The 2007 guide to Portugal: download PDF

Are you fully up to date with developments on Europe's exchange traded fund market? With experts predicting rapid growth in the next few years and demand for the product from both institutional and retail investors intensifying, it is essential for industry professionals to keep ahead of the game.

Published in conjunction with: Global Investment House • SAMBA Financial Group

Latin America is on the move, undergoing an investment and financing boom unprecedented in its history. Latin American companies are acquiring globally, expanding regionally, and investing heavily in productive capacity, and R&D. Infrastructure projects are proliferating throughout the region. These developments reflect the region’s positive economic backdrop and corporate confidence in the economic policies and political stability that have come to characterize most of the region for the past few years.

Published in conjunction with: ABN AMRO Private Banking • Banco Urquijo • Bank Delen • Bank Gutmann • Citi Global Wealth Management International • Eurobank EFG Private Banking • Marfi n Popular Bank • Sal Oppenheim • SG Private Banking • Yapi Kredi Private Banking

Do you know your Apportionment from your Binary Options? Your Collateralized Obligations from your Gross Redemption Yields? If not, you needn’t look any further as this exclusive downloadable guide brought to you by Euromoney has over 30 pages of terminology from the financial industry explained.

A degree of blurring and overlapping in the terminology of the banking, insurance and investment management industries has been inevitable. This guide aims to demystify many of those terms, bringing some of the more frequently used technical expressions in all three disciplines into a concise, single volume. We hope it will serve as a useful guide for market participants in all three areas of the financial services sector.

Bank of London and the Middle East (BMLE) has advanced its bid to provide a bridge between southeast Asian and Middle Eastern Islamic finance. The bank, which became London’s second independent wholesale Islamic bank when it opened at the beginning of July, announced at the beginning of August that it had appointed a head of structured finance, Derek Weist. Weist comes to BMLE from ABC International Bank, where he was European head of Islamic banking and head of Islamic asset management. BMLE’s CEO, Humphrey Percy, says he hopes to expand their team from 35 to around 65 people over the next two years.

The governor of Sama has led the Saudi economy through a turbulent but ultimately prosperous period during an unprecedented term of almost 25 years.

The CEO of a London-based product design and consultancy firm has told Euromoney his team has developed a Shariah-compliant futures contract which he says will "revolutionize" Islamic finance. Humayon Dar of BMB Islamic, a specialist Islamic finance company, hopes work on the contract, which he says has already been approved by Shariah scholars, will be finished by the end of the year. He says it should be ready to go on the market during the first quarter of 2008.

Citi has joined its emerging markets credit and global credit trading businesses. Carey Lathrop is the new head of the group, replacing Jim Higgins and Dave Pichler, who are leaving the bank. Lathrop has been at Citi since 1988 and was head of the investment-grade syndicate until 2003 when he took over emerging markets credit trading.

In the week of August 13 participants in the financial markets – credit traders, equity investors, heads of repo desks, hedge fund managers, risk controllers, originators and capital markets bankers, credit strategists, treasurers, chief financial officers – began to lose faith in the financial system itself. But why? What happened in this momentous week and how did it affect the financial global markets? Peter Lee was pounding the sidewalks of New York, sharing the bemusement of Wall Street.

Against the background of falling oil revenues and an ambitious five-year plan, Syria is taking its first steps towards a more liberal economy. Mohammed Al-Hussein, minister of finance, spoke to Euromoney about overhauling public expenditure, issuing treasury bills and bank ownership.

With successful IPOs completed and the domestic economy humming, China’s banks have never been in better shape to venture overseas, and there are compelling reasons to do so. Chris Leahy reports.

"Our aim is to provide long-term capital growth from an investment portfolio consisting of Iraqi and Iraqi-dependent securities." So reads the opening line of a monthly report for the Babylon Fund, a long-only mutual fund run by Godvig Capital Management, which is domiciled in the British Virgin Islands.

In a further sign of the burgeoning geographic ambitions of companies from Kazakhstan, oil and gas firm KazMunaiGas (KMG) has bought a 75% stake in Romania’s Rompetrol Group.

The Brazilian has brought a sense of euphoria back to the country and established it one of the four key emerging nations, as part of the Bric group.

Repricing in the leveraged loan market means that some CLO managers have been having a field day.

