Foreign exchange has arguably held up better than any other financial market in the fallout from the sub-prime crisis. Will its robustness result in it being taken more seriously as both a business and as an asset class? And which banks have fared best in Euromoney’s benchmark industry poll?

Osman Semerci, Merrill Lynch’s former global head of fixed income, currencies and commodities, and co-president of the EMEA global markets and investment banking business, has joined $1.7 billion alternatives group Duet as its chief executive. Duet Group, which started in 2002 with just $10 million in a single fund, now has 14 funds, and is looking to further expand its range of strategies, in addition to growing its private equity business.

There may be plenty of doom and gloom among private equity practitioners in the US and western Europe as a result of the global credit crunch that has all but dried up their cheap financing. In Russia, though, the mood among their peers is almost euphoric. "I am amazed by how relatively easy it is to raise money for a private equity fund in Russia," says Florian Fenner, managing partner at UFG Asset Management in Moscow, which is fundraising for its second private equity vehicle. UFG is looking to raise at least $500 million and expects to make a first close at least half that figure in May.

A $259 million loan to support an acquisition financing for an offshore drilling vessel in Brazil completed syndication last month. The transaction, which was underwritten by GE Transportation Finance, GE Energy Financial Services and WestLB, was oversubscribed. The syndication, launched in February, has been deemed a great success. Mike Mullen Energy Equipment Resource, a Dallas offshore investor, has bought the vessel from Petrobras.

Not content with its £10 billion-a-year PFI programmes, the UK government plans to extend its use of securitization to its student loan book. This is worth about £18.1 billion and is expected to increase in value to £55 billion over the next 10 years. Legislation is now in the House of Lords to enable the government to sell these loans to the capital markets – a process that it hopes will raise £6 billion by 2010.

Only suckers believe that the remedies applied to the credit crisis have cured the underlying sickness. There’s more painful adjustment to come, and it could last two to five years.

In a further sign that the world’s leading companies view Russia as a core market, US drinks company PepsiCo is paying $1.4 billion to acquire 75% of Lebedyansky, Russia’s leading juice producer. Lebedyansky, which controls 30% of the country’s juice market, reported sales of $800 million last year. "This agreement provides us with a strong platform for continued expansion in one of the world’s fastest-growing juice markets," says Michael White, PepsiCo’s international chief executive. Once the initial purchase is completed a mandatory offer to buy the balance of the outstanding shares, which are listed in Moscow, is set to be launched later this year. Lebedyansky, which controls 30% of the Russian juice market, reported sales of $800 million in 2007.

UBS has done a service to all investors in bank stocks and bonds by making public the report requested by the Swiss Federal Banking Commission into the root causes of its sub-prime losses.

As part of Man Investments’ plan to expand its range, the firm has joined its European credit manager, Pemba Credit Advisors, with Ore Hill, a US credit specialist. Man has taken a 50% stake in Ore Hill, and Ore Hill has taken a 50% stake in Pemba.

Liquidity remains the primary challenge in the present environment, meaning that few credit managers have ventured beyond the relatively liquid credit derivative indices. Managers including BlueCrest, Cairn Capital, CQS and Pimco are all seeking to take advantage of the unique opportunities the dislocation in the credit market has created, say market participants.

High-ticket foreign purchases by Tata Steel and Hindalco have grabbed the headlines but India’s SMEs are also increasingly acquisitive. Cash-rich, or funded by enthusiastic local banks or foreign investors, they are taking advantage of turmoil in the US. Elliot Wilson reports.

The International Capital Markets Association raised SFr100,000 ($97,000) for underprivileged children with its annual ski weekend in Davos at the end of March. The event is more than 30 years old, but the potential for charitable contributions was only realized last year.

The volume of equity raised in the Middle East so far this year is up 62% on the same period in 2007. Issuers from the region have raised $11 billion-worth of equity year to date, mainly through IPOs, which account for 60% of total volume, up from just 47% in 2007.

The Eurasian Development Bank, which was founded in 2006 to finance infrastructure projects in Russia and Kazakhstan, is to expand its remit to include investments in financial institutions, according to its chairman.

Citi has appointed Andrew Au as chairman of Citibank China and chief executive Citi China after an extended search to replace the previous incumbent, Richard Stanley, who was nabbed by DBS in February. Citi’s press release made no mention of Stanley, who presided over a successful period of investment for the bank in China, but described the search for a replacement as "comprehensive". Au has been with the firm for 24 years, and was previously country head for New Zealand before moving to Hong Kong to take on various regional oversight roles including head of trade for Asia-Pacific.

"Who is this?"

The crisis suggests that privately owned banks are not self-evidently better managed nor more effective at allocating capital than state-owned ones.

The Bank of England’s special liquidity scheme does nothing that hasn’t already been done by the Fed and the ECB – except on more onerous terms.

Leading Russian corporates Gazprom and Evraz both attracted strong support for Eurobond issues in April. Gas company Gazprom sold a $1.5 billion five- and 10-year deal via Citi and Morgan Stanley; steel producer Evraz sold $1.6 billion of five- and 10-year paper via ABN Amro, Calyon, Deutsche Bank, and UBS. Both issues were heavily oversubscribed and performed well in aftermarket trading. VTB, the country’s second-biggest bank, is set to follow with a $1 billion issue, the first in a series of transactions that will involve it seeking $4 billion of foreign funding this year.

More on sovereign wealth funds

A plentiful supply of cheap, high-quality farmland means Russia may become key in the drive to solve global food shortages.

In April, Instinet added Korea to the growing list of markets where it operates alternative trading systems.

A reduction in foreign capital flows means that many banks in eastern Europe are indirect victims of the credit crunch.

The grip of the credit crunch seems to be easing for Brazilian corporates wanting to issue debt. This optimism from Brazil is in line with the rest of Latin America, where the debt market fog is clearing.

With the euro hitting fresh record highs against the dollar, it must be tempting for European policymakers to crow. However, complacency could lead to crisis.

Speakers at the EuroHedge Summit offered sound advice: leverage addicts were warned about the drug’s potency, and panickers were advised to panic in good time. Neil Wilson reports from Paris.

Conifer Securities, which provides back- and middle-office solutions to hedge funds, family offices and endowments, has bought Morgan Stanley’s outsourced trading business. The platform provides independent trade execution in equities, options and ETFs to Morgan Stanley’s prime brokerage hedge fund clients. Conifer has also recently hired UBS’s former head of prime brokerage for the Americas, Dick Del Bello, as a senior partner.

The fuller acceptance of volatility as an asset has moved closer with a new range of investable indices.

Senior officials at the US Treasury are urging Latin American countries to pursue policies that will help grow their mortgage markets, despite the sub-prime woes of the US.

The Argentine central bank will shortly start operating as a counterparty in the local swap market traded at the country’s main fixed-income exchange, the Mercado Abierto Electrónico.