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GC Asia
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Jefferies mulls end of expansion as European corporate finance faces test
The US firm has been on a trajectory of almost constant growth since the financial crisis. Now it is clipping its wings in fixed income and looking to capitalise on its strengths in European investment banking, writes David Rothnie.
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US corporate bonds: go big or go home
The US corporate bond market has once again proved it is the deepest, most mature and most reliable in the world.
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MTN Leak: Duvet day
Monday February 1 is National Pull a Sickie Day, the day which traditionally sees the highest number of workers call in sick.
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Making a song and dance about it
If my friends who work at international banks think their jobs are too demanding, they should have a look at some of the stunts those working at their Asian counterparts are expected to pull.
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You’re only supposed to bail the bloody bonds in
Italian non-performing loan securitizations will now come with a government guarantee, after months of negotiations between the state and the European Commission resulted in a rather rosy outcome for the country’s banks this week.
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No more covered bond snobbery about pass throughs
Established covered bond investors are often sceptical about conditional pass through deals. The structure allows the maturity of their investments to be extended, perhaps by decades. But they could be safer than long dated bullet deals.
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Technicals are keeping derivative markets docile
Markets are underpricing volatility, in stark contrast to 2015. As the underlying stock and bond markets gyrate, options markets show a strange tranquility. The market is better hedged than last year, but a flood of funds is suppressing fear signals.
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Monte dei Paschi’s patriotic mystery
As Monte dei Paschi di Siena’s shares gyrated last week, losing up to 34% of their value, the bank received a high honour, for a second year running — top primary dealer for Italian sovereign bonds.
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Chinese property: Getting to grips with the unexpected
The Chinese property sector has once again found itself in the headlines for the wrong reasons with Future Land Development Holdings saying on Friday that its chairman was being investigated by the authorities. While there was the inevitable bout of panic selling, the short time it took for things to stabilise shows a maturing market that is fast getting used to the complexities of the industry.
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Loan Ranger: Should I stay or should I go?
The loan market has undergone a changing of the guard with the departure of several loan market stalwarts — and loan market bodies the LMA and LMSF have some changes to boot.
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From Russia, with fees
After almost five years, Hong Kong has recognised Russia as an accepted jurisdiction for issuers looking to list in the city. But whether the ties would be a game-changer for Asian equity capital markets is a big question, writes Philippe Espinasse.
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P&M Notebook: Staley stamps his mark
Barclays, oh Barclays. GlobalCapital can’t help wonder about the disconnect between how shareholders see banks, and how their employees see them. Round after round of cuts, each one loved by the market, but ever more corrosive to staff morale.
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Banks can still grow fat on Chinese
While China’s impact on equity markets may have been catastrophic of late, not everything coming out of China is bad news. China’s appetite for gobbling up European firms is high, which should give Europe's debt bankers reason to cheer, despite the market misery.
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Europe’s embarrassing corporate bond drought
Talk about dry January. It hasn’t been the fizzy start to the year that European capital markets specialists were hoping for.
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The icing on the awards cake
The sweetest part of the awards season is not the moment when you get to pick up the trophy but the chance to get well oiled at the party, while someone else picks up the tab.
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JP Morgan guards against complacency with reshuffle
JP Morgan has unveiled the team it wants to repeat its table-topping success in European corporate finance, following three years of hard graft, writes David Rothnie
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MTN Leak: Monkeying around
The year’s social calendar is starting to fill up with plenty of exciting events to distract us from the terrible markets.
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Old Money: UK banks finally losing concentration?
Britain's banking market is a frenzy of new arrivals and challengers to the old order. The Bank of England even set up a New Banks Unit this week to welcome them all. But for most of history, the trend has run in the opposite direction.
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International banks won't be flooding into Iran
Iran’s re-engagement with the global financial system after the lifting of US and EU nuclear-related sanctions at the weekend will have profound consequences, but this is no “eureka” moment for its relationship with international banks.
