Emerging Europe

"There is no such thing as a fully protected risk"

Insurance and capital markets: convergence or collision course?

Market participants say that the borrowing binge by Russian banks and corporates in recent years could come back to haunt them, given the much tighter credit market conditions in 2008.

In one of his last acts before his bank was bought by Barclays for £373 million last month, Expobank chairman Kirill Yakubovskiy persuaded 12 of his female staff to strip off for a racy calendar. Ranging from secretaries to senior executives and aged between 20 and 33, Expo’s finest fillies didn’t leave much to the imagination. Senior manager Maria Guterman is Miss January, wearing a tray of enticing cakes and little else, while Miss February is network sales manager Yevgenia Trusilova, bending over a kitchen counter alongside the phrase "we work under your personal request". It will be of considerable comfort to John Varley that his vehicle for emerging market expansion can boast such great figures.

Since the beginning of the 1990s there has been a huge increase in foreign direct investment in central and eastern Europe.

As part of plans to boost Moscow’s position as an international financial centre, the Federal Financial Markets Service has announced plans to exempt investment in securities from taxation. The proposal forms part of a strategy document covering the period to 2012. If approved, the FFMS proposal will come into force in 2009.

With big declines and huge daily swings, stock markets around the world looked even less welcoming to new issuers in March than they had for much of the year, during which time companies fearful of a cold reception had withdrawn or postponed more than $20.5 billion-worth of deals.

US investment bank Merrill Lynch has created a new infrastructure equities index, giving investors convenient access to the projected infrastructure boom in Russia.

The stellar returns from reinsurance that lured in hedge funds in the wake of the 2005 hurricanes have dissipated. But this won’t deter managers with long-term strategic plans, reports Helen Avery.

The New Masters of Risk? How insurers are testing out their capabilities in finance

Commodity prices continue to break records, defying the spectre of slowing growth in the US and the performance of other asset classes. With some commentators attributing the price rises to the billions being poured in by investors, is it boom or bubble? Peter Koh reports.

Investors looking for attractive long-term return potential could do worse than look at bank stocks in southeastern Europe. That’s the conclusion of a recent report by Günther Hohberger and Gernot Jarny, banking analysts at Erste Bank in Vienna. Entitled South east European Banks: Boom or bust? the report looked at the banking sectors in Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Montenegro, Romania and Serbia, and concluded that overall growth rates for banks in the emerging economies of southeastern Europe versus the more developed markets in central Europe will be higher for the next decade at least.

More assets are yet to be hit in the credit crisis and, as leverage continues to fall out of play, liquidity will keep on drying up. Equity prices are bound to fall still further too.

Moody’s Investors Service has assigned a Baa1 country ceiling for long-term foreign currency debt and Ba2 issuer ratings for the Republic of Montenegro. All ratings carry a stable outlook. "Montenegro’s ratings reflect the new country’s growing integration with the European Union and the financial stability afforded by the use of the euro as the official currency," says Kenneth Orchard, a Moody’s senior analyst. "Among Montenegro’s main rating constraints are its lack of administrative capacity and relatively underdeveloped judicial institutions."

Its strength in emerging markets makes it a serious player in FX.

Local-currency debt markets in emerging economies are beginning to suffer from the credit crisis and broader global slowdown.

Dimitri Psyllidis, co-head of EMEA FICC at Merrill Lynch has left the firm. David Gu was announced as sole head of EMEA FICC.

Euromoney looks in depth at the global property and casualty insurers that our poll respondents vote as the best in the business. Overall winner AIG sees worrying signs of poor capital management in the industry, while second-ranked Zurich shows its flair for innovation and China’s Ping An has sizeable ambitions of its own.

Icap’s launch of an insurance derivatives and securities broking joint venture will promote liquidity and transparency in this fast-growing niche. If new sources of capital prove resilient to soft markets, insurers may see them as a new strategic challenge.