Arab banks have sustained the recovery that began in 2002, with Gulf institutions in the forefront. Morris Helal reports. Research provided by Capital Intelligence.

There are no holds barred in the competition between exchanges. As people arrived to hear a Hans Tietmeyer lecture in the City of London organized by the Chicago Mercantile Exchange, they were greeted outside the venue by young ladies handing out leaflets spouting the benefits of trading FX with Eurex US. It all seemed harmless enough.

Pension funds’ need to outpace the effects of inflation has prompted growing exposure to alternative investments. Commodities look to be a good source of such diversification. But should exposure be direct or through an index? And if the index route is chosen, which benchmark is to be preferred?

Global M&A volumes are heading back up to levels not seen since 2000. This should give investors pause for thought: 2000 was, after all, a year of excess. Although the market is very different today, some things never change. Peter Koh reports.

In the end the winner was Mohamed ElBaradei and the International Atomic Energy Agency, but a little-known fact is that Hugo Chávez was also in the running for this year’s Nobel Peace Prize. Venezuela’s president was one of an incredible 199 people on the short list for the award. According to Australian bookmaker Centrebet, Chávez had odds of 80-1 to win. Long odds, perhaps, but a whole lot shorter than Tony Blair’s at 500-1 or George W Bush’s at 1,000-1. It’s doubtful that this will encourage a rapprochement between Washington and Caracas.

632 The number of entities at risk of downgrade as of mid-September this year, according to a report from Standard & Poor’s.

In the face of an uncertain economic outlook, including rising inflation caused by oil price rises and the scrapping of heavy fuel subsidies that forced rises in local interest rates, the Indonesian government has raised $1.5 billion of bonds. The government’s steps actually helped the issue since international investors felt that the administration of president Yudhoyono is finally getting to grips with the problems facing the country. The government issued $900 million 10-year bonds at a yield of 7.625% and $600 million 30-year bonds at a yield of 8.625%, respectively 329 and 406 basis points over US treasuries.

1,900 – estimated number of hedge fund managers that need to register with the SEC by February as part of the US regulator’s new rules for the industry.

The jumbo covered bond market was 10 years old this year. Its key characteristic has always been liquidity. But one analyst thinks this is no longer the case. Is the jumbo market in for a shock? Mark Brown finds out more.

Just days after Refco announced what it termed “significant volume increases on its professional and institutional FX trading platform, FX ProTrader”, activity on the platform ground to a complete halt.

The M&A boom is good news for equity capital markets. M&A, as well as generating more transactions, tends to be more profitable than other types of ECM deals. Banks with strong M&A businesses stand to benefit most. Peter Koh reports.

Harvard University’s endowment fund has appointed as its head emerging-market legend and one-time candidate as IMF head Mohamed El-Erian. Formerly, El-Erian was running $30 billion in funds at bond investment manager Pimco. He takes over from Jack Meyer who, following complaints about his large compensation package decided to leave with some of his team to run a hedge fund. Meyer is likely to make a success of the new venture given that he has built up Harvard’s fund from $4.7 billion in 1990 to its present $25.9 billion.

In another sign of Vietnam’s economic reforms, the finance ministry confirmed in local media that the government had approved the country’s maiden sovereign bond issue. Up to $500 million-worth of dollar-denominated bonds are likely to be issued this year. Moody’s upgraded the sovereign to Ba3 in July.

Reports that Spanish company Telefónica was in talks to acquire Dutch telecom rival KPN for around $24 billion sent shares in KPN soaring and prompted talk of another round of consolidation in the European telecoms market. KPN denied being in talks with Telefónica.

Venezuela’s president is also unlikely to endear himself to Washington after saying that he has sold $20 billion of foreign reserves, mostly in US treasuries, over the past four months and deposited the funds at the Bank for International Settlements in Basle. A central bank director admitted that Venezuela had sold some of its holdings of treasuries, citing financial reasons. Some analysts, though, reckon the move was motivated more by political reasons.

Quote from Brian Shapiro, president of management and technology consulting firm Carbon360, in regards to the impending registration deadline imposed by the SEC.