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Hungry eyes: Chinese M&A feeds European loans
As Chinese companies go on an M&A shopping trip in Europe in 2016, the European loan market will benefit from the China’s spending spree.
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Breaking up the banks by the back door
The Basel Committee’s new trading book rules don’t force banks to split into subsidiaries or to ringfence capital. But they will still revolutionise how investment banks run their trading businesses.
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An Aramco IPO could spark a foreign investment surge
Ever since it emerged that Saudi Aramco was considering a public listing, equity capital market specialists have been trembling at the potential for the largest IPO in history. Such a deal could also transform the Saudi exchange, finally bringing a rush of foreign investment into the country’s stocks.
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Italian chaos raises questions for regulators
The ECB can’t risk large disruptions in the European capital markets it is trying to support, nor paranoid doom spirals in the banks it supervises. So it needs care when and how it communicates with the market.
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South Korea ECM: Block the public’s view
Doosan Group exited from Korea Aerospace Industries this month via a block, which in a move away from traditional sell-downs in Asia, was executed as a private placement. Privately placed blocks appear to be emerging as a new solution for deals during tough times — and it’s an approach that other South Korean vendors should replicate.
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Loan Ranger: Rock stars and cabaret
This week GlobalCapital honours rock stars and loans heads with a rock 'n' roll special.
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P&M Notebook: Beware of regulators bearing gifts
The Basel Committee delivered a fantastic New Year’s result for the big trading banks — an increase of only 40% in trading book capital requirements. It sounds punishing, but really, it marks a big climbdown from the Committee.
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AB InBev: deals speak louder than words
This was the supposed to be the week of the bears. Research analysts warned of economic doom, declaring that the savage sell-offs of the new year were just a foretaste of carnage to come.
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It’s time to end the age of the central bank
Central banks have become arguably the most important institutions in the world. With the autonomy to act with a resolve governments rarely match, it’s no wonder politicians have pinned so much hope on them. But elected leaders must take the reins back.
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Gorman’s long game costs Fleming top spot
The abrupt departure of Greg Fleming shows Morgan Stanley’s top boss is delivering on his promise to make nurturing the next generation of leaders a defining aspect of his regime, writes David Rothnie
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Aramco IPO: ECM world must hope the Saudis move swiftly
Equity capital market banks will love an IPO of Saudi Aramco, or parts of it, if one happens. But getting there is going to be arduous and could disrupt other business this year. The best thing for the market would be a quick and clear-cut process. Sadly, bankers say that is unlikely.
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MTN Leak: An abstinent New Year
Now that we’re two weeks into 2016, the majority of New Year’s resolutions are already distant memories, but David Morland has a stronger will than most.
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Sub-sovereigns are suffering because of Draghi’s dithering
European Central Bank needs to give Europe's regions clarity on whether it will buy their bonds. Delaying the decision costs the central bank credibility, leaves the regions in a damaging limbo and hurts issuers that tend to print private deals.
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Southeast should step out of China’s shadow
January kicked off with China front and centre as the upheaval in its stock market caused indices across the globe to tumble. South and southeast Asia did not escape unscathed but the chances are that when markets stabilise, investors will be eager for equity issuance from the region.
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Some bankers are just destined to get the boot
While nursing a whiskey at the China Club this week, I couldn’t help but notice a group of bankers crowded around some tables in the corner. While they typically wouldn’t catch my eye, what drew my attention was that they all had a tipple in their hands but seemed too busy muttering expletives to drink anything.
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No Turkish delights for 2016
Many loans bankers focused on Central and Eastern Europe have pinned their hopes on Turkey as a source for deal flow this year, as Russia remains thwarted, but it will not bring the hidden treasures bankers expect.
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ISDA overhaul is grounds for dancing in the street
The International Swaps and Derivatives Association (ISDA) pledged to tighten up the standards that govern its Credit Derivatives Determinations Committee, a welcome move at a time when the committee’s role is evolving and it is assuming greater importance as a quasi-legal authority.
