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Capital markets in the Gulf are rich with potential. The markets are developing rapidly, especially in the UAE, but international investors will only get involved once the requisite legal framework is in place. By Nigel Page

Chase Manhattan has never made a secret of its desire to buy an equities franchise to complete the line-up of its wholesale and investment-banking operations. So the announcement on September 12 that it was buying JP Morgan for about $35 billion was no great surprise. But it is also well known that JP Morgan was far from being Chase’s first-choice partner. It would have preferred a deal with Merrill. Inside Morgan, too, there is lingering disappointment that the bank could not complete its transformation into global investment bank unaided. The two sides must put these disappointments aside quickly.

Fiercely independent managers grew their research-oriented boutique from little Donaldson, Lufkin & Jenrette into one of the most successful Wall Street firms in the best businesses: equities, high-yield debt, private equity and online broking. For years, DLJ clung to its distinctive culture while owner Axa happily pocketed dividends. Now the French insurer has tossed it to CSFB and no-one knows if the two can work together.

They throw 80% of research straight into the bin; regard sell-side analysts as reactive and herdlike; and suggest that brokers see small hedge funds as being more valuable clients than major asset managers. So is there anything about brokers’ research that fund managers actually like? A panel of investors give their views. By Graham Field.

Managing director, The Europe Company

Renegade Czech financier Viktor Kozeny is soon to face in court angry American investors who claim he bilked them in a fantastic scheme to acquire Azerbaijan’s state oil company. From his luxury Bahamas base, Kozeny has been telling any journalist who will listen that he has few assets left to seize, while issuing wild threats to expose his accusers and even to sue the president of Azerbaijan. The ending to this colourful tale of greed and double-dealing in a wild frontier market may yet come down to dense legal arguments over trading records. Ben Beasley-Murray reports

Chairman, Barclays Bank, Germany

Head of fixed income, Aspect Capital.

To date, most Arab countries have been insulated from outside pressure due to highly protected markets and huge oil reserves. But foreign competition is set to increase, especially for markets joining the World Trade Organization. The biggest banks in small countries will have to look outside their domestic markets for growth, either through acquisitions or alliances. Darren Stubing reports.

There's a lot of hot air in Khartoum, and according to one lawyer working for Talisman Energy, the Canadian oil explorer, not all of it is blowing in from the Sahara. "Well, if you include planting date trees along the roads adjacent to the Nile - well yes, I suppose the infrastructure is improving." He pauses: "Oh wait, they died. Nobody watered them." The taxi driver swerves to miss a huge pothole in the main road and then quickly veers back into the street in an attempt to avoid those sleeping on the footpaths.

China’s economy continues its fast growth and its leaders appear firmly committed to continuing reform, as the country prepares for entry into WTO which may attract further substantial foreign direct investment. But the past 20 years of reform have been comparatively easy, having been imposed by an all-powerful central government on a closed economy. Now China must begin to compete globally and to cope with political tension at home arising from the uneven distribution of the benefits of reform. Phillip Moore reports