Comment - All Articles

  • Magnum IPO: did you feel lucky?

    As expected, it hasn’t all been plain sailing for Asian IPOs so far in 2015. Macro events, chiefly in Greece and the Middle East, have taken their toll on regional issuance, as have increasing worries about China’s property sector. Even the mighty Alibaba hasn’t been immune to the doom and gloom, its share price in free-fall over a regulatory enquiry, writes Philippe Espinasse.

    • 30 Jan 2015
  • After a record year, what hope now for dim sum?

    After the boom comes the bust. If 2014 was a banner year for offshore RMB bond issuance, things are not looking too hot for 2015. Just four deals have priced so far, with the volume raised just a quarter of last year. Dim sum bonds have been a key tool of RMB internationalisation, but changing conditions have stripped them of their appeal. It’s time for Chinese authorities to get creative.

    • 30 Jan 2015
  • FHFA vs FHA: Here we go again…

    The US’s Federal Housing Finance Agency and the Federal Housing Administration are locked in yet another round of fisticuffs, with market share as the prize. If the private label RMBS market is to return, the government needs to stop hitting itself.

    • 29 Jan 2015
  • Is Europe sleepwalking into the next crisis?

    Lulled into a false sense of security by the European Central Bank’s quantitative easing programme, investors seem to think they are immune from events in Greece. It’s certainly true that markets are in much better shape than they were when the country was first bailed out in 2010. Investors in AIB Mortgage Bank’s latest deal would probably vouch for that.

    • 29 Jan 2015
  • Mizuho’s ‘One Bank’ spreads its wings

    Having established itself as a player in European DCM, the bank has bigger ambitions in fixed income and beyond, writes David Rothnie.

    • 29 Jan 2015
  • Try not to end up behind bars

    Working in banking can often feel like a prison sentence – long hours, cruel compliance officers and no time off for good behaviour.

    • 29 Jan 2015
  • MTN Leak: The SG-Team

    If you have a problem, if no one else can help, and if you can find them, maybe you can hire the SG-Team.

    • 29 Jan 2015
  • The Troika needs to soften its stance on Greece

    A lot of ink has been spilt over the moral hazard of allowing Greece to restructure its €240bn in Troika debt with haircuts. But seeing Greece's struggle with debt as an essentially moral problem leads to a stubbornness that precludes pragmatism.

    • 27 Jan 2015
  • ECB must slow covered bond purchases or risk the market’s longer term damage

    Faced with shrinking yields, covered bond investors have been deserting the market. Unless the ECB moves out of the way and switches to sovereign purchases fast, there is a real risk that these buyers will not be there when the extraordinary stimulus measures now being delivered are taken away.

    • 27 Jan 2015
  • The EFSI is a force for good – but cannot cure infrastructure’s biggest blockage

    The European Commission’s “Juncker Plan” to boost investment by €315bn ($356.14bn) is welcome. Scepticism that it cannot work because it only has €21bn of capital is unwarranted. The European Investment Bank is putting its shoulder to the wheel and should not be underestimated. But do not expect this to solve Europe’s infrastructure investment problems. Money is not the problem. The real obstacles is are governments' indecision about what infrastructure they want and how investors will make a return.

    • 27 Jan 2015
  • Finding alpha in high grade bonds? Nip it in the bud

    JP Morgan’s investor survey found 19% of high grade investors think new issue premium (Nip) will be the best source of alpha in the year ahead. With yields on the floor, it makes sense, but it is sign of a deep malaise in the fixed income market.

    • 27 Jan 2015
  • The Yanks are coming! US issuers will muscle out Asian names in euros

    Asian investment grade bond issuers have made their presence felt in the euro market in recent years as they seek diversification. With the European Central Bank’s quantitative easing programme set to lower rates, now would seem the be the ideal opportunity for more Asian names to target eurozone investors. But with US large caps also eyeing euros, Asian credits are likely to get pushed aside.

    • 27 Jan 2015
  • Loan Ranger: Record volumes ahead in every sector (honestly)

    Loan bankers are a lovely, optimistic bunch who just want to get on with doing some deals whatever the weather, so the last thing they need is a scandalous naysayer peddling click-bait doom about their market, even if Russia is going to the wall (and it’s not of course).

