Emerging Europe

Global DCM volumes reached $1.26 trillion in the first half of this year but this 2% increase in volumes comes from a 55% drop in deal activity according to recent figures from Dealogic. Corporate investment grade volumes reached a record of $802 billion for the period – more than double last year’s figure, and senior government guaranteed debt was up 38% to $291.6 billion. Structured finance is a shadow of its former self at just $39.7 billion.

Despite negative returns in 2008, hedge funds should bottom out this year and look attractive to many investors compared with other asset classes. Neil Wilson reports on the latest data.

Frederic Boillereau has assumed the responsibilities of Andrew Brown, who had been global head of FX at HSBC. Brown’s departure follows three record years for the bank’s FX business and is for personal reasons. Under Boillereau, who has been at HSBC since 1998, HSBC has finally got around to integrating its FX spot, forward and options businesses. Boillereau also remains in charge of HSBC’s metals activities.

New global currency looks remote prospect

But reserve currency diversification could be one upshot of the current crisis.

The International Finance Corporation has teamed up with Japan Bank for International Cooperation to launch a new recapitalization fund for struggling private-sector banks in the emerging markets.

Fitch Ratings downgraded its ratings for Russia for the first time in more than a decade as a result of falling oil prices, dwindling foreign currency reserves and record capital flight. Fitch cut Russia to BBB from BBB+ and maintained its negative outlook. "The scale of capital outflows and the pace of decline in Russia’s foreign exchange reserves have materially weakened the sovereign balance sheet," says Ed Parker, Fitch’s head of emerging markets in Europe. "The downgrade reflects the negative impact on Russia from the fall in commodity prices and the dislocation to global capital markets that has left Russian banks and companies struggling to refinance debt."

Royal Bank of Scotland is closing its operations in Kazakhstan as part of its business reorganization.

Acquisitive stock exchange operator Wiener Börse is considering a possible bid for a stake in Croatia’s Zagreb Stock Exchange, a move that would further boost its claim to be the leading bourse for investors looking for exposure to central and eastern Europe. Wiener Börse official Beatrix Exinger told Euromoney that there had not been any formal discussions about a takeover offer but added: "Generally we are interested in making strategic investments in exchanges throughout the entire CEE region and that would naturally include the Zagreb Stock Exchange as well, but there have been no detailed talks as yet."

Kazakhstan has witnessed a dramatic series of events in recent weeks as the central Asian state grapples with the growing challenge of the global credit crunch and associated economic slowdown. At the start of February it devalued its currency by 18% to about KT150 to the dollar.

Turkey and the IMF appear to be inextricably linked in 2009. In October, the world’s bankers – or what is left of them – will descend on Istanbul for the annual World Bank/IMF meetings.

The RTS Stock Exchange in Moscow has seen good demand for its new euro/dollar futures contract, launched on February 5. Turnover in the contracts, which have a notional value of just €1,000, reached 142,565, or $1.8 billion, on February 17, making it probably the most successful FX contract launch for some time. Local banks have been providing liquidity; demand is said to be flowing in from retail participants.

The Turkish economy has made great strides forward since the financial meltdown of 2001. But has it changed enough to survive the global economic slump? Guy Norton reports from Istanbul.

As in the bond market, emerging markets corporates will come under stress in the loans market. Refinancing needs are estimated to be $156 billion, with the biggest redemptions due in Russia, UAE, Mexico, Turkey and Korea, according to JPMorgan. And it is not just weaker credits that will be under pressure.

Analysts at Royal Bank of Canada recently summed up the prospects for many of the non-G7 economies in a piece of research entitled Running out of bullets.

Turkish regulators have eased issuance criteria in an attempt to breathe some life into the country’s moribund corporate bond market. At the end of January the Capital Markets Board (SPK) slashed the red tape governing the structuring and timing of corporate bond issuance as fears grew that Turkish corporates would face growing difficulties in rolling over or securing fresh debt in the international syndicated loan markets, which in recent years have been the traditional source of funding for many of the country’s firms.

Emerging market investors who gorged on an increasing array of corporate debt products face uncertain times as companies’ balance sheets come under pressure. Default and recovery rates will vary greatly by country, writes Sudip Roy.

Emerging Europe needs a coordinated bank bailout – and fast.

The Private Banking and Wealth Management Survey 2009 received 1643 valid votes (1244 'part B' votes, 399 'part A' votes), representing $11.8 trillion of Assets under Management.

Super-rich families that have weathered the Madoff fraud and fund blow-ups, or are uneasy with state support for the parents of their private banks, are turning to independents or multi-family offices for wealth advice. Helen Avery reports.

In a high-profile move, Grigory Marchenko has been appointed as chairman of the National Bank of Kazakhstan (NBK) for the second time, replacing his successor, Anvar Saidenov.

In the second part of Euromoney’s foreign exchange debate, which took place in late 2008, industry experts consider the future for the business. There is still cause for optimism, although inflation remains a big unknown and there are real fears of governments’ ability to sustain debt levels.

Consolidation among investment banks has had a big impact on the equity capital markets league table results in 2008 and will do so again in 2009.

Key numbers from the equity capital markets in 2008 include $257.4 billion, the value of equity raised by financial sector issuers, accounting for 41% of total ECM volume of $634.4 billion. That’s up from just 11%, the financial sector’s share of new issues in 2007. In 2007, total global ECM volume was $943.7 billion