The BarclayHedge CTA Index ended July up 7.08% year to date, outperforming the aggregate hedge fund index by more than 10%. The Barclay hedge fund index, however, returned –4.45% up to the end of July. Returns such as these are encouraging investors to allocate to CTAs away from other strategies, say managers.

It is a sign of the times that, as investment banks in the UK and US downsize, those in the Arab world are doing the opposite.

The Eurobond market has existed for 45 years and its infrastructure reflects that. Bondholder trustees are gearing up to change one aspect that should improve their ability to obtain bondholder agreements. The present system – if it can be called a system – requires bondholders to receive 21 days’ notice of a meeting, which might or might not be quorate. If it is not quorate, another 14 days must elapse before another meeting can take place. The method through which bondholders are notified is equally antiquated. Investors are informed via newspaper adverts or through clearing agents.

MBIA has agreed to reinsure a $184 billion portion of FGIC’s municipal bond book in a deal that reduces risk exposure for the latter and improves the capital position of the former. The solid municipal credits will also improve the risk profile of MBIA’s book. Under the deal, if a credit event is triggered on FGIC, protection buyers have a claim on MBIA for these assets – but there is still some legal uncertainty as to how this process would actually work. In a separate development, FGIC has paid a $200 million settlement to Calyon to commute CDS written on IKB’s Rhineland conduit. FGIC is suing IKB for fraud in relation to the now defunct vehicle.

Asia-focused hedge funds received $530 million in new assets over the second quarter, down from $1 billion in net inflows the previous quarter, according to HFRI. Its Asia hedge fund index has lost almost 14% this year. Recent research by Singapore fund of hedge funds GFIA suggests that performance is better among indigenous managers, and that London and New York will continue to lose market share to Asia strategies.

With a huge pipeline of covered bond issuance planned for the next few months, much is being asked of investors. There might not be enough of them to go around.

Faced with growing evidence that issuers were gaming the scheme, the European Central Bank has finally tweaked the collateral requirements for its repo liquidity programme. Haircuts for ABS and unsecured bank bonds have been increased, the former up from 2% to 12%. This brings the scheme into line with Bank of England and Federal Reserve rules – but in reality makes ECB rules more stringent as the maturities on offer are shorter. The ECB has also tightened the close-link rules so that ABS collateral for which the seller is also swap counterparty is disallowed. Seller liquidity support of more than 20% has also been axed. The rules are likely to have an impact on smaller banks that have relied on ECB liquidity but analysts at Deutsche Bank calculate that the incremental cost to banks following the haircut change is 50 basis points. This means that the ECB window is still the most cost-efficient funding channel available to banks if maturity is not a consideration. "This change alone is unlikely to compel many banks to return to the securitization capital markets," conclude the DB analysts.

India remains an attractive investment opportunity for private equity funds despite a weakened economic outlook for the country and inflation at a 13-year high. Caroline Williams, a private equity partner at law firm Walkers in the Cayman Islands, says India is seeing increased interest from offshore money that is to be put to work in the national infrastructure programme over the next five to seven years. India is beating China in attracting private equity funds says Walkers. Private equity investment has risen consistently from $2.03 billion in 2005 to $17.14 billion in 2007. And the deals are getting bigger. In 2007, 48 deals of more than $100 million were closed compared with 11 in 2006, according to the firm. A further estimated $500 billion is needed in the next five years to meet infrastructure development plans for India.

David Puth, the former head of FX and commodities at JPMorgan, has resurfaced after nearly two years out of the market. He has been appointed to the new position of head of investment research, securities finance and trading activities for State Street. He will report to Jay Hooley, president and chief operating officer of the Boston-based bank and will sit on the company’s operating group. Puth spent many years at what was originally Chemical Bank, going through several mergers and takeovers to end up at JPMorgan. After he left the bank in November 2006, he founded risk management and advisory group Eriska; he also joined Icap’s board as a non-executive director in November 2007.

CLS has hired Roger Rutherford as its head of product management. Rutherford, who reports to Rachael Hoey, director of business development, joins from Icap’s EBS unit where he held several roles, including leading the EMEA sales team; he was also a key member of the team that launched EBS’s prime brokerage offering and more recently was spearheading the introduction of NDF trading on to the EBS platform. Many years ago, he was a voice broker at Marshalls.