    • 26 Jan 2015
  • Time for China’s domestic players to jump aboard the RMB internationalisation train

    With China's central bank finally starting to use the phrase "RMB internationalisation" to describe its efforts to promote the currency, the process looks set to enter a new stage this year. In contrast to earlier measures, the government's latest initiatives are all about encouraging capital and investment to go out into the wider world. That means it's time for China's domestic players to take a bigger role.

    • 23 Jan 2015
  • Draghi shows art of communication

    Buy the rumour and then buy the fact. That was the new twist on an old City adage on Thursday as the European Central Bank president, Mario Draghi, extracted maximum mileage from his announcement of quantitative easing in Europe.

    • 22 Jan 2015
  • Arguments for and against ECB’s bond buying

    GlobalCapital has outlined some of the reasons why sovereign QE is not the answer to the eurozone’s woes — and in the interests of fairness, we’ve provided one suggestion as to why it could be.

    • 22 Jan 2015
  • Storm clouds gather as Jain plots new strategy

    The Deutsche Bank boss needs a new strategy as fixed income and capital concerns strengthen the hand of universal banking naysayers, writes David Rothnie.

    • 22 Jan 2015
  • Damned if you do, damned if you don’t

    Although I don’t have much to do most days and life is one long holiday, I was still quite chuffed to leave Hong Kong’s stale air behind as I took off for a long awaited trip to New Zealand with the missus.

    • 22 Jan 2015
  • MTN Leak: Nobody puts Botta in a corner

    There are few things banks like to tout more than their cross-asset credentials, but Leak has learned of a pair of bankers with a cross-asset relationship.

    • 22 Jan 2015
  • Market awaits solution it doesn’t think will work

    European participants in the capital markets are waiting, with bated breath, for Thursday’s European Central Bank meeting and the expected announcement of quantitative easing, as well as the outcome of Greece’s Parliamentary elections on Sunday. But an interesting dynamic has set in around what were once thought to be two of the most important events of the start of 2015: no one seems to care much about either anymore.

    • 21 Jan 2015
  • Five against one — arguments for and against QE

    With even French president Francois Hollande saying earlier this week that the European Central Bank will announce sovereign quantitative easing on Thursday, there can be little doubt that ECB boss Mario Draghi is fitting the latest rocket into his bazooka as we write. Hollande may have had to embarrassingly backtrack since — with his office saying he was only talking hypothetically — but one can be certain that the flip flop is more down to a breach of etiquette, rather than an error.

    • 20 Jan 2015
  • When regulators try to do credit analysis

    The European Commission wants credit ratings left out of financial regulation — a great move, if it can find something good to replace them. But it’s making the right decision for the wrong reason.

    • 20 Jan 2015
  • Turkey’s central bank still needs to prove its independence

    Turkey’s central bank has had to fight hard to win respect as an institution independent of political pressure. With the country on firmer economic footing the central bank took its chance to cut rates — which will have delighted Turkey’s president. But the bank’s still shaky credibility and Turkey’s vulnerability to capital market vagary means there is more at stake.

    • 20 Jan 2015
  • CSRC margin crackdown is a shrewd move

    China’s ECM market had a tough start to the week, after measures by the regulator to clamp down on excessive margin lending by brokerages took their toll on stock markets, with equities plunging the most in years. But investors that fell victim to this volatility should take it in their stride. The China Securities Regulatory Commission’s stringent approach is smart — and bodes well for stronger markets in the longer term.

    • 20 Jan 2015
  • GC Blog: Foxed by financing

    Confusion hit Blog Towers late last week after a press release arrived in our inbox about Macquarie arranging financing for LDC to buy the NEC Group from Birmingham City Council.

    • 19 Jan 2015
  • Reginald D Hunter Rex and the birth of loan awards tragedy

    When a loans banker starts talking about comedy nights lingering in the memory either for being really great or really terrible, GlobalCapital has grown used to the name Reginald D Hunter following soon afterwards. So it was with some trepidation last week that Loan Ranger witnessed a re-opening of that old can of worms.

