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With volume in the EMEA equity capital markets up 132% this quarter compared with the first quarter of 2003, according to Dealogic, European equity capital markets appear to be in rude health. The IPO market in particular, which raised $7 billion through 39 deals, is at its strongest since the fourth quarter of 2001.

Several fund managers are taking advantage of the increased interest in currency markets by setting up high-margin currency hedge funds. But before they invest in such products, investors should examine the offerings closely. Julie Dalla-Costa reports.

Money will, of course, remain cheap. Indeed, the forward market now forecasts that the Federal Reserve will not raise interest rates this year. But it has been cheap for a long time. It has already driven massive amounts into equities and reduced volatility to historical lows. In early January, the options put-to-call ratio reached levels indicating that no-one wanted to take out any insurance against equity markets falling. However, the recent turn in these indicators suggests that a wall of worry is now being built.

Leverage in the emerging markets is now approaching an all-time high, according to fund managers and sell-side analysts. But the structure of investment patterns in this asset class means a crash is unlikely. Felix Salmon reports.

Results of Euromoney’s biggest ever credit research poll indicate that the development of relationships with continental European investors is crucial to success.

Russia's dependence on energy exports - and high energy prices - is growing. The government wants to play a bigger part in fostering this golden goose and seems to have found a subtle way of doing so without renationalization. Ben Aris reports.

The days when unselective punts on the Moscow bourse could bring triple-digit returns are probably over. Analysts now point to more modest gains from cautious trawls of smaller companies, private-equity funds and real estate. Ben Aris reports.

Liquidity poll April 2004

With increasing competition in the covered bond market, Pfandbrief issuers are working hard to retain their pre-eminence. But as the Landesbanken prepare to lose their state guarantees, Pfandbriefe are becoming a crucial financing tool. Mark Brown reports.

CEO and founder, Lightyear Capital

Investors in European high-yield bonds have fought hard for structural security. Issuers that bypass it will have to pay a premium.

As BNP Paribas and Exane were preparing to unveil their joint venture plans, Crédit Agricole was deciding what to do with the equities businesses it had picked up along with Crédit Lyonnais last year. Crédit Agricole already had a strong brokerage business in the form of CAI Cheuvreux, which has the highest-ranked (13) pan-European research of any French broker, according to the July 2003 Thomson Extel Focus France Survey. Merging Chevreux with Crédit Lyonnais' weaker European brokerage business would have made little sense, as the overlap would have been too great. One French analyst says: "A good merger is one in which one plus one is more than two; Chevreux plus Crédit Lyonnais would probably be worth less than one."