • Issuer: Republic of LebanonAmount: $750 millionLaunched: August 2 2002Bookrunner: Morgan Stanley
  • Is the three-year equity bear market nearing its end? Or is it just the beginning of a financial and economic collapse that could shake the very core of the free-market capitalist system?
  • One-upmanship is the norm in investment banking and UBS Warburg and Goldman Sachs have proved it's alive and well after the listing of Bank of China Hong Kong. But rather than the usual "our execution was better than yours" routine, this time the boasting is over who gave the snazziest gift to a client.
  • Kazakhstan has had more success than most former Soviet states in reforming its power sector. Electricity suppliers hope prices can be pushed higher but the abundance of oil and gas will limit rises.
  • Kazakhstan led the world growth table in 2001 and credit rating agencies see it as a sound candidate for borrowing. Export credit agencies are not so confident, pointing in their ratings to paltry political reform and a nepotistic ruling elite.
  • From the highway packed with crawling traffic heading downtown you can see the tangle of buckled carriages skewed across the track. Final test runs of the AirTrain, San Francisco's state-of-the-art driverless airport link, don't seem to be going to plan.
  • India
  • Despite robust GDP growth in 2001 in most Arab countries, their banks suffered falling earnings because of more domestic competition, weakness in global investment markets, tighter margins, and higher loan-loss provisions.
  • Hedge funds
  • Equity exchanges