    • 19 Jan 2015
  • SNB’s wake-up call: central banks can shock

    Perhaps it was stimulus envy — years of taking a back seat in the popular mind to the central banks of the US, the European Union, Japan and the UK.

    • 15 Jan 2015
  • SSAs: nowhere to go as dollar and euro sour

    You have to pity sovereign, supranational and agency funding officials in Europe.

    • 15 Jan 2015
  • MTN Leak: Getting your Jaws into a pickle

    Just when the MTN market thought it was safe to go back in their inboxes, a very unsettling and scary email was waiting.

    • 15 Jan 2015
  • Dubai looks set to face challenging market in 2015

    Dubai World's announcement this week that it is closing in on another restructuring of its $14.6bn debt promise a big and timely kick of the can down the road for the emirate. But the overall picture for Dubai is deteriorating, structural problems remain and investors should strap themselves in for the bumpiest ride since the financial crisis.

    • 15 Jan 2015
  • Professional services join corporate finance fray

    Professional services firms will continue to beef up their corporate finance offerings in 2015, but that doesn’t mean they are looking to compete with investment banks, writes David Rothnie.

    • 15 Jan 2015
  • RQDII gives a vital exit route for China’s renminbi

    The renminbi has grown as an international trade, investment and reserve currency at breakneck speed over the past few years. But in many eyes, the very programmes set up to loosen capital account restrictions are now working against very purpose of creating offshore RMB liquidity – key to the currency’s internationalisation. A couple of developments this year may help.

    • 15 Jan 2015
  • Hang in there, you are there... almost

    How time flies. I was sipping a scotch the other night on the terrace at Sevva and looking around to see who I could spot. There is usually some cohort of bankers yammering about their lack of sleep, their rivals and each other, but there was barely a soul to be seen.

    • 15 Jan 2015
  • 1MDB IPO: A chance to get it right

    Just when it looked like state-backed 1MDB was finally ready to put its energy assets on the market for Malaysia’s biggest IPO in years, the listing has come up against another delay. That hardly inspires confidence in the sovereign wealth fund. But with a new president in place, there is now a chance to set things straight — not only for the country’s capital markets but also for the sovereign itself.

    • 15 Jan 2015
  • Food for Thoughts: Hawksmoor Guildhall with Martin Scheck, chief executive officer, International Capital Market Association

    The week Martin Scheck and I met had not been a good one for capital markets. Newspapers were full of the chatroom banter of FX traders. If the consequences for the reputation of the City and the perception of OTC markets in general in the wake of the Libor scandal had not been so serious, these revelations, full of music hall mockney, would have been laughable. Sadly for these latter day Artful Dodgers, regulators around the world had been, “reviewing the situation”.

    • 15 Jan 2015
  • MiFID: Why not just stop?

    Why is a piece of regulation which nobody wants, which the massed sovereign debt offices of Europe oppose, and which the regulator itself admits will barely work pushing remorselessly ahead?

    • 13 Jan 2015
  • Dubai investors should get set for challenging 2015

    Dubai World's announcement this week that it is closing in on another restructuring of its $14.6bn debt promise a big and timely kick of the can down the road for the emirate. But the overall picture for Dubai is deteriorating, structural problems remain and investors should strap themselves in for the bumpiest ride since the financial crisis.

    • 13 Jan 2015
  • Santander’s block trade opens new avenue in capital raising

    Santander raised €7.5bn of new equity capital last week — an important deal under any circumstances. But most significantly, the deal was done as an accelerated bookbuild or block trade — something that had never been attempted on this scale outside the US. Equity bankers were impressed — and other issuers will be emboldened by Santander’s example.

    • 13 Jan 2015
  • Let Ukraine default

    Ukraine needs to restructure its hard currency sovereign debt, and it needs to do it now.

    • 13 Jan 2015
  • CEEMEA is still too optimistic and not opportunistic enough

    CEEMEA sovereigns have not paid attention in class. The lesson EM issuers should have learned, especially in 2014, is that the future, even the near future, is unpredictable. Several CEEMEA sovereigns having announced deals early this year, but the great majority have chosen to wait until after the ECJ’s decision on Wednesday about the legalities of sovereign quantitative easing. They should have funded while the going was good.