Al Gore, the former vice-president of the US, is the most high-profile figure in the fight to force action to combat global warming. He explains why a new approach to investment is needed, adopts an unusual position in the carbon tax versus cap-and-trade debate, and says banks are generally ahead of the game – but still have a lot more to do.

Bankers with emerging markets backgrounds are taking most of the senior positions in their firms.

Germany’s banking system is in dire straits, and the answer could be a radical one.

A broken watch shows the correct time twice a day. I have been a high priestess of gloom for at least a year and finally I can straighten my spine and look you in the eye. There were others who felt uneasy. Many senior bankers told me that the risks being taken were unsustainable. However, it was the investment banker, Paul, who put it most pungently.

"Actually, now’s not a good time"

Have policymakers sent the wrong signal to financial markets?

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Korea’s new found openness to foreigners, as it strives to become a regional financial centre, is about to face its first test.

Baring Asset Management says the fallout from the sub-prime worries in the US is creating buying opportunities in emerging Europe, which investors would do well to take advantage of.

Fixed-income funds hit hard by CDOs/sub-prime troubles.

In any economic downturn, banks are nearly always the first businesses to suffer, which is why the recent spike in credit growth among Korea’s banks looks alarming.

With various trading platforms reporting record volumes, it would be easy to think that foreign exchange had emerged from the wider market turmoil in the rudest of health. But some market participants fear that serious fault lines have been discovered in derivatives.

Lehman Brothers is the latest bank to tap into the growing demand for FX indices (see the weeklyFiX, August 24: "Now is the time for investable FX indices"). Its FX indices (LBFX) track the performance of a long position in G10 currencies against the US dollar. Total returns are calculated daily and incorporate spot and carry return components.

Jerome Cohen has joined Standard Chartered after a 13-year stretch at ABN Amro. In his new role, Cohen will look after Standard Chartered’s complex FX risk team based in Singapore. He will report directly to Richard Leighton, the bank’s global head of FX.

Mortgage securitization by Brazilian banks has huge potential as the mortgage market is still worth only 2.2% of GDP.

The banks look to be overstretching themselves in borrowing abroad to fund increasingly risky domestic lending.

Merger talks between E*Trade and TD Ameritrade could be a sign of things to come.

According to a study by research and consulting firm Greenwich Associates, hedge funds generated nearly 30% of US fixed-income trading volume last year.

Independent research firms feel the squeeze as fund managers consume more but spend less.

Two approaches to replication leave a gap in the market.

The problems in the SIV sector are not only the result of funding and mark-to-market distress, but also because of sloppy structuring in the first place.

Population-growth and climate trends point to the growing importance of agricultural commodity markets.

Internal Revenue Service regulations that become effective in January next year are forcing US hedge fund managers to re-evaluate how they defer fees.

In 2006, the top 20 hedge fund and private equity fund managers earned more in 10 minutes than an average worker in the US made in the entire year, according to a report by advocacy groups Institute for Policy Studies and United for a Fair Economy.

A research note from macroeconomic research consultant Capital Economics says that current market turmoil will lead to hedge fund losses but performance won’t be as bad as feared, and investors are unlikely to turn away from the asset class.

Naguib Sawiris, the chairman of Orascom Telecom, has established an emerging market operation that is one of the world’s strongest-performing companies. Now he is turning his attention to Europe. He tells Chloe Hayward why his business is one of the best.

Despite the fallout from US sub-prime woes, analysts are optimistic about prospects for the global economy, as commodities remain strong. But the US drops out of the top five in Euromoney’s latest country risk rankings. Oliver Hexter reports.

Mohammad-Jafaar Mojarrad, deputy governor of the Central Bank of Iran, speaks to Mark Johnson about the bank’s efforts to control inflation, curb exchange rate instability and cope with the difficult security situation.

No one doubts that China’s banks will make acquisitions abroad. What is less clear is when the buying spree will start and what international expansion strategies the banks will deploy. The answers might not be obvious. Chris Leahy reports.

A fundamental change to the terms of banks’ financing is likely.

Market-making commitment is under pressure.

The global economy may be strong, but that does not make it immune to cyclical liquidity contraction.

