Comment - All Articles

  • Irish housing market is no poster child

    Ireland won kudos for the swift economic recovery that followed the sovereign debt crisis, but with a considerable portion of residential mortgage loans overdue or restructured, its housing market was in a terrible state even before the impact of Covid lockdowns, let alone the peril a disorderly Brexit may bring.

    • 29 Sep 2020
  • Korea’s equity boom: it’s now or never

    South Korea is in the middle of an equity bubble. Investors are piling in at a rate not seen in the past decade, pushing stock valuations in secondary and primary markets far above realistic levels. Companies should make the most of this opportunity – it won’t last.

    • 29 Sep 2020
  • I've been thinking about EU all of a sudden

    We all know, or at least Notebook has been led to believe, that once someone obtains money, fame or power, suddenly all sorts of people come out of the woodwork looking to be their friend.

    • 28 Sep 2020
  • EU rundown, US meltdown, climate lockdown

    This week in Keeping Tabs: what explains the relative performance of different EU countries and what does this mean for fiscal and monetary policy; why you should brace for US election chaos; and how to harness finance for green purposes.

    • 25 Sep 2020
  • Central banks are on the path to prioritising green assets

    The European Central Bank's decision to embrace sustainability-linked bonds (SLBs) as collateral and for its asset purchase programme is a sign of what is to come.

    • 24 Sep 2020
  • Stop hand-wringing about the sovereign doom loop

    The coronavirus pandemic has sparked an unprecedented wave of sovereign borrowing. Much of the paper has, unsurprisingly, ended up on the balance sheets of domestic banks. This has, equally unsurprisingly, prompted a fresh round of worry about the strengthening of the sovereign-bank nexus.

    • 24 Sep 2020
  • US big beasts dominate UK broking with different styles

    JP Morgan and Morgan Stanley’s positions at the top of the UK corporate broking rankings have undoubtedly helped their equity capital markets businesses, but Goldman Sachs stands out for its disruptive approach, writes David Rothnie.

    • 24 Sep 2020
  • Radical transparency in the woods

    When you go down to the woods today, you’ll be in for a big surprise — hedge fund managers.

    • 24 Sep 2020
  • Sustainability-linked bonds: I should Coco

    The recent high profile spurt of sustainability-linked bonds, including deals from Brazil’s Suzano, Switzerland’s Novartis and, coming this week, France’s Chanel, is a sharp change, after this structure — where the coupons are linked to sustainability performance targets — has made a surprisingly quiet and disappointing start to life.

    • 22 Sep 2020
  • ECB risks disturbing nest of German legal vipers

    The European Central Bank is reportedly considering imbuing its regular Asset Purchase Programme with the powers reserved for its special Pandemic Emergency Purchase Programme. From the central bank's perspective it’s a tempting move, but it could tip the eurozone into full blown yield curve control and would certainly draw the ire and no doubt legal challenges from some in Germany.

    • 22 Sep 2020
  • Covid-19 could hand more power to the ECB

    The European Central Bank (ECB) would gain more autonomy under new proposals on how to improve bank capital rules.

    • 22 Sep 2020
  • UK government virus switcheroo risks City's long-term health

    The UK government’s sudden volte face this week about working from home may slow coronavirus infections but it betrayed a fundamental lack of strategic thinking and stability over the most pressing concerns. That should worry the City, which is in a fight for its future as a leading financial centre, as a result of Brexit.

    • 22 Sep 2020
  • ESNs can help the ECB exit QE

    If the European Central Bank (ECB) is serious about eventually scaling back its quantitative easing programme and encouraging a return to normal market funding, it will need all tools at its disposal. That suggests there is scope for an instrument that delivers a low cost of funding and supports the European economy. European Secured Notes (ESNs), which are likely to form part of the European Commission’s capital markets action plan, which is to be unveiled this Thursday, could provide the answer.

    • 22 Sep 2020
  • Taiwanese banks should hold their ground on loan pricing

    Formosa Plastics Corp is preparing to set a new pricing benchmark with its planned $2bn loan, which bankers reckon could set a record low for a borrower from Taiwan. If the company succeeds, this could set a dangerous precedent for the long-term health of Asia’s loan syndication market.

    • 22 Sep 2020
  • Covid known unknowns, ESG vs. S&P, Suganomics

    This week in Keeping Tabs: what scientists still don't know about coronavirus as we grapple with a second wave, ESG index funds outperformed in the first half of the year, and Japan's currency challenge.

    • 18 Sep 2020
  • Stripy bond market will offer no camouflage

    The green bond market was conceived on a simple plan. A new class of green bonds would finance environmental projects, standing out from the grey mass of ordinary bonds.

    • 17 Sep 2020
  • UK issuers: a lesson in pessimism

    Recent Brexit developments prove that UK banks were right to pile into the market earlier this year.

    • 17 Sep 2020
  • RBC looks for another lift after 10 year build

    RBC Capital Markets’ expansion in European investment banking came in the aftermath of the global financial crisis. A decade on, the coronavirus pandemic has presented it with a very different set of challenges.

    • 17 Sep 2020
  • Banks training descends to new lows

    Bankers are famous gossips. They like nothing more than talking about the revolving door of job moves in the industry, the embarrassing slip-ups rivals have made with clients or the scandals that can result when alcohol and the capital markets collide. But although the rumour mill ensures bankers know plenty about other firms, they don’t always know what’s going on at their own.

    • 17 Sep 2020
  • Goodwill towards bank M&A has misrepresented badwill

    An accounting practice called badwill is central to debates about European bank M&A — but it probably should not be, as it leads to some confusing rhetoric.

