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A survey of 100 institutional investors conducted by business school EDHEC showed that only 15% have invested in replication products, with 30% reporting that they will never do so. The majority of respondents doubted that the behaviour of hedge funds could be replicated and criticized the products’ poor performance, lack of transparency and deficient technology.

Henning Rasche, president of the association of German Pfandbrief banks (VDP), has resigned as a member of the board of managing directors at Eurohypo, effective December 31. His replacement will be Ralf Woitschig, head of public finance at Eurohypo’s parent, Commerzbank. Rasche, who was re-elected to the VDP presidency in June, has been at Eurohypo or its predecessors since before the jumbo Pfandbrief market launched in 1995.

"If you track our market performance since the election in early March... there is probably less volatility" -Dato’ Yusli Mohamed Yusoff, Bursa Malaysia

Fertilizer maker CF Industries is looking to invest $1 billion to develop petrochemicals plants in Peru. The company plans to build two plants – one producing ammonia and one urea – the company’s president announced at the Asia Pacific Economic Cooperation (Apec) forum, attended last month by leaders from 21 Pacific Rim economies. Peru is working to persuade foreign companies to invest billions of dollars to develop petrochemicals plants that can utilize products coming from Peru’s Camisea gas field.

Are we already into the era of unconventional monetary policy?

Gatwick sale will test appetite for infrastructure assets.

Up to now interest in volatility as an asset class or strategy has been limited.

In a stark reflection of the reliance of Spanish securitizers on the European Central Bank’s largesse, the Spanish government has itself agreed to purchase Spanish RMBS and SME CLOs. It has established a Financial Asset Acquisition Fund that will purchase securities with a minimum double-A rating up to €50 billion in volume. Spain has also introduced a mortgage moratorium for the unemployed under its mortgage policy facility. This will enable jobless workers and pensioners with families to support to defer mortgage payments for up to two years. The moves reflect concern about the impact that Spain’s real estate slump will have on the wider economy.

The past few months have been significant for Austrian exchange Wiener Börse’s attempts to position itself as the prime conduit for portfolio investment in central and eastern Europe. In a notable run it has managed to secure majority control of three exchanges in the region. Most recently, it signed an agreement in November to acquire a 92.4% stake in the Prague Stock Exchange, one of the largest in central and eastern Europe, with a market capitalization of about €40 billion.

In its latest report on OTC derivatives market activity, the Bank for International Settlements says that notional amounts of FX derivatives increased by 12% to $63 trillion in the first six months of 2008. Gross market values rose by 25% to $2.3 trillion. The expansion was fastest in options and currency swaps. BIS reported that outrights, which account for roughly half of total OTC FX derivatives when measured in terms of notional amounts, grew less quickly.

The losses in the long/short strategy favoured by the majority of hedge funds show no signs of abating.