Cash-strapped Belarus has finally made it onto the international ratings map – both Moody’s Investors Service and Standard & Poor’s have assigned it ratings ahead of a planned debut sovereign Eurobond, which should be launched in the fourth quarter. Moody’s rated the country at its Ba2 level for foreign currency borrowings, and S&P graded it B+.

The Turkish banking regulation and supervision agency (BDDK) has prevented Greece’s Alpha Bank from completing its acquisition of a 50% stake in Alternatifbank.

Lebanon’s banking sector is proving surprisingly resilient in spite of dire economic conditions, according to a recent report issued by one of the country’s largest banks.

Kuwait Finance House is eyeing up certain branches of Malaysia’s RHB Bank, according to Salman Younis, the chief of the Gulf bank’s Malaysian unit. RHB Bank has obtained regulatory approval to start the sale talks but the Malaysian unit of KFH was still awaiting the nod from Malaysia’s central bank to begin discussions. At the moment there are up to 30 branches that could change hands in the next few months.

Too many sellers and not enough buyers curtail market growth.

National Bank of Kuwait is hoping to gain a bank branch licence in Syria soon. The bank is still preparing its application but expects to get the green light during the next two months.

Moody’s finally upgraded Brazil’s foreign and local currency debt last month to Ba1 from Ba2. The agency also raised the country ceiling to Baa3. This moves brings Moody’s in line with S&P and Fitch, which already have Brazil at BB+ and have positive and stable outlooks on their respective ratings.

Hugo Chávez, president of Venezuela, announced that from this month the country will alter its time zone in order to boost the amount of daylight that residents receive. Chávez has already changed the country’s name, redesigned its flag and altered the coat of arms as he pushes his populist policies.

South African financial services group PSG Group says that it will seek a secondary listing on the London Stock Exchange. The group, which is involved in private equity and corporate finance, financial advisory services, assurance operations and fund management, says it will issue up to 18 million shares to raise up to R400 million ($55.28 million) before the secondary listing on the LSE, if market conditions permit.

BNP Paribas, through its Cetelem subsidiary, bought Banco BGN, a leader in consigned credit in Brazil, at the end of July.

Austria’s Wiener Börse has added Ukraine to its stable of central and eastern European partners, signing a memorandum of understanding with the PFTS exchange, the largest of Ukraine’s six exchanges, with a market capitalization of €55 billion.

In August the markets rocked and, in turn, Argentina was dumped. Chloe Hayward goes to Buenos Aires to find out why.

Peru’s economic miracle has taken it to the threshold of investment-grade status and enthused the country’s local and foreign bankers, who are rapidly broadening their corporate and retail markets. Leticia Lozano reports.

Jones Lang LaSalle, this year's winner of the Euromoney/Liquid real estate poll, is expanding with the global real estate markets. CEO Colin Dyer explains why a local feeling is important in a global market, and why sustainability makes business sense.

Serbia’s equity market has spent most of the year firmly in positive territory. But can the good times last? Guy Norton reports from Belgrade.

While one country goes from strength to strength, the rest of Latin America is seeing very slow growth in funds. Helen Avery looks at the opportunities available to managers in the region.

Companies from central and eastern European countries already in the European Union have adopted an increasingly aggressive strategy of making acquisitions in their faster-growing non-EU neighbours. The aim, it seems, is to gain a foothold before traditionally stronger western European and north American firms scoop up all the best deals. Dominic O’Neill reports.

A return of normal attrition rates does not spell the end for hedge funds and many will profit from market dislocations, says Neil Wilson, editorial director at HedgeFund Intelligence.

But the flood is likely to be smaller than some bullish observers expect.

It’s not an impressive sight. Senior executives of leading financial firms have been castigating the media and investors for over-reacting to the US sub-prime mortgage crisis, insisting that their own firms remain sound and yet simultaneously pleading with the central banks to come and bail them out. It’s either a crisis or it’s not, guys. So which way do you want it?

The IMF has mandated Publishing Technology, an AIM-listed provider of publishing-specific software solutions, to create an e-library, bringing all of the IMF’s resources online.

Funds of hedge funds with underlying managers that have gone sour are understating the losses they have incurred.

The liquidity crisis that blew up out of the sub-prime credit downturn reveals big gaps in understanding between senior managers at banks and the credit structurers. It also poses many questions to regulators and investors. Fairly sharing out the blame and guessing what comes next remain challenges, finds Peter Lee.

