Brazilian and Mexican derivatives markets gain sophistication.

There has been no let-up in the spread war, highlighted in last month’s issue. Deutsche Bank has tightened up its spot FX prices even further to selected customers in response to Barclays’ introduction of precision pricing. Sources say that the bank is currently evaluating the impact, before deciding whether to roll it out further. A bank official says: “Deutsche Bank has recently introduced laddered and dynamic pricing to clients. This allows us to price liquidity to our clients more accurately.”

It is one of the great ironies of the European bond market that one of the largest market distortions occurs within the sovereign sector and are caused by the direct actions of Europe’s sovereign debt managers. The regulatory environment in Europe is tighter than ever, with the EU taking an aggressive and sometimes misguided stance in its aim of eliminating distortions in the capital markets, notably with its Market Abuse Directive and MiFID. And yet, despite all the EU’s talk of market efficiency, it ignores the market abuse happening right under its nose.

Australia’s new-issue market heated up this month with the announcement of three large IPOs. Goodman Fielder, a leading Australian foods business, controlled by New Zealand entrepreneur Graeme Hart, intends to raise about A$2 billion ($1.48 billion) from a listing in Australia and New Zealand. Singapore Power’s holding company for its Australian electricity assets, SP AusNet, has also filed a prospectus for a simultaneous IPO in Australia and Singapore that is expected to raise approximately A$1.6 billion. Another electricity asset, Spark Infrastructure, filed in November for an IPO that aims to raise A$1.8 billion to fund the acquisition of minority interests in Australian power assets held by Hong Kong’s Cheung Kong Infrastructure.

Analysts expect the Province of Buenos Aires to achieve a 90% participation rate for its $3 billion debt restructuring, when it closes on December 16. If it succeeds, it will be a stunning result, given that those investors who accept the restructuring own debt worth about 40 cents on the original dollar.

Banks are expanding their presence in energy trading – again. But with two established incumbents, is there enough profitable business for the newcomers? Kathryn Tully reports.

From an asset class perspective, the CDO sector dominates the pipeline and within that sector CLO issuance is at the vanguard.

Until recently only multilaterals with a regional mandate, such as the ADB and IFC, have shown much interest in issuing bonds in Asian currencies. But KfW is planning a three-pronged attack on local-currency issuance in 2006. So are local markets about to take off?

Bond returns have come closer to matching equity returns over the past 25 years, according to Deutsche Bank. European credit strategists Gary Jenkins and Jim Reid looked at more than a century’s worth of data from the US. They found that, over a 105-year sample, equities produced a real total annual return of 6.53%, compared with 1.42% for US Treasuries and 2.5% for corporate bonds. But since 1980, equities outperformed corporates by just 1.5 percentage points.

The world’s largest foreign exchange banks have made a mistake in streaming prices to scores of electronic platforms and inviting everyone to participate in them. Now, they want to take back control. As Lee Oliver finds out, a new bank-only system is being touted as the answer. Who is behind it, and will it succeed?

Report says lower risk weighting will encourage banks to look at MMFs.

Proposals in the French budget bill for 2006 and discussions in parliament last month could lead to significant changes in France’s public sector debt and risk management. Risk management role for AFT as Cades remains separate borrower.

Could the southern hemisphere provide a solution to the problem of how to settle derivatives trades cleanly and quickly?

UK Takeover Panel amends its rules on contracts for difference.

Capital market practitioners have failed to develop the necessary credit skills to assess and absorb infrastructure risk. Now as Philip Moore reports, these shortcomings are being addressed.

Although deals by large listed companies grab the headlines, BEE is having an impact at all levels of South African economic life. Despite its short investment horizon, some bankers see a natural fit between private equity and BEE.

“Around three years ago we read in Euromoney and other serious financial publications that we had a big problem with our banks. So we decided to do something about it... and that is why we have achieved what we have achieved in reforming the bank sector.”

James Montier of Dresdner Kleinwort Wasserstein, investors’ favourite equity strategist as ranked by the Thomson Extel Survey, has identified seven common mistakes in the investment process of fund managers everywhere. His analysis challenges some of the most deeply held beliefs.

According to Greenwich Associates, the average salary of a hedge fund manager last year was $280,000. The average annual bonus was $900,000.

Regulators can congratulate themselves after continuous linked settlement worked, but mutterings of serious shortcomings carry on.

Brazil's hedge funds break through

Citigroup to take on $11 billion of risk in a single package.

Resolution becomes a new type of insurance participant in the Tier 1 hybrid insurance capital sector.

As the festive season approaches, speculation is rife about who will get the lion’s share of this year’s bonus pool. But that’s nothing compared to the build-up to the Morgan Stanley staff pantomime. As the bank is again generously sponsoring the season at London’s Old Vic Theatre, where Kevin Spacey is artistic director, its employees also get the chance to tread the theatre’s hallowed boards. After the Old Vic production of pantomime ‘Aladdin’, Morgan Stanley takes over the theatre for one night in January to put on its own show.

Brazil's hedge funds break through

Demands for compensation from two currency option brokers over the rogue trading scandal of January 2004, presents the market with another act in one of the most entertaining financial farces for years.

Algorithmic trading is transforming the secondary equities market and the brokerage business. Its growth seems inevitable, but what will the consequences be? Peter Koh reports.

The cost of retaining commodities traders is rising faster than comparable costs in any other area on the street, according to a new financial markets compensation report published by executive search and strategic consulting firm Options Group. “Energy has been a very neglected business for a long time, especially the area of energy derivatives,” says the group’s co-founder, Michael Karp. “Now lots of banks are trying to recruit in this area and commodities traders’ compensation packages should be up 30% from last year. It’s been difficult to find skilled energy traders for a couple of years but now the market’s getting tougher on a daily basis.”

Banque du Liban et d’Outre Mer (Blom), Lebanon’s largest bank, with a paid-up capital of $128.3 million, is set to continue its regional expansion via its acquisition of Egyptian-Romanian bank, Misr Romanian Bank (MRB). Saad Azhari, general manager of Blom, said: “We expect the acquisition to be completed in the first two weeks of December [2005].” He expects Blom eventually to hold between 80% and 100% of MRB’s shares.

Mexico has long been one of the most innovative sovereign issuers when it comes to liability management. Now, the sovereign has become the first developing nation to sell warrants, allowing investors to exchange foreign debt with local.