Indonesia’s young finance minister has made some key decisions since her appointment, winning many friends abroad. Some tough challenges lie ahead; to meet them, Mulyani will need to win more friends at home. Chris Leahy reports.

Riad Salamé faces yet another test of his skills following the outbreak of war between Israel and Hizbullah. He has dealt with previous challenges with flying colours. There’s little to suggest it will be different this time. Sudip Roy reports.

Delegates are warmly welcomed while protesters' placards are policed.

It offers double-digit yields, is not correlated with the equity market and provides secure, long-term returns. Allocations of investment capital to real estate have therefore ballooned – and look set to keep on growing. Louise Bowman reports.

When Fitch put Iceland on a negative rating outlook in February the country was facing a heavy current account deficit as well as an asset price and credit bubble. But the banks and politicians think that it was all a misunderstanding. Laurence Neville reports.

Big banks are beginning to look beyond the kudos that socially responsible investment brings and are introducing microfinance to the capital markets as a viable, profitable business. Zach Fuchs reports.

If things go according to plan, next January there could be a fundamental change to the rules under which more than 50% of Europe’s invested real estate is financed. Louise Bowman reports.

Bank TuranAlem is growing fast and has set its sights on toppling the largest bank in the country, Kazkommertsbank. The next stage in its growth strategy could involve an IPO to attract international investors.

The hedge fund industry has exploded; conservative estimates suggest there are almost 500 funds based in the region. Most have ridden the wave of Asia’s rising markets. Now those returns are getting harder to come by. But, as Helen Avery reports, increased opportunities to take short positions offer managers hope of generating new, enhanced returns.

The unbundling of execution and research costs will dramatically accelerate the global consolidation of equity broking firms. But it also raises questions about the quality and efficiency of the buy side.

Companies with optimized financial supply chains have 30% to 35% better market capitalization than companies that haven’t. However, forging the links between treasury and operational departments is hard, particularly as supply chains enlarge and globalize.

Iceland’s financial supervisory authority, the FME, has kept a close eye on the health of Iceland’s big three banks, says Jonas Fridrik Jónsson, director general.

The recent dramatic widening of euro swap spreads means that euro-denominated debt is becoming cheaper for agencies and supranationals. Could this signal the start of a fundamental shift away from dollar bonds for these issuers? Lawrence White reports.

With a successful Eurobond behind it, the republic is beginning to fulfil its promise as a strategic part of the Balkans. Oonagh Leighton reports.

“The events of February and March can be blamed in part on the relative lack of knowledge about the Icelandic economy and its peculiarities, which was reflected in some reports,” says prime minister Geir Haarde.

After EU accession in 2004, the next target for central Europe’s governments is the euro. In the scramble to comply with the Maastricht criteria, have they started to borrow techniques, invented by their western European counterparts, for massaging the numbers? Kathryn Wells reports, with research by Pauline Thomas.

Foreign investors have made fortunes investing in Russia. But now they are looking to go deeper, and are packing their bags to discover Russia’s regions. Julian Evans reports from three of Russia’s developing regions.

Increasingly sophisticated Russian retail investors are seeking new products to beat interest rate returns. Patrick Gill reports.

Foreign banks are pushing the sector forward even as the rewards come in. The capital market is also showing signs of life but would benefit from more determined decision-making. Florian Neuhof reports.

Güler Sabanci, who chairs Turkey’s Sabanci Group, talks to Peter Koh about foreign partnerships, international expansion, the group’s strategic direction and the difficulties of running a family business.

Iran’s authorities are looking to invigorate the country’s private sector with plans to sell up to $110 billion-worth of state assets over the next 10 years. Can the programme attract the foreign investors it needs to succeed? And can Iran’s government learn from past mistakes? Euromoney reports.

A few big foreign banks have recently suspended their activities, but they are far outweighed by institutions that intend to maintain a connection. And Iran’s prominence as an oil producer means that it sustains substantial economic relations with foreign export credit agencies and governments. Philip Moore reports.

CDS trading volumes in Latin America are growing fast as credit derivatives become an increasingly important investment tool. Leticia Lozano reports on the impact on the region’s capital markets.

Japanese outbound M&A is reaching levels not seen since the 1980s as corporates seek to consolidate their newly strengthened positions. Chris Wright reports.

The Republic of Indonesia’s successful $2 billion issue this March has given an impetus to the revival of the country’s corporate bond issuance. Nick Parsons reports.