    • 16 Sep 2020
  • The covered bond paradox: the best and worst of times

    Surging covered bond issuance that is printed only for repo at the central bank and official sector purchases means that the asset class is now less relevant for market funding purposes than ever before. If this continues, the systemic importance of the €2.7tr global market will be undermined just as efforts to develop it look to bear fruit.

    • 15 Sep 2020
  • UK’s hand is weak against acquisitive foreigner bidders

    In just a few days, two of the UK’s largest companies have had acquisition offers made for them by North American rivals. Heading into the 11th hour of a still chaotic Brexit process amid the highest national redundancy levels since the global financial crisis will have more foreign buyers circling yet.

    • 15 Sep 2020
  • BOC lays blue foundation; now others should follow

    Bank of China has opened a new area of sustainable investing with Asia’s first blue bond. The excitement over the potential for sustainable ocean-related financing in the region is justified — but the market should temper its expectations.

    • 15 Sep 2020
  • Rule of law, the new face of the CMU and fighting deflation

    This week in Keeping Tabs: the state of EU capital markets and whether good government matters, a profile of Mairead McGuinness, and Adam Tooze on central banks.

    • 11 Sep 2020
  • Prepare for interventionism in capital markets

    European policymakers may decide to ramp up efforts to retain control of capital markets, amid rising Brexit tensions, the US-China dispute and the need to recover economic growth.

    • 10 Sep 2020
  • ECB corporate bond buying has become gratuitous

    The European Central Bank’s bond buying is doing bizarre things to corporate spreads that saw an airline reprice its curve this week in the midst of a once-in-a-lifetime crisis for the aviation industry. With a market this broken, it’s time for the central bank to see where its money can be put to better use.

    • 10 Sep 2020
  • Deutsche IB head ‘vindicated’ as ECM mandates continue

    A year on from the closure of its flow equity trading business, Deutsche Bank’s investment bank is back in a bullish mood after performing well during the first stage of the coronavirus crisis.

    • 10 Sep 2020
  • A banker’s summer scarlet letter

    It can occasionally be tempting for a young banker to pull a sickie to spend a day with friends. But sick days are best spent under the cover of darkness — not in the searing sun.

    • 10 Sep 2020
  • EU could give sustainable bond market the biggest boost

    The European Union is about to kick-start its huge borrowing programme for the Support to Mitigate Unemployment Risks in an Emergency (SURE) fund later this month. It is expected to bolt on additional financing needs for its recovery fund too, once that has been ratified. That could mean up to €100bn of new supply by the end of next year. Printing that as sustainability bonds will give that market the best fillip it could wish for. The EU must seize this opportunity given its commitment to the cause.

    • 08 Sep 2020
  • Fear of the FAANGs

    Equity investors should be nervous about US tech valuations as the fabled FAANG (named for Facebook, Amazon, Apple, Netflix and Google) stocks look extremely expensive after reaping in the cash during the equity rally that followed the initial Covid-19 sell-off. With valuations at near-preposterous levels and the macro-economic environment worsening with rising Covid-19 cases and a bitter election around the corner, market moves down last week could be a sign of worrying times ahead.

    • 08 Sep 2020
  • Asia’s answer to green bond push lies in China property

    Green dollar bonds from Chinese high yield real estate developers are rare, but property companies have the potential to push the green market in the region to the next level — and see some pricing benefits in the process.

    • 08 Sep 2020
  • Paying cross-border, pitching monetary rocket fuel, picking tech winners

    This week in Keeping Tabs: a start-up’s plans to change correspondent banking; an argument for dual interest rates; state aid after Brexit; and etiquette in the coronavirus age.

    • 04 Sep 2020
  • Golden issuance window could be a phoney war

    September began with a bang for equity issuance, capped off on Wednesday by a mammoth €2.7bn share sale from Siemens Healthineers. However, the rush of deals is not just being driven by optimism. Bankers fear darker days returning.

    • 03 Sep 2020
  • HSBC wants to take mid-market push beyond UK

    HSBC might be in the middle of a big restructuring, but that isn’t stopping plans to develop mid-market M&A efforts in France, Germany and Asia as well as the UK, writes David Rothnie. The bank has also bolstered its teams covering specific sectors.

    • 03 Sep 2020
  • Japan after Abe: no reason for panic

    Shinzo Abe, Japan’s prime minister, who has decided to retire, will be missed by many bankers.

    • 03 Sep 2020
  • Sovereigns and sustainability: a natural fit

    Luxembourg became the first European sovereign to publish a sustainability bond framework this week, breaking the pattern, to which Germany became a notable addition on Wednesday, of governments printing green deals. But sustainability bonds make much more sense for countries large and small.

    • 02 Sep 2020
  • UK retail is injured but it has ripped off the plaster

    The coronavirus has been seen in some quarters as the final nail in the coffin for the long suffering UK retail sector. But having embraced e-commerce earlier than elsewhere, the sector may learn lessons from the crisis faster and emerge stronger, which means UK CMBS holders might not be in as bad a spot as they imagine.

    • 01 Sep 2020
  • It’ll take more than sandwich sales to get the City thriving again

    City workers used to go to ubiquitous sandwich chain Pret A Manger because it was close to the office. Now, the UK government wants us to go to our offices because they’re near a Pret. Yes, the City’s retail and commercial property economies are in trouble, but cajoling people back to the office is not the answer.

    • 01 Sep 2020
  • Singapore: a case study for Libor transition

    Singapore has been a front-runner when it comes to moving away from Libor to a new benchmark, with its regulators, borrowers and banks playing an active role in preparing the market. The rest of Asia’s loan market should pay attention.

    • 01 Sep 2020