Billions of dollars of foreign investment flooded into fast-growing manufacturers and real estate developers at the height of the China boom. Now, as the economy slows, many badly judged, rushed deals are unravelling, with investors unlikely to recoup more than a tiny proportion of their funds. Elliot Wilson reports.

As the Philippines faces the Legacy scandal, president Gloria Macapagal-Arroyo is trying to reassure the world that her country is better placed to withstand the global crisis, after the lessons of 1997. She talks to Lawrence White about Asian regional cooperation, trying to beat corruption and why she’s letting Legacy fail.

Standard Chartered has arranged and underwritten the first ever RMBS transaction for a state-owned entity in the Philippines. The Ps2.1 billion ($43.6 million) deal for the country’s National Home Mortgage Finance Corp comes in the form of notes with an average duration of five years priced at 8.4437%. There are two classes: senior notes aimed at institutional investors, and subordinated notes that the issuing entity will retain. Margarito Teves, secretary of the country’s department of finance, said that the bonds opened the door for further similar deals. Who said mortgage-backed securities were dead?

Fixed-income markets stand at a crossroads. The traditional model is broken. A new breed of debt advisory and trading boutiques believe they hold the key to the future. Some of the biggest names in the bond market are jumping on the bandwagon. Alex Chambers examines whether this is the day of the independents.

Good timing means telecoms transaction greeted with enthusiasm.

People wanted to believe ponzmeister Madoff because they crave stable, compounding returns. After his spectacular fall from grace, calls to shine a light on the opaque world of hedge funds will be irresistible.

With the business models of many of the largest financial firms destroyed by rapid deleveraging, it suddenly looks smart to be a purveyor of independent advice. The biggest, Lazard, finds corporations, governments and other banks desperate for help in repairing their balance sheets. Peter Lee reports.

The marketing campaign for the first-ever initial public offering from Armenia has been launched despite the fact that the country recently had to abandon attempts to support its currency, the dram, which depreciated by 25% in March.

Saudi debt markets are set for a resilient year, with the promise of more to come.

How do you explain the credit crunch to those outside financial circles? One banker recently told Euromoney that investment banks used to be dating agencies for capital markets:

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.

Just days after the UK Debt Management Office stated that it would use syndication on a quarterly basis to distribute bonds, a 40-year gilt auction failed. Only £1.627 billion of bids were attracted to the £1.75 billion sale of the 2049 bond. The failure was attributed to a sudden turnaround in investor sentiment for gilts and a function of the distortion caused by the Bank of England’s quantitative easing. The last failed auction took place in 2002.

The final take-up of HSBC’s fully underwritten rights issue to raise £12.5 billion ($17.7 billion) is due to be announced on April 8. It would be interesting to know what the take-up was like among HSBC’s own employees.

Driven by rising oil revenues and booming economies, the number of private equity funds setting up in the Middle East and North Africa boomed until the beginning of the economic crisis. Some 100 funds focused on the region have raised $19.5 billion in capital there. However, now that stock markets have crashed, funds are finding it hard to deploy capital. "The sellers have dried up," says Fadi Arbid, executive vice-president and country head of Saudi Arabia at Amwal AlKhaleej, a MENA-focused private equity house. "Six months ago, companies were looking to sell stakes to private equity firms. Then stock markets crashed – the Saudi market has lost 60% since last August – and private equity funds have had to say to those prospective companies that the prices on the table before are no longer valid." The result has been that sellers have walked away or delayed that process. "It’s very difficult for these companies that are turning a profit and even growing, have great fundamentals, are in a steady environment, but which have seen the market caps of their public comparables wiped. To suddenly hear that they are worth perhaps 60% less today when they are more profitable is difficult to take, and unsurprisingly, they are turning away from selling."

New UBS chairman and chief executive show the pressure the country’s banking system is under.

The euro benefits from being the anti-dollar.

Banks create core tier 1 capital via buyback operations.

With the authorities throwing everything but the kitchen sink at the markets, they need to make sure that the left hand knows what the right hand is doing.

Mexico’s transport and communications ministry, the SCT, is expecting soon to relaunch its second federal highway re-concessions programme, Paquete del Pacífico, known as Farac II.

Some of the smartest people in investment banking are seizing a unique opportunity to set up boutiques.

Have you recently found yourself trying without success to understand the causes and implications of the financial crisis? Have you longed in vain for the soothing words of a celebrity from the field of popular entertainment to explain to you in layman’s terms what is happening in the world of finance and what it means for you?

Is boring the new sexy? A long time ago, or so it seems, opaque was opalescent. Do you remember how, in early 2007, we marvelled at the alphabet soup of products banks were cooking up? As outsiders, we might have wrinkled our nose at such terms as CDOs, CLOs, SIVs, conduits and warehouses, but we knew bankers were much cleverer than the rest of us (they were paid so much more after all), so these creations had to be good things. To mere mortals, complex banking was creative, canny and above all glamorous, while the shadowy world of hedge funds and private equity was glamour squared.

Radical shift in Swiss National Bank’s monetary policy sparked talk that other central banks would join it in competitive devaluation race.

Lehman Brothers and the failed Icelandic banks leave their mark.

Yet more methodology-tweaking by Moody’s and Standard & Poor’s last month brought the prospect of downgrades to the triple-A tranches of cash CLOs ever closer to reality. Moody’s actions early in the month resulted in nearly 3,600 tranches rated double-A and below of 760 US and European CLOs now facing downgrades. S&P’s new approach envisages a 1.6 notch downgrade for senior triple-As, a 4.3 notch downgrade for junior triple-As and a 5.8 notch downgrade for triple-Bs.

Just when government bond investors were growing concerned at fast-deteriorating public finances and huge new supply of bonds to pay for stimulus plans and financial system bailouts, along came a new group of buyers to cap rising yields. Politicians and policymakers know they need to restore confidence to the markets, and central bank quantitative easing, creating money to buy government bonds, certainly looks like a confidence trick.

Much criticism has been hurled at Tim Geithner during his brief tenure as US Treasury secretary, but no one can say that he is not doing his bit to counterbalance job losses on Wall Street.

If China’s capital markets are to mobilize funds a simpler, more coordinated regulatory system is imperative.

Maturity of bond market will be tested as issuance builds.

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.