Latest articles from Markets

As safe as houses

February 2, 2005

Edward Russell-Walling examines the move by HBOS to create a social housing covered bond and its attractiveness to European investors.Any half-decent treasury textbook warns of the need for diversification of funding sources. Few advise the creation of a new asset class, although that has not discouraged HBOS. Last December, the bank carved out new territory in the sterling debt market with a £3bn programme of covered bonds secured on loans to housing associations. Enter stage left the “social housing covered bond”, a hitherto unknown species of debt.

Banks open their doors on to the world of Islamic finance

February 2, 2005

Islamic bond issuance is growing from an investor-driven market into one which is issuer-driven and there are strong signs that it is becoming more that just a niche market, says Edward Russell-Walling.
This year’s first sukuk, or Islamic bond, has already come to market – a $600m five-year sovereign issue from Pakistan. It will not be the last. As 2005 got under way, various London bankers and lawyers were beavering away on at least three other international Islamic deals.

Andrew Pisker

February 2, 2005

Dresdner Kleinwort Wasserstein CEO Andrew Pisker explains to Geraldine Lambe how his strategy for remodelling the investment bank has paid off and why there will always be room in the global market for good mid-sized European businesses.

Alvaro de Molina

February 2, 2005

Cuban immigrant Al de Molina has done an impressive job as treasurer of Bank of America (BofA). “In a difficult interest rate environment, he adroitly managed the ups and downs, with the treasury business ending up being an important contributor to the bottom line,” says Joe Morford, an analyst at RBC Capital Markets.

What’s wagging the top dog?

January 3, 2005

When a company gets a bid approach, analysts are entitled to come to one of two conclusions: either the management was underperforming and a would-be owner can see hidden value that could be achieved by new management; or the management did a great job in making assets attractive for sale and getting a great price for shareholders. With London Stock Exchange (LSE) in play again, things are more complicated.

Double trouble for dollar and Dubya?

January 3, 2005

The two most influential people in the world economy in 2005 will be Chinese central bank governor Zhou Xiaochuan and the manager of a small Dutch pension fund. Between them, these two characters hold in their hands the fate of the US dollar and whether it has a graceful landing or a crash landing.

Lloyd’s takes long route to market

January 3, 2005

After 300 years, Lloyd’s of London has issued its first bond to improve its capitalisation and its ratings – underlining the venerable market’s modernisation. Edward Russell-Walling reports.
History seemed to be catching up with itself when one of the world’s oldest markets knocked at the door of one of its youngest in search of capital. Yet Lloyd’s of London is such a unique credit, with such a stormy recent past, that corporate bond investors needed some convincing. It has taken Lloyd’s a little over three centuries to issue its first – and highly successful – bond, raising the equivalent of £500m in lower Tier 2 capital.

New solution to an age-old problem

January 3, 2005

When it came to creating a bond to tackle the thorny issue of longevity risk that pension funds face, BNP Paribas drew on the broad talents and outlook of its global risk solutions team, as Geraldine Lambe explains.

Hot products for 2005

January 3, 2005

Geraldine Lambe selects products that are expected to be among the most popular this year.
In The Banker’s search for the hottest products of 2005, it proved impossible to find anything in the equity capital markets. Despite the fact that equity is historically cheap and debt historically expensive, only Lars Kreckel, European equity strategist at ABN AMRO would make a comment, and that was limited to: “We think equities as an asset class will do well next year and see liquidity flowing in at the beginning of the year.” In debt, derivatives, structured products and FX, however, it is a different story. What follows is a selection of the most popular.

Yoshiyuki Fujisawa

January 3, 2005

Since Merrill Lynch acquired Yamaichi Securities in 1998, it has not been an easy passage for the firm’s Japanese business. But, as Yoshiyuki Fujisawa tells Sophie Roell, this year, the tide has turned.
It may have been a long time coming, but Merrill Lynch’s Japanese operations have had a bumper year. The bank chalked up about $130m in profits, making it the most lucrative foreign brokerage in Japan. “We enjoyed a good year last year,” says Yoshiyuki Fujisawa, chairman of Merrill Lynch Japan Securities. “And hopefully, this year will be [good], too.”

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