Oji Paper’s bid for rival Hokuetsu breaches a Japanese taboo on hostile takeovers. It has also prompted some extraordinary, perhaps illogical, defence tactics. Is this the shape of things to come in Japanese M&A? Chris Wright reports.

In an investment banking world dominated by US bulge-bracket operations, UBS has muscled its way into the global league. Success has come despite its singular provenance, say critics, and, argues CEO Peter Wuffli, because of it. The Swiss bank’s head explains this reasoning to Chris Leahy and discusses developments on banking’s latest battlefront.

Ebrahim Sheibany is governor of Iran’s central bank, a position he has held for three years. He tells Eric Ellis in Tehran that as far as economic policy is concerned, little has changed, despite the election of Mahmoud Ahmadinejad as president.

French bank BNP Paribas is being sued in the US federal courts by a hedge fund over the financing of contracts for oil from Congo-Brazzaville. Rather than settling out of court, BNP says it will fight the lawsuit all the way. Felix Salmon reports on a grey area of black gold.

Its capital markets are a hive of activity – with record levels of IPO activity, decreasing funding costs and a first hostile takeover attempt. But many of the most active companies say that the queen bee of government is too strict: tax and infrastructure problems are preventing the country from reaching full potential. Lawrence White went to São Paulo and Rio de Janeiro to investigate.

Richard Lark, CFO of low-cost airline Gol Linhas Aéreas Inteligentes, exemplifies the increasing sophistication that ex-bankers are bringing to Brazilian corporate finance. He is a qualified pilot, was formerly a vice-president at Morgan Stanley and is a borrower whose company’s stock value has doubled since its IPO. Lawrence White spoke to him in São Paulo.

Compass Asset Management’s chief investment officer expects his funds under management to grow from $20 million to $100 million in the next 12 months. Is Kazakhstan the next great emerging Europe play?

Nigeria’s economic reforms have been impressive. But after the resignation of a key figure in the country’s turnaround, can they be made to stick? Rupert Wright reports from Abuja and Lagos.

As an investor dedicated to the region, East Capital Asset Management is in the vanguard of a growing breed. Oonagh Leighton reports.

The recent explosive growth in European CMBS is the fruit of years of investment in the product by many banks. But do these institutions now find their hands tied by the need to feed the machine that they have created? Louise Bowman reports.

Despite Gulf coffers brimming with oil cash and aggressive expansion by some of the region’s banks, inherent barriers to regional consolidation are set to limit fundamental change in the Middle East and North Africa’s financial sector landscape over the next five years. Alex Warren reports.

Árni Mathiesen, Iceland’s finance minister, speaks to Laurence Neville about this year’s economic troubles and the economy’s prospects.

In less than two years the Philippines has transformed its sovereign debt programme from laggard to leader in emerging markets. The work of the republic’s treasurer, Omar Cruz, lies behind much of the change. Euromoney talks to the Philippines’ market man about the changes and the challenges ahead.

The country’s newly revitalized banking system throws up colourful characters and eccentric approaches to marketing. But overseeing it all is a rigorous central banker with solid US commercial banking experience. Eric Ellis reports.

Israel’s conflict with Hizbullah began just as Lebanon was finding its feet again following the assassination last year of former prime minister Rafik Hariri. The government was in the middle of a series of reforms that it hoped would provide the capital markets with a bigger role in the country’s economic story. Those reforms are now on hold but it is imperative that they are implemented as soon as circumstances allow. Sudip Roy reports from Beirut.

Only incorporated in 2005, Almaty-based Max Petroleum shows that smaller, independent energy companies can still make their mark against the more powerful Russian and global firms.

Saudi investor interest in the IPO of the main company behind the King Abdullah Economic City was overwhelming. It is now hoped that the project will attract equivalent interest from foreign companies intent on participating in the special economic zone. Nigel Dudley reports.

Despite a cyclical downturn – which has itself prompted the country’s banks to sharpen up their operations – the sector is in unprecedented good shape. But the banks need to be encouraged to lend more, and this is in part dependent on the consolidation a newly powerful central bank is keen to promote. Nick Parsons reports from Jakarta.

Kazakh investment banking boutique Visor Capital believes it can offer clients a bridge between local and international markets. It is looking to open up new avenues for corporates and international investors alike. Can it compete with the more established competition?

