March 2011

Top stories

Punch drunk: Battered ABS bondholders face knockout blow

From Punch Taverns to a string of commercial real estate-backed deals, borrowers and bondholders in distressed European securitizations are squaring up for a bitter fight. The chaotic process by which these structures threaten to unravel will be a lasting legacy of the ABS binge. Louise Bowman reports.

Banking

Angola’s elite looks to clean up in Portugal

With Portugal struggling to pay its debts and the economy shrinking, the 
country needs help. Enter Angola – oil rich, with money to burn, and Portugal’s former prized colony. Angolan investment is growing fast – and nowhere more quickly than in the country’s troubled banks. Some Portuguese are up in arms about it. Sudip Roy reports.

Markets

Banks take big risks in government bonds

Erstwhile cornerstone investors have fled the worst-affected parts of the developed-world government bond markets as credit concerns infect the once risk-free rates world. Volatility has risen while liquidity between dealers is much diminished and periodically evaporates. Yet bank dealers still see money to be made in this exciting new world and are opening their balance sheets to issuers and investors. Some will no doubt live to regret it. Peter Lee reports.

Latin America

IPO: How Petrobras struck $70 billion

IPO: How Petrobras struck $70 billion

The equity transaction that Petrobras priced on September 23 last year set a world record. The deal was skilfully executed but many of the arguments that divided investor opinion on the transaction rumble on. Rob Dwyer tells the inside story.

Best Managed Companies in Latin America 2011: The price of success

International investor interest in Latin America has intensified scrutiny of the corporate governance and investor relations of companies in the region. Big companies such as Vale, Petrobras and bank BBVA have responded remarkably well to this scrutiny. Rob Dwyer reports.

Andean market mergers set growth agenda

The merger of the Peruvian and Colombian stock exchanges will transform the equity capital markets of the Andean region and help them to compete with Brazil for investment, say local experts. Jason Mitchell reports.

Real estate

CMBS: US banks remain on real estate knife edge

The expected big bust in US commercial real estate never happened, and investors are starting to move in. That’s good news for US banks that have portfolios under water. But are the loan owners and investors being overly confident? Helen Avery reports.

Inflation

Inflation products: The best bet in town?

Inflation is back, and so are inflation markets after a three-year hiatus brought on by the financial crisis. With some central banks happy to let their economies reflate to foster employment and a sustained recovery, inflation-linked debt might be the best bet in town. Hamish Risk reports.

Rates

Rates survey 2011: Wider rates margins add heat to the competition

Rates survey 2011: Wider rates margins add heat to the competition

The three established leaders have high market shares and plenty of rivals. Large banks, recovering from their own recent near-death experiences, have singled out rates as one of the first businesses to fight their way back into. Newcomers are pitching in too. Peter Lee reports.

Euromoney Rates survey 2011: Results index

A new Euromoney survey shows three established leaders have high market shares and plenty of rivals. Large banks, recovering from their own near-death experiences, have singled out rates as one of the first businesses to fight their way back into. Newcomers are pitching in too.

Turkey

Turkey: The gains and pains of investment grade

Turkey’s ambition for an investment-grade rating might be realized this year. Strong fundamentals and political stability almost guarantee it. But if it gets a triple-B rating, two problems remain. What can foreign investors buy, and will making the grade undermine further reform? Nick Lord reports.

Investment banking

Africa

Aganga reshapes Nigeria’s public finances

Nigeria’s finance minister, Olusegun Aganga, says he has nothing to hide about the pre-election depletion of the country’s Excess Crude Account. But, as he explains to Dominic O’Neill, with a new sovereign wealth fund the government will save more, protecting the economy from shocks and encouraging private and foreign investment in key infrastructure projects.

Country risk

Trade finance

Trade finance

Banks tap emerging markets growth The rapid expansion of trade within emerging markets is a big opportunity. But Basle III requirements represent a huge risk to trade finance.

Banking news

Markets news

Asia news

Latin America news

EEMEA news

Comment

A new world order: The empire strikes back

Over the past year, Euromoney has written often of the generational shifts in the economic and financial balance of power between the old world and the new. Many of the world’s biggest banks are pinning their hopes for growth on such shifts, and express nothing but excitement at their prospect.

Columns

Abigail with attitude: In exile

The wilderness years may be the title of a TV mini-series but it could as easily be a state of mind. I have been thinking about those who are in exile. Obviously potentates such as Zine El Abidine Ben Ali, the former president of Tunisia, come to mind, but might the phrase also apply to senior bankers who are temporarily resting?

Macaskill on markets: Judgement day looms on capital charges

Has Barclays perfected the art of interest rate alchemy? It seems to think it might be close to mastery of the vagaries of interest rate curve management, judging by statements in its recently released annual report for 2010. Barclays said that interest rate hedges of product balances such as deposits had generated a gain of £1.403 billion ($2.28 billion) in 2010, while comparable hedges of group equity brought in £1.788 billion.

Inside investment: Alice in Cohn land

Goldman Sachs’s Gary Cohn thinks hedge funds, not banks, are likely to cause the next financial crisis. He needs to take a long hard stare in the looking glass.

The Franco-German squeeze

Conditions for expanding the EU’s EFSF are set to be agreed by the end of the month. Even if only some of the Franco-German proposals are implemented, the euro will be greatly strengthened.

Front End

2011 Guide to Technology in Treasury Management