Banks have come to realize that to make money from emissions trading markets they would do well to tie up with the consultants that understand the technicalities and with the corporates that own Clean Development Mechanism schemes. Peter Koh reports.

Market forces have the best chance of driving significant actions that will boost climate change. However the forces of resistance are strong – both from entrenched interests and the green movement itself. Charles Dumas of Lombard Street Research argues for the nuclear option.

A growing social conscience about the environment has opened up new technologies and markets that offer hedge funds new areas in which to find alpha. But it is still a nascent area and the number of players is small. Helen Avery interviews four managers to see how they are approaching the emerging asset class.

After every great party comes a reckoning. Because they overindulged sub-prime borrowers with unprecedented excess credit, US financial markets are facing a long and severe hangover. The American dream of homeownership for all has turned sour, while cleaning up the mess will be painful. Amid the finger-pointing, dislocation and illiquidity, though, fortunes will be made. Alex Chambers reports.

Indonesian companies have chosen to fund their businesses in esoteric ways, and that may be at the expense of developing a mature equity market. Old habits will prove tough to change. Chris Leahy reports.

UBS may want to forget much of this year following the closure of its hedge fund, the departure of senior personnel and a profits warning for the second half of the year. Some investors are even calling for the group to sell its underperforming investment bank. Could the saving grace be its emerging markets business? Sudip Roy asks Huw Jenkins, CEO of the investment bank.

Africa is the last frontier. There is nowhere attracting more pioneers than Nigeria. With its large and innovative workforce, its attractions are obvious. But is it safe as an investment? Rupert Wright reports from Lagos.

Several of the most important countries in the Caribbean are considering setting up a regional stock exchange, as capital markets in the region become more integrated. The stock exchanges of Trinidad & Tobago, Jamaica and Barbados already have compatible trading platforms, and their regulators are now exploring ways in which the bourses could become further linked. They are also considering a pan-Caribbean regulatory authority for capital markets, as a precursor to introducing a single currency.

Just when liquidity on Wall Street was starting to dry up in the summer, one US bank was taking it to a whole new dimension.

Brazil plans to allow the country’s mutual funds, which have $525 billion in assets, to invest an unlimited proportion of their portfolios in overseas assets by the end of this year.

Three years ago Khazanah, Malaysia’s state investment body, was instructed to become activist, holding on to most of the state’s corporate holdings rather than privatizing them, and setting tight performance targets. Chris Wright assesses the successful reconstructions, such as Malaysia Airlines, and those still under way, as at car maker Proton.

Despite growing market volatility and the fallout from the US sub-prime crisis, Latin American stock markets remain hugely profitable after a three-year bull run. Investors worldwide are keen to get a piece of the action. With plans for regional stock exchanges and cross-border trading still at the draft stage, investors are turning to exchange-traded funds (ETFs) to get exposure to such equity markets as Brazil’s Bovespa and Mexico’s IPC index and tap into high-yielding shares.

Chi-X, the pan European alternative trading system (ATS) operated by Instinet, is starting to make waves, winning significant market share in certain stocks on some days.

NBG, Greece’s largest bank, is doing well out of a domestic growth surge but has recognized the need to find the fastest-growing, most profitable parts of the market. The same strategy is being applied to its ambitious expansion programme abroad. Laurence Neville reports.

Is central Asia of the verge of an Islamic banking boom?

Bankers at Citi’s Asian headquarters in Hong Kong were stunned when Jeremy Amias, managing director and head of fixed income, currencies and commodities for the region, resigned late in August to join Noble Group, a Hong Kong-based supply chain manager of commodities and other resources products, as chief operating officer – finance.

Hedge funds should broaden their horizons beyond Brazil to the rest of the region in their search for yield, says Lou Gerken, chief executive of Gerken Capital Associates (GCA). Although there are 148 hedge funds in Latin America, only nine are not based in Brazil and solely focused on the region’s biggest economy. But now it would seem that investors, such as GCA, are seeing an opportunity across the region as countries such as Peru and Colombia, as well as Brazil and Mexico, are set firmly on the route towards investment-grade status. On top of this, liquidity in the region has been improving, although mostly in Brazil, which can now give funds a choice of nearly 60 stocks to short.