For many years the accepted wisdom in global banking has been that bigger is better. The full-service banks dismiss smaller competitors, saying that to succeed in modern finance you need to offer all things to all clients. And yet a number of European banks continue to demonstrate success in their chosen specialist fields. Peter Koh profiles the financial institutions that prove you don’t have to be everywhere and everything in the world to be a world-class operation.

The London-based asset management firm has taken the lead in persuading institutional investors worldwide, including central banks and pension funds, to go for long-term investment in emerging market assets. Felix Salmon reports.

The latest country risk poll reflects a global economy in good health, despite a period of stock market volatility and the prospect of a slowdown. But the Middle East and the high price of oil could have far-reaching implications, writes Florian Neuhof. Research by Paul Pedzinski.

Lebanon’s finance minister, Jihad Azour, told Sudip Roy in early August how his country is coping with conflict.

Hungary’s OTP Bank dominates its domestic market, but can it compete with regional powerhouses such as Raiffeisen International and UniCredit, or is it in danger of being swallowed up itself? Kathryn Wells meets OTP’s long-serving chief executive, Sandor Csanyi, to find out.

The world’s biggest EM portfolio fund manager is scaling back its tactical allocation to the asset class.

Once a dealer, always a dealer

Arrangers have confirmed that CMBS will form part of the permanent financing for Grupo Inmocaral’s €3.7 billion bid for Inmobiliara Colonial. The target has assets in Spain and France, owning a majority stake in French SIIC Société Foncière Lyonnaise.

An oft-cited grievance of many a sell-side equity research analyst is that boring numerical analysis of mundane data and events, known as maintenance research in the trade, stifles creativity.

Christopher Egerton-Warburton is the new head of origination in the sovereign, supranational and agency (SSA) business at Goldman Sachs. “Edge” has been at Goldman Sachs for 13 years and has been associated with landmark trades such as the UK and German dollar deals. Of late he has focused on more strategic issues such as the creation of the International Finance Facility for Immunization (IFFIm).

“The phoenix will rise again”

Newcomers to the IMF/World Bank meetings could find the event overwhelming. Should they attend the seminars? And if so, which ones? Where’s the best place to hear the gossip? And which parties should they attend? Confused? Don’t worry because help is at hand from an IMF veteran, as dictated to Sudip Roy.

Asia’s hedge funds need more blue-chip assistance.

Rato can take the lead in combating the “financial balance of terror”.

Anyone that has been in the presence of an investment banker in the past few years will have seen the all too obvious signs of CrackBerry abuse.

“When we were marketing our Asia hedge fund five years ago, one head of a large US fund of hedge funds observed: ‘Shanghai, eh? I bet you get great sushi there’”

“By the end of the year we’ll have seen a lot of money being shifted around between hedge funds. Investors are getting anxious about returns and will certainly be rethinking their allocations and redistributing assets.”

It’s not just Sarbanes-Oxley; changing global capital flows also threaten the US’s pre-eminent status as a financial centre.

A new product, and a new law, could herald the beginning of institutional investment in global markets.

Are things finally starting to move forward in the much-heralded property derivatives market?

Since the passing of the UK’s Enterprise Act in April 2004, UK bankruptcies have doubled and individual voluntary arrangements (IVAs) – whereby borrowers can enter into a formal arrangement with their creditors – have risen fivefold. This is now becoming uncomfortably clear in the credit card ABS sector where charge-off levels were up from 4.72% in June 2005 to 7.04% in June 2006 according to S&Ps European Credit Card indices. Excess spread in these deals is trending commensurately downwards, from 7.13% to 6.31% over the same period.

By John Ferry

Depending on whom you believe, July was either a return to the black for hedge funds or a continuation in the red. In July, the Greenwich Van Global Hedge Fund Index lost 0.20%; the RBC Hedge 250 index returned –0.11%; and the HFRI Fund weighted composite index returned –0.24%. Credit Suisse/Tremont’s overall index returned 0.29%.

Allocating a far greater proportion of their assets to foreign exchange is one way pension fund managers can help solve the widely predicted global pension crisis, according to Bilal Hafeez, managing director, global head of FX strategy at Deutsche Bank.

