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By mid-September, US companies had announced plans to buy back about $114 billion of their own shares, about two-thirds the amount announced in all of 1996, and one and a half times 1994's total, according to Securities Data. But while such buy-backs have been viewed as a bullish signal for the past few years, they are now increasingly viewed as little more than elaborate sleight of hand designed to con investors. If they've artificially boosted the stock market, as many now suggest, might the enormous overhang they are creating also trigger its fall?

When the Republica Oriental del Uruguay sold a 10-year bond on the international debt markets in September 1996, officials at the Banco Central were pleased to note that the 160 basis point spread was tighter than some recent offerings from investment grade-rated sovereigns, strength-ening their belief that Uruguay was ready for an upgrade.

The Kalff interview

The Kalff interview

Systematic traders and risk managers rely on tons of historical data to help predict probable gains and losses. So how will they predict the behaviour of the euro during its first few trading days, weeks, months? By David Shirreff.

Commerzbank used to be content pushing along as Germany's number-three bank. As local rivals merge and grow, this bank is too proud to downsize. In equities at least, it wants to be a global player. Laura Covill reports.

When high-flying Hong Kong investment bank Peregrine decided to set up a joint venture in South Korea six years ago, its partner must have seemed an excellent choice. A medium-sized conglomerate, the Dongbang group was a reasonably well focused business, the leading maker of cooking oil, a producer of food materials and owner of a restaurant chain. Inexperienced in investment banking, it was not likely to interfere in the day-to-day running of the business.

Arguments over how to price a deal will never go away, even for frequent borrowers. Most have 15 or more investment banks chasing the mandates, offering the issuer all sorts of advice and inducements. A treasurer who chooses an aggressively priced deal might save his institution a few thousand dollars over 10 years and make himself look good to his bosses, but if it's too aggressive and investors don't buy it, could this harm his future issues? And if the deal is too generous, why should investors bother to buy paper issued later that might be more accurately priced?

I've just returned from Germany, visiting the great in government, bureaucracy, Bundesbank and the European Monetary Institute. I'm convinced the Bundesbank will raise interest rates by 25 basis points before the year-end and by around 200bp by the end of 1998.

With Japan's financial deregulation gathering pace - and foreign players emerging as the clear winners - Japanese institutions have been slow to formulate defence strategies. Some see their salvation in growth areas such as investment banking and asset management. But as Jack Lowenstein reports, their real future may lie in linking up with outsiders. And foreign acquisition of Japanese firms may not be far off.

For all the talk of designing exotic derivatives for hedge funds, the most useful service a bank can provide is often good old-fashioned credit. Even so hedge funds are prompting banks to reorganize since their demands straddle many departments. The funds' importance as customers is starting to outstrip that of institutional investors, and the banks are dancing to their tune. Andy Webb reports.