As the world awakes to the possibility of a bird-flu pandemic, analysts at CLSA have assessed the economic implications for Asia of an outbreak. CLSA has compiled an index of relative economic risk based on healthcare expenditures per capita, tourist arrivals per capita and total trade as a proportion of GDP. The results might surprise most readers. Based on these three measures, Hong Kong and Singapore emerge as the economies most at risk, followed by China, Malaysia and Thailand. Despite high spending on healthcare, both Hong Kong and Singapore remain highly exposed to the economic fallout from a pandemic by dint of their high dependence on international trade. Each country also has tourist arrivals roughly twice its population.

UK pension funds still have 65% of their assets in equities, but the figure is still dropping, according to European Credit Management, which expects it to fall to 50%.

Zhou Xiao Chuan, governor of the People's Bank of China, tells Sudip Roy why the renminbi was revalued and what financial reforms are next on the agenda.

Three monoline insurers were used to credit wrap Scotia Gas Networks’ £2.22 billion ($3.9 billion) bond sale via sole arranger Barclays Capital, and lead managers Citibank, RBS and DrKW in October. This deal refinanced acquisition loans extended for the purchase of the Scotland Gas Networks and Southern Gas Networks from National Grid Transco in June (five out of nine networks were also sold). Although investors are hungry for stable investment-grade credit (BBB in this case), the lack of financial history – a requirement for an exchange listing – meant that arranger Barclays was required to bring in the monolines – Ambac, FSA and XL Capital. The structure was sliced into 11 tranches and sold to a wide variety of investors (euro and sterling, fixed, floating and index linked). SGN is owned by Scottish and Southern Energy (50%), Ontario Teachers (25%) and Borealis Infrastructure (25%).

General Motors said it had reached a tentative agreement with the UAW to reduce the company’s spending on healthcare benefits and was exploring the sale of a controlling stake in its finance arm, GMAC. Along with its third-quarter results, it announced total planned cost savings of $6 billion over the next three years from a combination of reduced healthcare spending, sourcing cheaper supplies, making job cuts and closing plants, all in an effort to shore up its balance sheet.

Kazakhstan – Kazakhmys, the world’s tenth-largest copper producer, should raise as much as $1.4 billion when it floats between 26% and 30% of its stock in London later this year. The company boasts an impressive ebitda margin of 60% and a net margin of 34%. It mines about 90% of Kazakhstan’s copper output. Copper prices have gone through the roof in the past 12 months and demand for the shares reflects this. The share price range had been set at $8.10 to $9.60. Credit Suisse First Boston and JPMorgan Cazenove are joint global coordinators and bookrunners.

BNP Paribas has filled its global head of securitization post. Former Morgan Stanley securitization syndicate and trading head Tim Drayson joined last month. Drayson left Stanley after 10 years in March and joins at a time when BNPP has advertised its intention to grow its securitization business.

Refco, the troubled commodities and futures brokerage that went into financial meltdown after allegations of executive fraud surfaced in October, is likely to sell its futures business to private-equity firm JC Flowers. The company is also expected to put its capital markets business into bankruptcy. [see market leaders section, this issue -- Refco deals out a harsh lesson -- for comment]

In 2005, while issuers, underwriters, rating agencies and regulators have still been grappling with the question of covered bond identity, investor concerns have been more basic – spreads, yields, and the arrival of new investors. Mark Brown reports.

Denmark’s Saxo Bank has announced that it will open a London office in the “near future”. Lars Seier Christensen, Saxo’s chief executive, says the focus of the new office will initially be purely institutional.

Many investors fear October because it is associated with a number of market crashes. But according to research from ADVFN, a pan-European equity markets website, it is actually quite a good month for equities.

The European Union is introducing the first uniform covered bond legislation. The long-term effects could be beneficial, but some issuers still point to discrepancies between countries that could stifle the development of a cross-border European mortgage funding market. Mark Brown reports.

India’s private-equity business is growing fast again. But unlike the late-1990s boom of flows to technology companies, money is heading into a broad range of sectors, reflecting the strong performance of the economy. Kautilya Shastri reports.

“You ask a hedge fund manager how quickly can they do a deal. And they reply: ‘Is tomorrow quick enough?’”