Cash rich investors are looking to put their money to work

The unwinding of correlation model price-driven trades has caused losses, but the credit markets have withstood the post-GM fallout

Everyone expected the downgrade of Ford and General Motors to junk status. Now it has happened, the long-term consequences for the market are unclear. The move threatens to wipe out the trading profits of hedge funds and banks, with CDOs causing particular concern. Mark Brown reports.

Looming implementation of the EU Prospectus Directive is adding momentum

The chairman of the SEC throws his weight behind Sarbanes-Oxley

Delay could mean SEC is reconsidering terms

Despite a more uncertain rate and credit environment, new issuers and investors continue to enter the covered bond market. As the boundaries between traditional and structured products blur, Asia and the US are the targets.

The Asian bond markets have given investors an easy ride in the past two years. Now, with inflation and interest rate uncertainty, buyers need to be smarter.

Management of emerging markets lender Standard Chartered Bank is putting its own advertising slogan, 'We go the distance so you go further', to good internal use in its efforts to integrate its largest acquisition, the US$3.4 billion deal with Korea First Bank (KFB).

What connects the world's best borrowers in 2005? Their ability to secure attractive funding through innovative structures or reaching out to new markets, often when the conditions are not in their favour.

The International Swaps and Derivatives Association held a gala dinner in London in May to celebrate its 20th anniversary.

Banks readjust after rare correction in asset-backed market Structured credit markets approach the June half-way mark with the spread cycle reversed. All but the most recent new issues are trading below par and the heady times of heavily oversubscribed deals are over for now.

Investors snapped up the bonds on rarity value, as Germany went for an early deal

Leveraged buyouts and auto company problems are taxing the minds of bond investors, but there's a more insidious form of event risk they should be wary of. Company executives, under pressure from boards and active investors including hedge funds, are starting to engage in financial engineering to try to boost their stock price. Bondholders are set to lose out. Antony Currie reports.

With Greece continuing to run budget deficits that are unpalatable to credit rating agencies and breach EU guidelines, the government must look beyond tax increases to deal with the problem. Dimitris Kontogiannis reports.

UBS economist Jonathan Anderson describes its as "one of the most, nay, the most overly-hyped themes in the markets today". But the question of when and if the Chinese renminbi – currently pegged at 8.28 renminbi to one US dollar – will be revalued against the US currency continues to fascinate and obsess global foreign exchange markets. There appears to be a growing consensus among analysts that the Chinese government will make some adjustment to the peg in the near future, perhaps even in the present quarter.

Bankers see little chance of a global bond issue

Regulator makes new attempt to solve 'legal person' shares overhang

The Chinese government is at it again. Having already spent at least $45 billion in what may well prove to be vainglorious attempts to fix the country's ailing state-owned banking system, the People's Bank of China (PBC) announced that the State Council has decided to part with another $15 billion of foreign exchange reserves to shore up the capital base of Industrial and Commercial Bank of China, by assets, the nation's largest bank.

A research report published in May by the Institute for Monetary and Economic Research, part of Korea's central bank, recommends that regulators in Korea promote more investment in domestic banks by domestic investors at the expense of foreign capital.

News that Knight Trading has agreed to acquire Attain, a small ECN, passed almost unnoticed as the securities industry's attention was focused on the New York Stock Exchange's dramatic decision to merge with electronic rival Archipelago, and on Nasdaq's acquisition of I-Net.

ECM syndicate merry-go-round BNP Paribas has hired Florence Sztuder from SG to replace Tom Kennedy, who left the bank in April, as head of equity syndicate.

New launch is sign of growing sophistication in fixed income investing

Investor sentiment has soured dramatically over the past two months, with more fund managers now expecting growth to slacken and corporate profits to fall. A Merrill Lynch survey of 300 fund managers indicates that a net 32% are now negative about growth prospects and that a net 34% are negative about the corporate profit outlook, a significant turnround from March when investors were positive about growth and corporate profits by a net 11% and 4% respectively. Expectations have not been this low since 2001.

Despite concerns, long-only funds are trying to flatter their returns

Raiffeisenbank International's CEO, Herbert Stepic, says he intends to use the profits from Raiffeisen's successful IPO on April 21 to bid for Aval Bank, the second-biggest bank in Ukraine. He says: "We are in good negotiations with the owners [private Ukrainian investors] and we hope to come to terms by the start of June." The deal would be one of RZB's largest acquisitions in eastern Europe. Aval Bank has the largest retail banking business in Ukraine, with total assets of €1.5 billion.

Algeria: bank reform picks up pace

Regulation:

Mizuho has announced plans to establish a private banking company in Japan. The 70-person unit, Mizuho Private Wealth Management Company, will provide consulting services and various personalised financial products for clients with 500 million yen or more in assets. It will be a tough market to crack, however. A private banking market in Japan has never fully taken off despite attempts by both foreign and domestic players. Wealthy Japanese have tended to keep their money on deposit, while the banks have not focused on customer service. Even at a retail banking level, only now is there evidence of a service-oriented banking culture, led by Shinsei and Tokyo Star.

Many funds say the fall-out from GM/Ford has been overstated