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Sub-sovereigns are suffering because of Draghi’s dithering
The European Central Bank needs to give Europe's regions clarity on whether it will buy their bonds. Delaying the decision costs the central bank credibility, leaves the regions in a damaging limbo, and hurts those issuers that tend to print private deals.
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Do not panic about Poland — but pay attention to premiums
Poland’s new euro denominated dual tranche bond slumped after pricing. But one bad bond should not put off other issuers. There are plenty of reasons why CEEMEA trades should work — if bankers do their part.
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P&M Notebook: Bond markets in the spotlight
The bond markets had it coming. It was naïve to hope that every corner of the Eurobond market, even in these compliance-heavy days, was a model of perfect probity. While there is money to be made, corners will be cut.
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Loan Ranger: New Year hangovers
While equity markets began 2016 with a head-banging hangover, some loan bankers suffered worse from the repercussions of their glut of food and alcohol over the year end.
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Lat Am issuers have nothing to gain by delaying funding
Latin American bond bankers are already down in the dumps about a bare January pipeline, and a tough first week of trading in global markets has done little to lighten their mood. But this should not make Lat Am borrowers hesitate once they are ready for market: conditions are unlikely to get better.
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A green bond that did what it said on the tin
The green bond wave is set to rise higher in 2016 but, as before, most of the deals will not help the environment much. One bond that did was sold in the closing days of 2015 — but such deals are still bought only by a small fraction of investors.
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Unhappy new year
If bankers had to put one thing on their Christmas lists it would have been a new year free of disruptions. But it looks like Santa Claus was paying attention to all those conduct fines. One week in and we’re off to a stinker.
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MTN Leak: January got your goat?
The year has scarcely begun and already the calendar is filling up with exciting events. Thorrablot, Íslandsbanki’s epic annual bash, is fast approaching.
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No more DoJing the bullet
Bond trading has never been a gentleman’s game exactly, but it has always seemed a more dignified pursuit than the Wild West of the money markets. So as the full scale of the Libor scandal lurched into view, the bond markets in EMEA managed to maintain composure.
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More of the same
I remember only too well the mad dash to sign deals before December to make our year-end numbers look good. So I understood when a banker friend turned down my offer for Christmas drinks, saying he was “snowed under with work”.
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The year of living dangerously
While all eyes are on China and turmoil in the mainland equity markets, our columnist turns his gaze to Indonesia where once again the government is attempting to privatise state-owned companies.
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Banks and the state: insufferable but inseparable
We entrust our precious working capital to banks; they finance our dreams and provide revolving credit to get us through our nightmares.
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European banks gear up for Fed’s split demands
The US is top of every European banking chief executive’s to-do list for 2016, as they race to comply with new regulations that will define the future of their international ambitions. Consolidation beckons, writes David Rothnie.
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BES: A nasty New Year’s resolution
The principle of pari-passu among bondholders lays dead and buried. The Bank of Portugal’s decision to select only five of Novo Banco’s 52 senior bonds for bail-in last week has established a new precedent for bank resolutions, and what a fine mess it has created.
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A green bond that really did what it said on the tin
The green bond wave is set to rise higher in 2016, but as before, most of the deals will not help the environment much. One bond that did was sold in the closing days of 2015 — but such deals are still bought only by a small fraction of investors.
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Volatility is here, but have no fear
Equity markets had an inauspicious start to 2016, as China triggered yet another global sell-off and a new circuit breaker only added to the volatility. Monday was officially the worst-ever start for Chinese shares, but market participants shouldn’t read too much into the turbulence.
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Lat Am issuers have nothing to gain by waiting
Latin American bond bankers are already complaining about a bare January pipeline, and a poor first day’s trading in global markets has even prevented several US issuers from getting their funding for the year going. But this should not make Lat Am borrowers hesitate once they are ready for market: conditions are unlikely to get better.
