Published in conjuction with: ABN Amro - BNP Paribas - Citi - Commerzbank - Deutsche Bank - Fortis - HSBC - ING - Rabobank - SEB - Société Générale - Standard Chartered

Credit Suisse is building its investment banking presence in the Andes. The Swiss house is adding an executive in Bogotá and is on the lookout for a person in Lima to bolster client coverage. The group has been aggressive in the region for the past 12 months and wants to consolidate its position. Credit Suisse took part in a series of high-profile deals in 2007, including the $2.8 billion privatization IPO of Ecopetrol, as well as deals for some first-time issuers such as Peruvian fishmeal company Copeinca.

China’s ICBC, the world’s biggest bank by market capitalization, has been granted a licence to operate in the Qatar Financial Centre. This is ICBC’s first outlet in the Gulf, although in September 2007 the bank’s president indicated that a branch was planned for Dubai. Activities at the Qatar branch will include wholesale and investment banking, as well as asset management, consulting and trust services.

Since launching in 2007, Chi-X, the pan-European multilateral trading facility run by Nomura’s Instinet, has made notable inroads into the market for trading German stocks, regularly trading more than 15% of the daily turnover of blue-chip companies such as BASF. At the same time, however, Xetra, Deutsche Börse’s order book, has increased its market share of domestic trading to a record 99%.

Inflation, far from being a thing of the past, is back in the forefront of investors’ and issuers’ minds. The increased use of innovations such as liability-driven investment means a rise in demand for inflation-linked products. How are the markets responding?

Latin American bankers appear confident that the region can continue to avoid the worst of the US contagion.

Private placements are becoming an increasingly common route for emerging market companies seeking to tap global debt markets.

The Japanese megabanks claim there are no shocks to come on the sub-prime losses front. If true, it’s a big leap forward for transparency.

As an agreement between FXall and ITG shows, multi-asset platforms can be created virtually.

Six months into a credit crunch there are few signs of an improving outlook for non-government bond markets. It is a signal equity investors would do well to heed.

Amid all the bad news surrounding the world’s best-known banks, one institution can hold its head high after its latest results.

Lebanon still has no president, and now its public debt has been downgraded.

The financial services sector in the former Yugoslav Republic of Macedonia looks set to remain a magnet for foreign direct investment thanks to growing economic and political stability.

Central and eastern Europe is by no means immune to financial woes, strong economic growth levels notwithstanding.

Companies are beginning to look to their neighbours for investment flows.

Foreign banks continue to eye expansion opportunities in Kazakhstan, despite the cloudier outlook for the central Asian republic’s financial sector. South Korea’s Kookmin Bank is in talks with Bank CenterCredit, the sixth-largest Kazakh bank, with a view to taking at least a 30% stake. UniCredit is looking to finalize its $2.2 billion purchase of ATF Bank, Kazakhstan’s number four player. But the Italian bank has become embroiled in a legal dispute with US hedge fund QVT Financial, which has accused it of abusing minority investors’ rights. Finally, a Russian investment bank is reported to have built a 10% to 15% stake in the country’s largest bank, Kazkommertsbank, on behalf of an unknown party, prompting further takeover speculation.

February 11 was supposed to be so much fun for Anil Ambani. The billionaire younger son of the late Indian industrialist Dhirubhai had just floated his latest investment vehicle on the Mumbai stock exchange. Reliance Power’s stock sale was a cracker: sold in less than 60 seconds, its mid-January roadshow was a whopping 73 times subscribed, sucking huge chunks of liquidity from the system. Investors scrambled to buy paper linked to India’s latest infrastructure play – a company so shiny new that its valuation is based on a dozen huge power plants that won’t come online until 2012. Yet Ambani’s party, held at his plush Mumbai residence, turned out to be more wake than celebration. In the few weeks since Reliance Power’s roadshow, India’s markets tanked. The local benchmark Sensex index lost more than 20% in the five weeks to February 12. Several infrastructure-related IPOs were also pulled in early February, including Indo-Dubai real estate joint venture Emaar MGF, whose initial stock sale was slightly less than 90% subscribed when it was pulled.

The downward curve on Reliance Power’s post-launch stock price chart (see India: Reliance Power unplugged by inconstant investors, Euromoney, March 2008) wasn’t the only graphic shocker in India last month. In a single week in early February, three Indian corporates – Wockhardt Hospitals, real estate firm Emaar MGF and SVEC Constructions – pulled their IPOs. The lack of demand for their paper among every class of investor was stunning. Emaar’s $1.64 billion stock sale performed best but was subscribed just 0.83 times. Investors were even more Scrooge-like with SVEC’s tiny $10 million sale, which was only a quarter covered. But pity poor Wockhardt, whose $165 million was subscribed a pitiful 0.15 times on the institutional investor side, and just 6.44% among qualified institutional buyers.

Julius Baer plans to undertake an IPO of its US asset management business later this year, aiming to raise $1 billion. According to filings with the SEC, the US arm also intends to launch hedge fund and private equity vehicles. Its private equity funds will focus on central and eastern Europe.

Latin American private equity fund managers report an increase in interest from European investors. According to a survey of managers by KPMG, European institutional investors account for 13% of fund sources – in 2004 European investors had no presence at all. European investors are also becoming more prominent relative to US investors as the latter, having become a little more risk averse, are looking away from Latin America towards more established markets to make investments. US institutional investors are still the primary sources of funds, said 41% of respondents; in 2004, though, this figure was 49%.

Corporate earnings forecasts might still need to fall but the near 20% collapse in global equity markets since their 2007 peaks suggests that the worst might already be almost fully priced in.

Saxo Bank has promoted Tobias Straessle, who was chief information officer, to chief operating officer. The bank has also promoted Claus Nielsen to the new role of chief operating officer for trading. Saxo says Nielsen’s promotion reflects a change in its structure and will help to ensure coordination between all of the bank’s growing list of services. As a replacement for Nielsen, Saxo has hired industry veteran Steve "Wham" Braithwaite as its director, global head of foreign exchange and fixed income. The bank has also appointed two new spot dealers, Steve Bellamy, who joins from JPMorgan, and Matt Strand, who was at Bank of America.

The main clearing houses in Europe have had a busy few years.

Robert Palache has left Morgan Stanley after a little over 18 months in a role that involved the securitization of corporate, real estate and infrastructure assets. Palache was also the newly appointed chair of the European Securitization Forum.

Reserve managers are unlikely to suddenly adjust foreign currency holdings and latest IMF data suggest they will not chase the euro higher.

Richard D’Albert, global head of the securitized product group and CDOs at Deutsche Bank is not to become global head of the institutional client group at the European bank after all. Euromoney heard that D’Albert was taking on the global sales role Jim Turley’s decision to take a sabbatical.

Going up

Mid-East equity capital market volumes

A report by EDHEC says funds of hedge funds returned more than 10% in 2007 on average, compared with just 3.53% for the S&P 500 and 4.14% for the Lehman Global US Treasury Bond index. The best-performing strategy last year in single managers was emerging markets. All strategies produced positive returns, although a majority suffered a slight fall-off in performance on 2006.

Egypt’s banking system is undergoing wide-ranging reforms designed to make it more competitive. Have the lessons from the past finally been learnt?