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December 2003

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LATEST ARTICLES

  • After losing its way in the 1990s Gartmore seems to have turned the corner by emphasizing alternative investments, especially hedge funds and unusual techniques such as managers running long-only and hedge funds simultaneously. Julie Dalla-Costa reports.
  • Activity might be picking up in M&A departments but that hasn't stemmed the flow of experienced bankers willing to make the leap into corporate in-house teams. Partly it's a case of unemployed corporate financiers taking any job on offer. Recruiters say that the candidate pool in M&A is still much bigger than the number of jobs available, and there are now more positions going at corporates. "The money's nothing like what you get in the good times at a bank, but we have got corporate assignments on our books at the moment, but not banking ones, which speaks for itself," says David Timson, senior partner of recruitment firm The Curzon Partnership.
  • In the name of transparency, liquidity and, paradoxically, fair pricing for investors, the current draft of the EU's revised Investment Services Directive threatens to undermine investment banks' internalized securities trading. Ian Mackenzie reports.
  • The culture of corporate bonding has taken hold in the UK. Off-sites, golf tournaments, tank-driving weekends, group hugs - they're all about learning to love your co-workers, and in doing so make your office a more harmonious, and profitable, place.
  • By Mike Monnelly & Camilla Palladino
  • Deutsche Bank is set to offer tailor-made corporate governance research on FTSE 350 companies before the end of the first quarter of 2004. Aimed at fund managers, it offers systematic analysis of corporate governance issues at top companies, providing further context for the financial numbers.
  • Foreign investors with their eyes fixed on Russia's continued powerful economic growth are shrugging off the recent arrest of Mikhail Khodorkovsky. The CEO of oil giant Yukos and Russia's richest man, he was pulled in on October 25 by Kalashnikov-toting officers of the FSB (federal securities services). This might have briefly unsettled the stock market, but foreign companies selling soap and coffee to increasingly affluent Russian consumers believe their businesses will be unaffected.
  • Permal, part of French group Worms & Cie, announced last month that it had launched its first Islamic hedge fund.
  • New financial legislation and infrastructure in Dubai and Saudi Arabia give them the opportunity to challenge Bahrain's position as the Middle East's prime financial centre. Nigel Dudley reports.
  • Chairman and founder, Garner International
  • Since the Madrid meeting of the Basle Committee on Banking Supervision in October, a new realization has dawned on the senior managements of banks around Europe and the rest of the world. The Basle II accord will go ahead - having looked in doubt at various times this year - and the time is fast approaching when banks must move beyond arguments over complexity, pro-cyclicality and inappropriate incentives. They must start implementation.
  • Most bankers would have said the stakes were high enough at the Rugby World Cup final between bitter rivals Australia and England in Sydney. But that was not the case with Aussie investment bank Macquarie. It upped the ante by publishing research confidently predicting a home victory, entitled "Rugby World Cup - quant style - Why the Wallabies will win".
  • Issuer: Commerzbank
  • Headlines exposing torrid tales of corporate miscreants and tough talk by governments and regulators about imposing new standards have kept the issue of corporate governance bubbling over in recent times. Investors suspect companies are paying no more than lip service. However, a few Asian companies have been quietly setting their own standards - and reaping significant gains. Chris Leahy reports.
  • Led by imaginative sovereign issues, Latin American bond markets made a remarkable recovery this year. Corporates are now joining the bandwagon as sovereign yields come down. Felix Salmon reports.
  • As the demand for Latin bonds strengthened over 2003, so did the supply, at least in terms of the number of investment banks competing for mandates. After years of a shrinking market as a result of banks pulling out or merging, the number of players is increasing again, as a consequence of European commercial banks deciding that debt capital markets activity is a good complement to lending operations.
  • Greek GDP growth has outpaced that of EU peers since 1996 but underlying fiscal imbalances exacerbated by faltering privatization and the inevitable passing of the Olympics effect look set to slow it down. Dimitris Kontogiannis reports.
  • Long-term themes, such as the US current account deficit and output gap, have caught the forex market's attention and will be crucial to the dollar exchange rate. Lara Rhame reports
  • The biggest debt deal of the year from eastern Europe wasn't the Yukos loan, or the Poland dollar deal, or even the Gazprom blowout. For once, the banks involved don't want to tell you how well it went, and it probably doesn't appear on any league table. That's because it's an arms financing deal, one of the biggest private financings of this type for several years.
  • With Greece scheduled to hold general elections next spring, the conservative New Democracy party currently has a solid lead in the polls. The party's shadow finance minister, George Alogoskoufis (pictured), says Greece should change its economic policy mix to place greater emphasis on fiscal consolidation and the liberalization of certain markets to boost competitiveness and growth prospects. "The real picture of the Greek economy is not reflected in the GDP growth numbers. Special factors such as the preparations for the 2004 Olympic Games and the speeding up of older projects have boosted GDP," Alogoskoufis tells Euromoney. "The budget deficit is widening, the public debt exceeds 100% of GDP, inflation is among the highest in the EU, and the economy's international competitiveness is low, as evidenced by the large current account deficit and the rankings of international organizations. The public sector is still characterized by bureaucracy and corruption."
  • Following the passage of a new law allowing for securitization in the Greek financial sector last summer, the first transaction originated by a non-state entity is about to hit the market, paving the way for what some bankers say could develop into a promising market.
  • After two tough years, most big Wall Street and City of London firms are expected to post higher profits this year. It is early days but average end-of-year bonuses are predicted to rise by about 20% at the larger firms.
  • When it comes to debt, the British are the kings of binge. British debtors now owe the equivalent of UK GDP and their debts are much more sensitive to interest rate rises than US consumers'. Two-thirds of US borrowing is at fixed rates; almost 90% of secured UK household debt - mostly mortgages - is at variable rates. And UK rates have begun to rise.
  • Issuer: Junto de Comunidades de Castilla-La Mancha
  • In a bid to moderate dollar inflows, the Indian government took steps early last month to discourage Indian companies and financial institutions from borrowing in foreign currency. The new rules stipulate a lower all-in cost for commercial bank loans and restrict the purpose for which loans of over $50 million can be raised.
  • "We've got three dollars to the pound," used to be one of the songs favoured by England's Barmy Army cricket fans on their tours to Australia. The slur on Australia's sliding currency, sometimes dubbed the Aussie peso, was one of the few ways they could get back at their hosts, who regularly thrashed them on the field.
  • The US economy is growing at over 8% a year. Jobs are returning, industrial production is improving and households are still spending. Everybody expects this business cycle to be like those before and they've lapped up stocks in the US and Europe, in anticipation.
  • Has Silicon Valley finally got its groove back? Venture capital investment in start-up companies rose to $35 million in the third quarter, up 36% on the previous three months. M&A activity is also rising. And talk of a $20 billion initial public offering by Google is generating the kind of buzz last experienced in 1999.
  • From banking to bongos. Until 2001, Jay MacDonald was a nickel trader, most recently for Standard Bank in London. But 18 months ago he ditched his day job and six-figure salary to become a professional bongo drum player.
  • Will Germany finally start to generate true-sale securitizations next year, with all that means for the German economy?