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New loan programme re-establishes relations.

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.

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

Why CFOs should stop mistrusting hedge funds

Increasing numbers of pension funds in Europe are making the choice not to use hedge funds in the region since returns have dropped off.

Saudi and Qatari banks launch new investment products. National Commercial Bank has become only the second Saudi Arabian financial services provider to launch a Shariah-compliant mutual fund that will invest in the countries in the Gulf Cooperation Council.

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.

After a few tough years, the country is on investors’ radar screens again.

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?

One of southeast Asia’s top finance officials says that the region must continue to harmonize if it is to stave off the threat of growing competition from China and other north Asian economies.

Investors are pushing bank CEOs to produce growth. Some are now touting their ability to wring cost savings from IT, capital management and the rationalization of wholesale businesses after big mergers. National regulators are losing their power to block cross-border deals. We are almost at the point, Peter Lee reports, where every big bank is in the firing line.