"It is not reasonable that any director can truly independently understand and monitor the full range of risks and complexities in today's highly sophisticated hedge fund" -Don Seymour, DMS Management

Third rights issue in a row for UK bank is shunned.

Citi

"Our long-term view remains – we will eventually see 1.60 for cable and parity for EUR/GBP" -Paul Day, Mig Investments

Some 190 IPOs seeking to raise $33.1 billion in capital have been postponed or withdrawn across the world so far this year, according to Dealogic.

India moved a step closer to liberalizing its foreign exchange market with the launch of rupee currency futures trading on the National Stock Exchange on August 29. Initial activity was brisk, with about 70,000 contracts changing hands in the first session. The NSE contracts are extremely small by international standards – they have a notional value of just $1,000 – and would appear to be very much aimed at attracting retail participation. Perhaps not surprisingly, early trading was dominated by banks and large corporations.

The Chicago Mercantile Exchange has pushed through a contentious $7.7 billion acquisition of the New York Mercantile Exchange following months of negotiations. The CME was already the largest derivatives exchange in the world but the combined group, with pro forma 2007 annual revenue of $2.7 billion and average trading volume of approximately 14.2 million contracts a day in the first two quarters of 2008, will now control some 98% of trading in US futures and exchange-traded options. "As a united company we are well positioned for a new phase of growth, innovation and product development that will benefit our customers, shareholders and market users around the world," commented CME Group executive chairman Terry Duffy.

Of benefit to both the environment and HSBC’s bottom line is the opening of a new internal network of conference rooms by the UK bank, which CIO Ken Harvey says will give "the experience and benefit of actually being in the room with colleagues on the other side of the world, without having to pack a suitcase".

"More business is done here in the sauna after a good round of golf than is ever done in meeting rooms," says a senior manager at a top investment bank in Seoul, perhaps a touch wistfully, when Euromoney’s correspondent asks for advice on networking on a recent visit to Korea.

Iran’s banks have had their access to international liquidity curtailed by sanctions imposed by the US. This photo, of a Bank Melli cashpoint, suggests its management may have gone a little too far in protecting their deposit base. Either that, or perhaps the marketing department got the wrong end of the stick in a drive to attract high net-worth individuals?

Chief executives need to lead from the front to achieve cross-company support for supply chain management projects and they need to identify the right partners to help them adopt successful strategies.

"Why did I tell you that? Please, please forget that I mentioned it," a chief wailed.

It could be the perfect storm – financial, macroeconomic and geopolitical risk are all on the rise. Risk is both where you anticipate it, and where you least expect it.

Jean-Claude Trichet, European Central Bank.

Does Syria’s long-awaited equity market finally mean business? Alex Warren reports.

Has the credit crunch led even the brightest students to lose all interest in the financial services industry?

HSBC’s attempted takeover of Korea Exchange Bank has been in limbo for more than a year, pending regulatory approval that in turn depends on the outcome of a court case involving individuals charged with improper conduct in the Korean bank’s original sale to private equity firm Lone Star. With the initial deadline already passed, the Financial Services Commission has said it is still reviewing the case, and Korean banks have said that they too would be interested in KEB. Richard Wacker, the bank’s chief executive, is a 20-year veteran of General Electric brought in by Lone Star in February 2004 to turn the then-troubled bank around. Euromoney spoke to him in Seoul about the frustrations of the delayed deal, his plans for KEB’s future and what having HSBC as a majority shareholder could mean for his bank.

Mexico’s central bank governor has achieved rock-star status with his tough line on inflation by standing up to the president’s pressure to reduce interest rates.

VTB, Russia’s second-largest banking group, continues to add to the array of western talent in its investment banking business. Its latest hire is Herbert Moos, who has been named as chief executive of VTB Bank Europe in London. Moos joins from Lehman Brothers, where he spent 14 years, most recently as chief financial officer for Asia-Pacific ex-Japan. Moos will be responsible for developing the investment business of VTB in London, Asia and the Middle East. He will report to Yuri Soloviev, head of investment banking.

The spectacular growth of Middle Eastern markets is attracting new ventures of all sizes. But smaller, more specialized firms are increasingly popular. Jethro Wookey reports.