The SEC’s decision that it would not appeal against the judgement of the US Court of Appeals to strike down the regulator’s Rule amendments, which required hedge fund registration, has received a big thumbs-up from hedge fund managers, lawyers and consultants. The Alternative Investment Management Association, in particular, minced no words when giving its opinion about the overturned regulation. AIMA executive director Florence Lombard said: “We are pleased to see that the SEC has decided to take a fresh look at its proposal for hedge fund regulation. AIMA urges the SEC to ensure specifically that it permanently remove the requirement for non-US hedge fund managers also to register in the USA if they are already fully regulated in efficient jurisdictions, such as the UK and France. The requirement for dual registration, imposed by no other regulator worldwide, was unnecessary, expensive, led to complex issues for managers having to comply with very different sets of rules and created an un-level playing field.”

The abrupt departure of John Eley from Hotspot FX has set tongues wagging across the foreign exchange markets. News that Eley had relinquished his post as president and chief executive was announced in a bland release issued by Hotspot’s new parent, Knight Capital, on 10 August. A week later, Eley was still listed on Hotspot’s website as being in his previous position, suggesting his departure was not one that was part of a considered strategic thinking process.

Highly unusual and interesting vehicle, but its precise status remains ambiguous.

With the US apparently nearing the end of its rate cycle, attention has started to focus again on the possibility of global central banks selling dollars and diversifying their reserves. But has the story has been overstated?

Some unusual price action just before the Bank of England announced an increase in its key repo rate in August has got the conspiracy theorists muttering.

Investors can’t get enough of real estate. But property developers should get ready for the wall of money to shift to emerging markets.

With sentiment and finances in good shape, it’s time for emerging market sovereigns to rethink their debt profiles.

A series of rate increases by major central banks means that the equity markets can no longer rely on the excess liquidity in financial markets for support.

Official reassures foreign investors following Pakistan Steel Mills fiasco.

Emerging market CFOs need to grasp the benefits of a proper hedging strategy.

Will US issuers and investment banks finally learn to love covered bonds?

The governing council appears to be split between raising rates incrementally, at 25bp a time, and the short sharp shock of a 50bp hike.

Reports of the death of currencies as an asset class are surely exaggerated. Look for mean-reverting volatility to turn around the performance of currency funds.

Inflation is set to feed into the US economy, with destructive effects. But the beginning of the process won’t be the consumer slowdown that so many expect.

The second exchange of Soviet-era FTO (foreign trade organization) debt into Eurobonds is being formally launched this month, following a first debt swap in December 2002. The first exchange involved $184 million of 2010 paper and $1.2 billion of 2030 paper issued on London Club terms, with about 35% of debt written off. The new one will be carried out on the same terms, and the finance ministry estimates that up to $600 million of claims are eligible.

Brazilian mining group Companhia Vale do Rio Doce is poised to become the latest emerging market company to buy a rival in the developed world after becoming the favourite to acquire Canadian nickel producer Inco. The deal could make CVRD the world’s biggest nickel producer.

The small teams of professionals who work for the three clearing houses (foreign exchange, securities, derivatives) at Brazil’s Bolsa de Mercadorias & Futuros (BM&F) have a claustrophobia-inducing office, locked as they are inside a glass cube that sits in the centre of a larger room inside the exchange’s headquarters. Despite working in this intimidating setting, the clearing houses’ directors are welcoming and their efforts are for now focused on increasing foreigners’ access to and participation in Brazil’s growing derivatives market.

Venezuela’s president has threatened to nationalize telecom company CanTV in a row over workers’ pensions.

Are bad habits returning to corporate Korea?

The long overdue bank consolidation in the Philippines highlighted in June’s Euromoney looks as if it is under way. Within days of the article’s publication, two of the key identified targets sealed a deal. Union Bank of the Philippines acquired International Exchange Bank (I-Bank) for $263 million equivalent. That price values I-Bank at about 2.2 times book value and gives Union Bank an additional 78 branches and $1.35 billion equivalent of assets. Now rumours are circulating that a much larger prize might be up for grabs. Rizal Commercial Banking Corporation (RCBC), the banking arm of the Yuchengco Group, is said to be in play with several mooted buyers.

The endless game of musical chairs at private banks in Asia claimed one of its most high profile scalps in August when Credit Suisse poached Marcel Kreis, southeast Asian head at arch-rival UBS, to run its entire Asian operation.

In the July issue of Euromoney we incorrectly stated that Mizuho Securities had “number one league table status in yen bonds ($31.4 billion from 191 deals)”. The figures quoted were for Mizuho Group rather than Mizuho Securities; they should have read “number two league table status with $18 billion from 105 deals”.