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.

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.

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

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.

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.

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?

Understanding the mark-to-market meltdown

Will the long-awaited recovery in the German real estate market be stopped in its tracks by turmoil in the debt markets? Louise Bowman reports.

The effects of the sub-prime crisis are spreading and could cost 2.5% of world GDP. Emerging market economies will not be immune.

From a subsidiary of an English public school to a UAE migrant labour camp: diversification can hardly be said to be lacking at Evolvence Capital. The Dubai-based alternative investment group is reportedly planning to market bonds backed by commercial mortgages worth up to $700 million in order to kick-start a $1 billion Reit. Aside from a migrant labour camp, the Reit, the company’s first, will also contain a warehouse and offices. Evolvence is apparently aiming for the CMBS to be sold in the fourth quarter.

Independent M&A boutiques are sensing an opportunity in Japan as the country’s top corporate names increasingly look to firms not tied to large commercial banks when awarding cross-border mandates.

ABCP conduits suffered a reputational battering as a result of last summer’s liquidity freeze in the commercial paper market. However, if events in Mexico are anything to go by the concept has survived. In late February, Deutsche Bank was poised to launch the first Latin American ABCP conduit in Mexico, a diversified multi-seller vehicle dubbed Aztlan. Named after the mythical place of origin of the Aztec people, Aztlan has been set up to invest in various peso-denominated receivable pools, including trade receivables, future flow receivables, mortgage loans and consumer loans. Crucially, given the problems that this and the structured investment vehicle sector have wrestled with over the past six months, the conduit is supported by a 100% liquidity facility from Deutsche Bank. "I think that one of the most compelling features about this structure, unlike an extendible programme or a SIV programme, is that this conduit is afforded a traditional liquidity facility," says Alberto Santos, a senior director at Fitch Ratings. "The lack of liquidity facilities was at the forefront of the funding issues experienced during the second half of 2007. The structural features within this conduit, including the liquidity agreement, are expected to mitigate market disruption or timing risk for this conduit. Typically, liquidity facilities can be used to pay maturing commercial paper or to cover timing mismatch between assets and liabilities of a multi-seller asset-backed commercial paper conduit."