April 2007
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LATEST ARTICLES
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The financial supply chain is an important concept for CFOs and treasurers to understand. However, it is one that they might be unfamiliar with, and certainly it is unlikely to be at the top of their agenda.
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The inflation-linked bond market has grown dramatically in size and sophistication. What is driving its expansion, and just how far can the market develop?
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As the deal between US-based Lyondell Chemical and Saudi Arabia’s National Titanium Dioxide (Cristal) closes so Saudi Arabian merger and acquisition activity looks set to increase further, and to cover more types of business, in 2007.
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Recent equity market upheavals are presenting new challenges and opportunities for volatility and correlation traders. With the downturn in markets that kicked off at the end of February came a massive jump in short-dated implied volatility. The Chicago Board Option Exchange’s Vix index, which measures the implied volatility of S&P 500 index options and represents the market’s expectations of volatility over the next 30 days, jumped almost 80%, increasing from about 10% to 18%. Volatility in other major equity markets, such as the Eurostoxx, also jumped, as did equity market correlation. The 30-day realized correlation level on the Eurostoxx 50 doubled from just under 20% to 40%. Immediately before the downturn, volatility and correlation had been trading at historically low levels.
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Investors worry about lack of outside experience, lack of star quality and the temporary prefix.
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Revenues at Instinet’s Asian business grew by an impressive 50% last year, double the growth in regional trading volumes. The electronic broker has ambitious plans to expand throughout the region this year, opening an office in Singapore, becoming the first remote member of the Australian Stock Exchange, and establishing a partnership in India to offer electronic direct market access. However, it is in its new adopted home of Japan that the broker is making its boldest moves.
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The fourth CLO designed to free up risk capital for reinvestment in the PFI market has been launched. Roger James reports.
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Aston Martin announced the start of a new chapter in its financing history as the sports car manufacturer agreed its leveraged buyout to a consortium of investors led by sports car veteran David Richards.
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Anxiety rippled through the UK credit market when the UK’s top non-conformist mortgage lender, Kensington Group, said it was considering a sale to a US bank. Roger James explains why.
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House painter Miguel Hernández has dreamed for years of buying a house and a car for his wife and three children. However, as one of the millions of Mexicans without a bank account, he has always been denied credit. But his luck could change in June when US-owned superstore Wal-Mart de Mexico opens banking services, joining a growing roster of local retailers moving into banking for low-income earners. "I’ve shopped at Wal-Mart for years, they know me and I hope they’ll let me open an account. It would change everything," says Hernández.
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For most of this decade the majority of US investment banks have scorned covered bonds. Not any longer. So if it's true that they no longer believe it to be an unprofitable backwater of the European capital markets, what factors are at work? Philip Moore discovers.
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The influence of Basle II is starting to be felt in UK mortgage lenders’ funding plans.
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The launch of LCDX and release of Isda documentation in Europe could revolutionize risk transfer.
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Structured covered bond may be repeated by other German issuers.
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But move would boost liquidity when volumes are falling.
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A wobble in China, a rapid sell-off in global equities, a flight to the safe haven of government bonds and the unwinding of carry trades were all evidence of a change in investors’ risk appetite starting in February and going through into March. The moves showed many things, including the interdependence not only of various currencies but also different asset classes. For a brief period, the path of global equity markets seemed to be dictated by what was going on in an intraday basis in spot sterling/yen.
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There was a flurry of activity in the FX employment market in March as those market participants who got bonuses banked their cheques.
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According to Highland Capital, there are at least 13 new managers poised to bring their first CLO deals in Europe this year. Twenty-two new managers joined the market last year, doubling the size of the market in just 12 months. If the market keeps growing at this pace there will inevitably be some form of consolidation since competition for assets is already acute. Spanish savings bank Caja Madrid is currently marketing its first self-managed CLO, Neptuno. The US market continues to boom – 16 deals a month closed last year and so far in 2007 17 have been announced and 44 are ramping.
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Hysterical headlines and wild index swings have disguised what is really going on in the world of home equity loan securitization.
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SG CIB takes its cue from collateralized loan obligation securitization.
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Let Hoteloc be a warning on the risks in short tail period.
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In December 2006, Mizuho unveiled Alexander Rekeda, Doug Munson, Jim Shepard, Bill Budd and several others as part of its new structured credit and debt capital markets team in New York. The bankers had formerly worked at Calyon, covering various areas of structured finance and debt.
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Goldman Sachs has been fined what some might call a rather lenient amount, $2 million, for selling short an IPO pre-sale.
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Appointment shows growing importance of Asia for business and for career growth.
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With growth surging ahead and inflation high, some analysts have voiced their concerns that the Egyptian economy is getting ahead of itself.
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Success in investment banking has always depended on relationships and connections, as well as expertise.
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The foundation on which Ferrovial built its acquisition of BAA was its securitization exit. But nearly a year after the buyout, the refinancing is nowhere to be seen. Louise Bowman finds out what’s happening.
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Alan Patterson, head of the financial institutions group at Citi, is moving on from origination to a new role of capital management advisory. He will report to Valentin Ehmer, who runs the fixed income and derivatives product group.
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The regulatory framework of Europe’s single payments system is effectively in place. But the details of implementation by banks and corporates are still a matter of debate.
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The recent sell-off in global stock markets will not be a repeat of last May – a short correction leading to new highs. There is now more to worry about in the global economy and the liquidity cycle is at a turning point.