Latest articles from Markets

Playing with fire

December 1, 2004

Leading investment banks’ lucrative relationships with hedge funds have multiplied across a number of business silos. But their exposure to risk has grown too. Could their overlapping business lines spell trouble in difficult markets?

Spot the flaw

November 4, 2004

One of the more unusual economic theories of late holds that the financing of the US trade deficit by Asian central banks is not a cause for concern but a natural outcome of a successful development strategy in emerging markets.

What’s on the menu for Asian banks?

November 4, 2004

Once again, the future of the world economy hinges on whether Asian central banks will retain their appetite for US treasury bonds and allow the US to continue running a current account deficit.

No sleep ’til Basel III

November 4, 2004

After Basel II comes Basel III. Andrew Crockett, former general manager of the Bank of International Settlements (BIS) and now president of JP Morgan Chase International, admits that his former colleagues at the BIS become a little tetchy when he talks about Basel III.

Compliancy brings arbitrage benefits

November 4, 2004

Banks are feeling weighed down by the strain of complying with Basel II. Yet it is becoming clear that the compliant bank could be a very smart player indeed.

GMAC revs up the bond market

November 4, 2004

The US car maker’s over-subscribed bond issue was a triumph of diversifying fund sources, writes Edward Russell-Walling.
It is not often that General Motors Acceptance Corporation (GMAC) sets the corporate bond market alight. But as dealers trooped back to their desks after the summer holidays, it managed to do exactly that, in a display of well-judged opportunism.
Its two-tranche e2bn jumbo bond attracted bids worth an extraordinary e9bn in one day, even though the GM finance subsidiary had been put on negative outlook by Standard & Poor’s and a downgrade was expected by many. Such was the demand for the paper that lead managers Barclays Capital, Commerzbank and Deutsche Bank could price both tranches a whole 7bp within price guidance.

Border control

November 4, 2004

Cross-border issues always add extra complexity to M&A deals. But in the Cemex acquisition of RMC, co-lead managed by Citigroup and Goldman Sachs, there was clearly no language barrier, writes Nick Kochan.
When you are doing a cross-border deal, it helps if your codename makes sense in your client’s language as well as your own. This was not quite the case in Cemex’s purchase of RMC in September. When the English-speaking bankers referred to the deal among themselves, they called it Bromium. When they talked to their Spanish-speaking clients, they called it Bromo.
And the bankers also had different interpretations of the name: one thought it was named Bromo after a volcano in Java, while another thought it was called Bromium after an ingredient in cement. Cross-border communication between bankers and client might have got horridly confused. In fact, relations were faultless.

Investment banks build up property financing presence

November 4, 2004

As the good times roll in the global real estate markets, the capital markets have been moving further and further into real estate lending. Natasha de Teran finds out who has the upper hand in commercial mortgage-backed securities.
Property financing was once the purview of commercial banks alone. However, a trend in which a handful of investment banks entered the US real estate markets following the doldrums of the late 1980s has since begun to extend to Europe and beyond.

Zenji Nakamura

November 4, 2004

Nomura may not be the swashbuckling firm that it was in the 1980s and 1990s but, according to Zenji Nakamura, head of global markets, Europe, that will not prevent it from regaining a more prominent position in the international capital markets. Geraldine Lambe finds out how it intends to flex its Asian advantage.

Are you in?

November 4, 2004

Covered bonds continue to gain acceptance, with new issuers increasingly attracting the traditional pfandbriefe investor. Should they wait for covered bond legislation or go the structured route? Michael Marray finds out that there is a big market for both.

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