Sales of non-performing loan and real estate portfolios to foreign investors have stirred controversy in Germany, with the buyers being described by a senior politician as “a plague of locusts”. But the medium-term benefits could go beyond a much-needed injection of liquidity and balance sheet repair and provide a fresh impetus to the German economy.

Another round of changes to financial legislation could reshape the German covered bond market. But it isn’t the new Pfandbrief Act that has got banks most excited. Laurence Neville reports.

Why CFOs should stop mistrusting hedge funds

The Philippines’ state pension schemes are in a parlous financial condition and in desperate need of reform, but the government has no money. A private sector solution is available and there is time to fix the problems, but only if politicians leave well alone. Chris Leahy reports.

Saudi and Qatari banks launch new investment products. National Commercial Bank has become only the second Saudi Arabian financial services provider to launch a Shariah-compliant mutual fund that will invest in the countries in the Gulf Cooperation Council.

BNP Paribas has filled its global head of securitization post. Former Morgan Stanley securitization syndicate and trading head Tim Drayson joined last month. Drayson left Stanley after 10 years in March and joins at a time when BNPP has advertised its intention to grow its securitization business.

Fresh from big spending on China’s state lenders, global banks are lining up to buy into its securities industry.

“I have 18 proposals from different banks all offering the same type of deal. When you pile them one on top of the other they stand over a metre high. I am suffering from lead harassment”

During the IMF/World Bank meetings in Washington at the end of September, some of the leading names in global finance gathered at the Hay Adams Hotel to witness the presentation of Euromoney’s minister of finance and central bank governor of the year awards.

Why CFOs should stop mistrusting hedge funds

Taiwan recognized the failings in its existing pension systems early. A new scheme was launched in July. It is already accumulating funds rapidly and the effects on Taiwan’s domestic capital markets are likely to be dramatic. There will also be numerous opportunities for global asset managers. Chris Leahy reports.

Refco, the troubled commodities and futures brokerage that went into financial meltdown after allegations of executive fraud surfaced in October, is likely to sell its futures business to private-equity firm JC Flowers. The company is also expected to put its capital markets business into bankruptcy. [see market leaders section, this issue -- Refco deals out a harsh lesson -- for comment]

Two unconnected events in the Byzantine world of Japanese banking indicate some progress, albeit slow, in the reform of this troubled sector.

Wealth management arm put on course to “grow by multiples”. The appointment of Thomas Kalaris as chief executive of Barclays Wealth Management signals the start of a rapid build-up.

Agency’s rating action places extra focus on bank’s securitization of first-loss positions.

Delphi’s bankruptcy shows that many of the imbalances remain in global structured credit.

The sovereign should deepen its domestic market, not issue local-currency debt abroad

Dismissing the official charged with setting up a debt agency sends the wrong signals at home and abroad.

Investors want growth and are impatient to get it. Bank CEOs are feeling the pressure, so expect more M&A activity.

Sovereign has shown it retains access to the capital markets despite political and economic woes.

Cash corporate credit might be in short supply but borrowers still need to tread carefully.

US investors could put more than $470 billion to work in US treasuries if Asia’s appetite for dollars continues to fall. Analysts identifify a huge potential for domestic reallocation.

The bankruptcy highlights the CDO market’s continued inability to price in potential credit events.

Montgomery & Co is known for its M&A advisory services. Now, it's pushing into equity research, institutional sales and trading. It will offer specialist research in key areas for growth companies: medical devices, biotechnology, speciality pharmaceuticals, wireless technology, digital media technology and semiconductors.

Experiments show that individuals with a specific type of brain damage, which prevents them from feeling fear, outperform normal players when it comes to making some investment decisions. Crack and methamphetamine addicts as well as alcoholics similarly outperform.

A pan-European growth market could significantly boost EU GDP, but there are obstacles to putting it in place.

New US bankruptcy laws that came into effect in October will alter the way companies go through restructuring and might make it harder to enter Chapter 11 bankruptcy protection. In addition the ability of companies to manage their own reorganization will be affected – giving creditors more say after a few months.

Airline is courting controversy with creditors after abandoning leased aircraft.

One of southeast Asia’s top finance officials says that the region must continue to harmonize if it is to stave off the threat of growing competition from China and other north Asian economies.

New loan programme re-establishes relations.

Leading presidential candidate promises orthodox finances.

Investors are offered first subordinated bond issue by a Middle Eastern financial institution, lead managed by Deutsche Bank and UBS.

Erste Bank launches The New Europe Blue Chip Index, covering the largest C&E European stocks traded on the Vienna stock exchange.

CDP’s latest issue shows the benefits of looking beyond the usual suspects to banks that offer strong secondary market support and enhanced distribution.

The competitive spirit in investment bankers at CSFB and Morgan Stanley is alive and well. But instead of the usual battle to win business from clients or trading head to head, they clashed on a non-financial field.

It’s good to see that the world’s leading finance ministers slum it on the same flights as us mere mortals to the IMF/World Bank meetings. For who should be on the Virgin flight from London Heathrow to Washington, DC, than UK chancellor Gordon Brown?

