Cracks are showing in the bull market as doubters flag up risk
We’re at that stage of a bull market when the bulls are still thundering but a lot of other folk – the more conservative investors, bankers and regulators – are sounding notes of caution. The phenomenon appears in several guises in this month’s edition of The Banker.
As bankers and rating agencies try to push out the structures of hybrid issuance even further, the National Association of Insurance Commissioners put a spanner in the works of the US market by insisting that a Lehman hybrid be considered as straight equity. Kathryn Tully reports on the ensuing hiatus on page 40.
Russian IPOs are never far from controversy and Morgan Stanley’s pull-out from the Cherkizovo deal, because the bank thought the valuation by local partner Renaissance Capital was too high, showed a difference in opinion on where the market is headed. The outcome, as Ben Aris reports on page 46, was that the investors agreed with Renaissance and the company sold at the higher price.
But there are other cracks in the armour. A Fitch report on Iceland earlier this year led to a sell-off in the krona and other currencies of countries with high current account deficits. Iceland’s finance minister Árni Mathiesen, together with the country’s leading bankers, face down their sternest critics in The Banker’s highly charged round table on page 56.
With markets in a volatile mood, doubtless there will be further tussles over what constitutes acceptable risk in the months ahead.
June’s issue of The Banker has something of a Spanish flavour. As well as a special in-depth report on the country, Karina’s Kolumn is an interview with Repsol YPF’s CEO Antonio Brufau, at a time when the company faces the threat of Latin American nationalism. And in the technology section, Dan Barnes explores the IT gains from Santander’s takeover of the UK’s Abbey.
We also present our annual Technology Awards on page 24, in which more companies than ever before competed for the honour of receiving a trophy at our awards dinner at the Sheraton Park Lane this month. Dan Barnes explains why the winners were chosen.
One interesting feature of this year’s awards is the strong showing of Chinese banks which, in their challenge to modernise, are using technology in ever more creative ways.
Our first ever China Top 100 bank listing is presented on page 93, with a full explanation by research editor Terry Baker-Self.
Plugging into China’s new bank consumers – as well as those in other emerging markets – is now the foremost desire of the world’s leading banks. Editor-in-chief Stephen Timewell explores this business opportunity in the cover story.
To round off the issue, there are special reports on Cyprus, Kuwait, Qatar and Panama.
