Foreign banks are pushing the sector forward even as the rewards come in. The capital market is also showing signs of life but would benefit from more determined decision-making. Florian Neuhof reports.

Its capital markets are a hive of activity – with record levels of IPO activity, decreasing funding costs and a first hostile takeover attempt. But many of the most active companies say that the queen bee of government is too strict: tax and infrastructure problems are preventing the country from reaching full potential. Lawrence White went to São Paulo and Rio de Janeiro to investigate.

The country’s newly revitalized banking system throws up colourful characters and eccentric approaches to marketing. But overseeing it all is a rigorous central banker with solid US commercial banking experience. Eric Ellis reports.

The hedge fund industry has exploded; conservative estimates suggest there are almost 500 funds based in the region. Most have ridden the wave of Asia’s rising markets. Now those returns are getting harder to come by. But, as Helen Avery reports, increased opportunities to take short positions offer managers hope of generating new, enhanced returns.

In less than two years the Philippines has transformed its sovereign debt programme from laggard to leader in emerging markets. The work of the republic’s treasurer, Omar Cruz, lies behind much of the change. Euromoney talks to the Philippines’ market man about the changes and the challenges ahead.

CDS trading volumes in Latin America are growing fast as credit derivatives become an increasingly important investment tool. Leticia Lozano reports on the impact on the region’s capital markets.

Árni Mathiesen, Iceland’s finance minister, speaks to Laurence Neville about this year’s economic troubles and the economy’s prospects.

“The events of February and March can be blamed in part on the relative lack of knowledge about the Icelandic economy and its peculiarities, which was reflected in some reports,” says prime minister Geir Haarde.

Increasingly sophisticated Russian retail investors are seeking new products to beat interest rate returns. Patrick Gill reports.

Companies with optimized financial supply chains have 30% to 35% better market capitalization than companies that haven’t. However, forging the links between treasury and operational departments is hard, particularly as supply chains enlarge and globalize.

For many years the accepted wisdom in global banking has been that bigger is better. The full-service banks dismiss smaller competitors, saying that to succeed in modern finance you need to offer all things to all clients. And yet a number of European banks continue to demonstrate success in their chosen specialist fields. Peter Koh profiles the financial institutions that prove you don’t have to be everywhere and everything in the world to be a world-class operation.

Only incorporated in 2005, Almaty-based Max Petroleum shows that smaller, independent energy companies can still make their mark against the more powerful Russian and global firms.

Kazakh investment banking boutique Visor Capital believes it can offer clients a bridge between local and international markets. It is looking to open up new avenues for corporates and international investors alike. Can it compete with the more established competition?

Nigeria’s economic reforms have been impressive. But after the resignation of a key figure in the country’s turnaround, can they be made to stick? Rupert Wright reports from Abuja and Lagos.

Big banks are beginning to look beyond the kudos that socially responsible investment brings and are introducing microfinance to the capital markets as a viable, profitable business. Zach Fuchs reports.

Hungary’s OTP Bank dominates its domestic market, but can it compete with regional powerhouses such as Raiffeisen International and UniCredit, or is it in danger of being swallowed up itself? Kathryn Wells meets OTP’s long-serving chief executive, Sandor Csanyi, to find out.

Richard Lark, CFO of low-cost airline Gol Linhas Aéreas Inteligentes, exemplifies the increasing sophistication that ex-bankers are bringing to Brazilian corporate finance. He is a qualified pilot, was formerly a vice-president at Morgan Stanley and is a borrower whose company’s stock value has doubled since its IPO. Lawrence White spoke to him in São Paulo.

Güler Sabanci, who chairs Turkey’s Sabanci Group, talks to Peter Koh about foreign partnerships, international expansion, the group’s strategic direction and the difficulties of running a family business.

The London-based asset management firm has taken the lead in persuading institutional investors worldwide, including central banks and pension funds, to go for long-term investment in emerging market assets. Felix Salmon reports.

Christopher Egerton-Warburton is the new head of origination in the sovereign, supranational and agency (SSA) business at Goldman Sachs. “Edge” has been at Goldman Sachs for 13 years and has been associated with landmark trades such as the UK and German dollar deals. Of late he has focused on more strategic issues such as the creation of the International Finance Facility for Immunization (IFFIm).

Arrangers have confirmed that CMBS will form part of the permanent financing for Grupo Inmocaral’s €3.7 billion bid for Inmobiliara Colonial. The target has assets in Spain and France, owning a majority stake in French SIIC Société Foncière Lyonnaise.

Newcomers to the IMF/World Bank meetings could find the event overwhelming. Should they attend the seminars? And if so, which ones? Where’s the best place to hear the gossip? And which parties should they attend? Confused? Don’t worry because help is at hand from an IMF veteran, as dictated to Sudip Roy.

Asia’s hedge funds need more blue-chip assistance.

Rato can take the lead in combating the “financial balance of terror”.

“When we were marketing our Asia hedge fund five years ago, one head of a large US fund of hedge funds observed: ‘Shanghai, eh? I bet you get great sushi there’”

“By the end of the year we’ll have seen a lot of money being shifted around between hedge funds. Investors are getting anxious about returns and will certainly be rethinking their allocations and redistributing assets.”

Are bad habits returning to corporate Korea?

The long overdue bank consolidation in the Philippines highlighted in June’s Euromoney looks as if it is under way. Within days of the article’s publication, two of the key identified targets sealed a deal. Union Bank of the Philippines acquired International Exchange Bank (I-Bank) for $263 million equivalent. That price values I-Bank at about 2.2 times book value and gives Union Bank an additional 78 branches and $1.35 billion equivalent of assets. Now rumours are circulating that a much larger prize might be up for grabs. Rizal Commercial Banking Corporation (RCBC), the banking arm of the Yuchengco Group, is said to be in play with several mooted buyers.

The endless game of musical chairs at private banks in Asia claimed one of its most high profile scalps in August when Credit Suisse poached Marcel Kreis, southeast Asian head at arch-rival UBS, to run its entire Asian operation.

In the July issue of Euromoney we incorrectly stated that Mizuho Securities had “number one league table status in yen bonds ($31.4 billion from 191 deals)”. The figures quoted were for Mizuho Group rather than Mizuho Securities; they should have read “number two league table status with $18 billion from 105 deals”.