| Last year the international capital markets were heavily influenced by the arrival of a new investor: Mrs Watanabe, the mythical Japanese housewife. Japanese retail investors like Mrs Watanabe bought about $20 billion of Eurobonds in the second half of 1995. The pace has slowed but Japanese individuals still put about $16 billion into foreign securities in the first six months of 1996. And now for this year's big new investor: Mr Watanabe. But Mr Watanabe is no myth. Hiroshi Watanabe is deputy manager of the investment department of the Public Teachers' Pension Fund. Watanabe has invested, according to market estimates, $15 billion in Euro medium-term notes (EMTNs) in the 12 months since mid-1995 when the institution Japan's third-largest public pension fund, with assets of ¥61.9 trillion ($590 billion) decided to bring the management of a portion of its funds in-house. Watanabe invests mainly in highly structured securities such as reverse dual-currency bonds (where the principal is in yen, but the coupon is paid in a foreign currency). Buying is on an enormous scale. Watanabe has been known to invest as much as $1 billion in a single week. |