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With the economy recovering from the recession incurred by the peso devaluation, Mexican companies are poised to sell between $1 billion and $3 billion in equity to overseas investors in the next 12 months. After two years of stagnation, observers expect renewed domestic consumption in 1997 to revive expansion projects placed on the backburner since the 1994 crisis. If the markets are adequately bullish, more companies will feel comfortable enough to issue equity as a cheap way to retire expensive debt.

The Bank of England's discussion paper released in November on the supervision of credit derivatives rather dampened market enthusiasm reflected in a report by the British Bankers' Association (BBA). But the effect should be only temporary.

At the Kazan Universal Exchange in the Tatarstan capital, 1,500 km east of Moscow, traders can find virtually anything for sale from flowers to furniture to plumbing supplies. But upstairs at the exchange itself, the one item they will be hard-pressed to find are corporate stocks.

In 1996, the convergence rally on high-yielding European government bonds was one big, premature Emu party, staged in the belief that all the governments that said they'd be ready for first-round entry to the eu's single-currency system would be. Market enthusiasm was based on taking note of contender countries' political commitment to European economic and monetary union rather than their economic fundamentals. This year bullishness will be replaced by a more cautious approach, as the markets become increasingly volatile.

Any American above a certain age working in finance remembers The Bankers, Martin Mayer's 1975 bestseller. But since then Mayer has become something of a cause célèbre of all things bank-related. Then he became chairman of a New York school board.

It will be hard to beat last year's crop of deals. Here are some of the best.

Investment banks see Asia as the next big market, so the largest ones have all established derivatives operations in the main centres. That means fierce competition ­ but it's a fight for relatively thin demand. Regulators in some countries restrict use and local exchanges are undeveloped. But growth has come in surrogate markets and such instruments as covered warrants in Hong Kong. Antony Currie reports.

International investors hoping for rapid changes to China's financial system will be disappointed. The quick fix is not Beijing's style. Nevertheless, the slow-but-sure approach is producing encouraging results, as Sophie Roell reports.

Brokers' analysts in Asia have been arrested for taking their duties too seriously. But that's a minor reason for the poor quality of the region's research. Corporate disclosure is limited and accounting standards are poor. And analysts are young, inexperienced, harassed by overmighty corporate finance departments and intent on careers outside research. By Michael Steinberger.

Europe is changing. Against all expectations, the advent of a single European currency, backed by a strong fiscal "Stability and Growth Pact", could prove the catalyst for a much more efficient corporate sector. Despite the economic absurdity of the Maastricht criteria, the struggle to meet them is producing what Europe needs most a smaller government take from national income.

With economic growth still running apace Asian economies are hard-pressed to maintain and develop infrastructure. Project finance deals, in an increasingly private-sector context, are hotly contested by banks, but countries in the region vary widely in their ability to undertake them. Gill Baker reports.

Hillboot Intergalactic Asset Management,