Latest articles from Markets

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.”

Non-banks join booty competition

December 1, 2004

Another threat to mainstream banks comes from the rise of internal banking at large corporations that then fans out into providing external services. Siemens Financial Services (SFS) has only been in operation since 1997 but already boasts an E8bn balance sheet, of which 75% relates to non-Siemens business.

Corus of approval as bond issue is deemed a success

December 1, 2004

Anglo-Dutch steel maker Corus is enjoying an upturn in fortunes, as signalled by its latest deal. Edward Russell-Walling reports.
All companies have bad patches, but steel makers’ bad patches tend to be more nerve-wracking than most. So when Corus’s first straight bond issue in September attracted bids worth eight times the available paper, it was very public recognition that the good times are returning for the Anglo-Dutch steel company.

A duty to emerging market debt

December 1, 2004

The higher returns of emerging markets should be the answer to the problems facing poorly performing European pension funds. Sluggish equity markets, low dividends and the risks of being on the wrong end of a new corporate governance drama (like that of Enron or Parmalat) are starting to make emerging markets relatively more attractive.

Small players take initiative in China

December 1, 2004

Insisting on majority control, it took Nestlé most of the 1980s to negotiate its first direct investment in China. At that time, even one of the world’s largest and best capitalised multinationals was nervous about doing such a deal.

New bond exchange to rouse derivatives market

December 1, 2004

The JSE Securities Exchange in South Africa aims to give a boost to a lifeless exchange-traded derivatives market by trading the underlying cash instruments and derivatives side by side. Edward Russell-Walling reports.
The South African bond market – at least, the government bond market – is one of the most liquid in the world. So it is hardly in need of competition to pep it up. Yet competition is what it is about to get – not because of any shortcomings in the bond trade itself, rather as an attempt to waken a lifeless exchange-traded derivatives market.

Fine tuning pays off

December 1, 2004

Credit Suisse First Boston, in its role as joint lead manager, worked to overcome Russia’s challenging economic conditions to strike Rosbank’s first international capital markets deal. Geraldine Lambe meets its pioneering team.

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