    • 13 Jan 2015
  • Time for Asia to jump on the green bond-wagon

    Green bond sceptics have so far been proved right in their dire predictions for the take-up of this type of funding in Asia. But some important initiatives, combined with growing investor interest, mean that 2015 will be the year when Asia finally gets to grips with the green bond movement.

    • 13 Jan 2015
  • Loan Ranger: Wear your jumper with pride

    Last week was not a good one for humour, but one that began nonetheless with the customary jokes on Monday morning about how 2015 has already ruined the Christmas buzz – be it through unsettled markets or just the piles of admin ready and waiting for everyone’s return.

    • 12 Jan 2015
  • Asian IPOs go binary

    2014 has come and gone, with a fairly honourable tally for Asia’s busy ECM desks. According to Dealogic, last year's ECM volume on Asia ex-Japan exchanges, and excluding China’s A-share markets, was just under $135bn, more than in each of 2013 and 2012. That good news, however, is worth viewing in the context of a few less positive facts, writes Philippe Espinasse.

    • 09 Jan 2015
  • Taiwan needs more deregulation if it wants to be a real RMB hub

    As the first overseas renminbi hub outside Hong Kong, there were high hopes for Taiwan when it got its official RMB clearing bank in December 2012. But although its local RMB market has gained ground through its RMB deposit base and the expansion of the Formosa bond sector, Taiwan is falling behind as attention spreads to the emerging hubs elsewhere. More regulatory hurdles need to be removed for RMB internationalisation to take off in 2015.

    • 09 Jan 2015
  • New Year calls for a new perspective in bonds

    The European FIG market got off on the right foot this week, with issuers learning from mistakes made toward the end of 2014 and offering larger premiums to cash-rich and yield-strapped investors that want to put their money to work before yield targets get even harder to hit responsibly.

    • 08 Jan 2015
  • MTN Leak: Risky Business

    Being the first full working week of the year myriad throbbing heads and bulging waistlines have marked the start of 2015.

    • 08 Jan 2015
  • We stand with Charlie

    Late on Wednesday morning, masked men with guns stormed an editorial meeting at the Paris office of Charlie Hebdo, the French satirical paper, killing 12. That was four hours before GlobalCapital held its own weekly editorial meeting. We had never been so keenly aware of our luck: to be able to do our jobs freely and debate openly, without having to fear for our safety.

    • 08 Jan 2015
  • Barclays faces crunch year for IB changes

    After Barclays overhauled its investment bank last year, it must prove it can deliver its strategy in 2015, writes David Rothnie.

    • 08 Jan 2015
  • New year, no deals? No need to stress

    If one of my recent visits to the American Club is anything to go by, young bankers are just so het up about everything these days.

    • 08 Jan 2015
  • It’s time to look for toppy trades and EM contagion

    To some credit traders it has been known affectionately as the most hated rally in history, but the inexorable rise of financial assets in the aftermath of the credit crunch has recently hit an impasse – and 2015 has begun with successive days of weakness. Even if they are starting to feel discomfort, market participants should celebrate a timely health check.

    • 06 Jan 2015
  • Soft bullet exchanges must be more open

    On December 30, when most investors were on holiday, Credit Suisse changed the terms of its existing covered bonds from a hard to a soft bullet maturity with the approval of just a few investors. Other issuers looking to change the terms of existing deals should be more upfront about liability management exercises that could put investors at a disadvantage.

    • 06 Jan 2015
  • Capital rules for securitizations: Basel giveth and Basel taketh away

    Mention “Basel capital charges” to someone in the securitization business and prepare for a shudder — the industry has had to swallow new rules every year for three years, and costs could still cripple the market. But help could be at hand from another set of Basel rules.

    • 06 Jan 2015
  • Time for Asian HY issuers to ride route 144A

    It has barely started, but the new year is already gearing up to be a challenging one for Asian high yield corporates thanks to a high profile default by China’s Kaisa Group Holding and the looming prospect of rate rises. With local markets looking tougher, it’s time for issuers to start broadening their investor base and consider 144A deals.

    • 06 Jan 2015