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December 2001:

Stock market reforms and restructuring portend further share price rises. There is money to be made, say fund managers, for those with patience and diligence.

With Mario Draghi taking up a position on the European Central Bank’s governing council, and Jürgen Stark set to be the next new member, the inner sanctum is likely to become more pragmatic than doctrinaire.

Conflict over oil and gas supplies is set to fuel tension between western Europe and Russia in coming years.

Where developed western markets go, Asia’s markets usually follow. Bankers in the region are confident that’s true of hybrid securities. From a buy-side perspective, hybrids have arrived already. As many as a dozen international issuers, most conspicuously from Latin America, have successfully tapped an Asian retail market driven principally by private bank clients hungry for yield.

In Japan emerges from the shadows, February issue, we reported that Nikko Citigroup had led a ¥120 billion domestic bond deal for Sanyo last September. In fact, the deal was for Sony. Apologies to all concerned.

Asian-based hedge funds generated 30% of all reported commissions earned by brokers over the past 12 months on trades of Asian stocks.

As China’s banks continue their rapid restructuring, government and regulators are already mapping out the future for the industry. “One word is becoming very important in China’s banking sector – deregulation,” says Zhang Jinguo, president of Bank of Communications (Bocom). “Banks in the west were talking about this in the 1980s and 1990s. We’ve been talking about this only since last year.” The People’s Bank of China, the mainland’s central bank, wants several so-called universal banks to emerge. That, say China bankers, means huge opportunities for mergers and acquisitions of banks and other financial services businesses such as securities firms and insurance companies.

The organizers of Rosneft’s IPO, tentatively scheduled for October or November, are considering placing the shares in Tokyo as well as in Russia and London, according to Valery Nazarov, head of the Federal Property Management Agency. However, he has so far ruled out a simultaneous flotation.

Italy’s Intesa has won the battle to acquire an 85.42% stake in Ukrsotsbank, Ukraine’s fourth-largest bank. The bank has 527 branches and serves more than 660,000 customers. Banca Intesa says that it values the bank at $1.3 billion and that its total investment will amount to $1.61 billion, including the share capital increase. Intesa already owns banks in Croatia, Hungary, Slovakia and Serbia & Montenegro.

Kazkommertsbank sold a S$100 million ($61 million) bond last month, the first ever Singapore dollar-denominated issue from a Kazakh issuer. European investors bought 65% of the three-year paper, with the rest divided between Asian and offshore US accounts. Singapore government securities offer very low absolute rates, and the deal’s success was attributed to the pick-up and currency diversification that it offered.

Fitch and S&P put Nigeria’s risk of default on the same level as Brazil and Turkey.