San Francisco likes to think of itself as the most liberal US city. Every May, for example, the famous Bay to Breakers race takes place.

China’s inefficient economy is under threat because its capital costs are set to rise, but it is as likely to falter because US consumerism hits the wall. And there are signs that American profligacy cannot be sustained much longer

Hybrid corporate bonds might be the new hot product of the Eurobond market but originators’ hopes for a deluge of new issues have not been fulfilled.

In the first of a series of articles, Euromoney examines the status of pension reform in two countries at the extremes of Asia’s pensions revolution, Taiwan and the Philippines. We ask the authorities charged with pension reform in these economies about plans and progress, challenges and expectations.

Zhou Xiao Chuan, governor of the People's Bank of China, tells Sudip Roy why the renminbi was revalued and what financial reforms are next on the agenda.

Hedge funds are overflowing with money, and margins on traditional strategies are shrinking. One solution to their search for returns is to offer their services to companies in need of financing. Some are nervous about taking up the opportunities but others are discovering just how useful these new financiers can be.

Spot FX prices are so tight that it is almost impossible to make a profit from market making. Some providers are going to struggle to remain profitable, which might not be a bad thing.

Recent popular new issues rapidly faced heavy trading and price falls. With the tendency of speculative money to disappear as quickly as it arrives, it remains to be seen whether it will continue to plague IPOs later in the year.

But the former Bundesbank head defends the creation of the euro.

Regulatory pressure has forced a crackdown on transaction delays.

But can their value surpass the underlying market?

But withdrawal of investors with unrealistic expectations seen as advantageous.

In another sign of the rapid modernization of China’s capital markets, the Asian Development Bank and the International Finance Corporation, the private sector arm of the World Bank, became the first foreign institutions to issue renminbi-denominated bonds, known as panda issues.

Korea’s love-hate relationship with foreign capital continues. In October, the government announced that it would be seeking tax payments totalling $210 million from five foreign private-equity investment firms that relate to profits earned from investments in Korean businesses.

After a few tough years, the country is on investors’ radar screens again.

Hurricanes don’t just destroy cities: they can also destroy sovereign finances. Hurricane Ivan, for instance, wiped out so much of Grenada’s infrastructure in September 2004 that by the end of the year the country was in default on its debt. Things were not helped when Hurricane Emily struck Grenada in July.

Increasing numbers of pension funds in Europe are making the choice not to use hedge funds in the region since returns have dropped off.

Technology companies have to swallow harsh market truths – and some pride – and give up independence.

Just days after Refco announced what it termed “significant volume increases on its professional and institutional FX trading platform, FX ProTrader”, activity on the platform ground to a complete halt.

Three monoline insurers were used to credit wrap Scotia Gas Networks’ £2.22 billion ($3.9 billion) bond sale via sole arranger Barclays Capital, and lead managers Citibank, RBS and DrKW in October. This deal refinanced acquisition loans extended for the purchase of the Scotland Gas Networks and Southern Gas Networks from National Grid Transco in June (five out of nine networks were also sold). Although investors are hungry for stable investment-grade credit (BBB in this case), the lack of financial history – a requirement for an exchange listing – meant that arranger Barclays was required to bring in the monolines – Ambac, FSA and XL Capital. The structure was sliced into 11 tranches and sold to a wide variety of investors (euro and sterling, fixed, floating and index linked). SGN is owned by Scottish and Southern Energy (50%), Ontario Teachers (25%) and Borealis Infrastructure (25%).

Harvard University’s endowment fund has appointed as its head emerging-market legend and one-time candidate as IMF head Mohamed El-Erian. Formerly, El-Erian was running $30 billion in funds at bond investment manager Pimco. He takes over from Jack Meyer who, following complaints about his large compensation package decided to leave with some of his team to run a hedge fund. Meyer is likely to make a success of the new venture given that he has built up Harvard’s fund from $4.7 billion in 1990 to its present $25.9 billion.

Many investors fear October because it is associated with a number of market crashes. But according to research from ADVFN, a pan-European equity markets website, it is actually quite a good month for equities.

As the world awakes to the possibility of a bird-flu pandemic, analysts at CLSA have assessed the economic implications for Asia of an outbreak. CLSA has compiled an index of relative economic risk based on healthcare expenditures per capita, tourist arrivals per capita and total trade as a proportion of GDP. The results might surprise most readers. Based on these three measures, Hong Kong and Singapore emerge as the economies most at risk, followed by China, Malaysia and Thailand. Despite high spending on healthcare, both Hong Kong and Singapore remain highly exposed to the economic fallout from a pandemic by dint of their high dependence on international trade. Each country also has tourist arrivals roughly twice its population.

Turkey looks set to be the next great EU convergence play. Now foreign banks want a piece of the aciton. But the owners of the country's financial institutions are seeking to form strategic partnerships rather than relinquish ultimate control. Kathryn Wells reports.