The Pained Trader: no conferring

Trader contemplates hospitality, Saudi style.

  • By The Pained Trader
  • 18 Oct 2018
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Another shibboleth of stockbroking culture, the investment conference, looks set to go the way of the boozy lunch, the fat spread, corporate entertainment, trading floor Strip-o-grams, the typing pool and the fax machine. Salvation Bank is meant to be hosting one next month, at the same time as everyone else it seems, and enthusiasm from potential delegates and sponsors alike appears no more rabid than it does for attending Davos in the Desert, the big jamboree hosted next week by the publicly-flagellating, limb-severing, bone-sawing Saudis.

We haven’t suffered mass cancellations in protest against the lurid murder of a former employee but the reception to our event is compromised horribly by a deadly and unvaccinatable outbreak of MiFID. Clients, who have struggled understandably with accepting invitations to watch the rugby at Twickenham and dine at London’s best restaurants, are also finding it increasingly difficult to handle the pricing structures for corporate access which investment banks must foist on them by industry legislation.

We have clients who cannot accept sandwiches at lunch (although biscuits seem to have slipped under MiFID’s radar), who will only pay £20 for a one-on-one meeting or, if they accept our pricing bill of fare, can only see two companies rather than the five or six which they might have previously.

Offering corporate access to fund managers is seen as an inducement to trade, just like taking them fly-fishing or buying them a three-minute lap-dance in an Establishment Characterised By Moral Laxity but clearly, there’s no equivalence to be drawn. One of the unintended consequences of MiFID then, is that just when asset managers need to be closest to their shareholdings, expense considerations, miniscule in comparison to what is being staked in the portfolio, are acting as a deterrent. They’re more likely to go to the company website and read the glossy brochure for free now, and in the City, anything that comes with no price tag attached is worthless.

In the past, of course, portfolio managers would fly in from everywhere, demand their solo meetings with management as a droit de seigneur, get hammered at the closing gala dinner and then afterwards, simply bung a few orders your way to pay for the conference indirectly. Now though, that is a crime punishable by death at the hands of a Saudi sawyer and as a consequence the salesforce here at Salvation Bank is press-ganging into attendance anyone they can find. Rather than being grilled by the serried ranks of the City’s sharpest minds, FTSE 250 executives will now find a roomful of disinterested retail punters who are only here for the beer. How shoddy are our compromised arrangements.

Double pants

The Crown Prince of Saudi Arabia, Mohammed bin Salman, is known, among other things, as Abu Sirwaleen which I think translates as Double Underpants which suggests a) he wears two pairs in case of incontinence, b) a less than flattering judgment of his stewardship of the desert kingdom because just ‘pants’ is not enough, or c) (and most likely) underneath his robes the stolid mesomorph is sufficiently corpulent to suggest two men sharing the same bedsheet. Abu Sirwaleen can offer greater incentives to attendees for his big tent bash than we can because his resources are unlimited. Chances are then, despite some high profile stay-aways, most representatives of the global investment industry will show up to be pampered and showered with riyals because money talks and businessmen listen.

All the same, I’d be very circumspect about accepting notorious Saudi hospitality because as we have learned in the past week, they can badly botch intimate encounters on occasion and, as everyone knows, it’s difficult to hold up your end of the conversation if your interlocutor is bereft of a head. You can’t say you haven’t been warned when you look at the Saudi flag and there, beneath the Islamic creed is a sword.

Say what you like about the Saudis — and I frequently do — they get the job done. Unlike Russia’s hopelessly amateurish GRU which despatched Dolce and Gabbana to take out Sergei Skripal and ended up murdering the unfortunate girlfriend of a Salisbury charity bin dipper several months later, the Saudis supposedly sent a crack squad to Istanbul, reduced the assassination target to his component parts and within hours of the wet work were flying back to the desert kingdom. Done and dusted.

We think of Saudi Arabia as a backward regime, or at least I do. Well, it is, isn't it? The fundamental precept of Wahhabism is to live as Muhammad would have done in the seventh century but with some of the paraphernalia of the pluralistic, liberal west like swanky property, Italian cars, superyachts and well-resourced applicators of state-sanctioned violence.

It took the Russians weeks to come up with the storyline of two cathedral-loving, chionophobic tourists in Brokeback Salisbury but the Saudis are taking the time to ensure their version of what happened in the consular basement does not stretch credulity beyond breaking point. Anything involving Ali Baba and "open sesame" won’t cut the mustard.

The news out of Istanbul begs the question: what is the ideal soundtrack to listen to when dismembering someone? Wagner? Heavy metal? Or something light and poppy like Abba? Perhaps I Saw The Whole Of Your Moon by The Waterboys? Maybe I Saw Him Standing There by The Beatles? Nothing Can Tear Us Apart (except for this bone saw in my hand) Get back to me on that. 

I suppose it is easier performing an autopsy on someone as you are chopping them up alive because there's less guesswork involved.

My very first client back when I was a US junk bond salesman for Salomon Brothers in 1989 was a Saudi bank and naturally my maiden business lunch was with the junior PM, an Englishman, and his boss, a very suave Arab but strict Muslim. I took the liberty of ordering wine before they arrived and by way of a bizarre dumb show, the Englishman made it clear he would not be able to drink and I polished off the bottle of white Burgundy, again novel to me, on my own. 

I must have been inspired by the bottled sunshine and rendered more engaging as a consequence because in between dessert and coffee (again, I partook alone) they offered me a job as a fund manager for a US bond portfolio. Demonstrating an imbecility that came to characterise this so-called career I replied that I was too attached to sinful things (pointing at the drained glass) and could not possibly.

I have often thought back to this road not taken. It would have meant a career on the buy-side, three decades of fixed income and, most probably to my mind, greater wealth and success. Well, certainly not less wealth or less success in any case. Two roads diverged in a wood, and I, I took the one less traveled by, and that’s has made all the difference. Interpret that how you will.

  • By The Pained Trader
  • 18 Oct 2018

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 20 Apr 2019
1 JPMorgan 132,387.73 545 8.30%
2 Citi 123,981.47 487 7.78%
3 Bank of America Merrill Lynch 105,093.26 413 6.59%
4 Barclays 99,545.40 383 6.24%
5 HSBC 81,053.20 424 5.08%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Bank of America Merrill Lynch 11,525.35 30 7.25%
2 BNP Paribas 8,422.96 46 5.30%
3 UniCredit 8,389.55 43 5.28%
4 Deutsche Bank 8,298.69 30 5.22%
5 Commerzbank Group 7,837.68 40 4.93%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Morgan Stanley 4,425.28 19 11.23%
2 Goldman Sachs 4,006.06 15 10.16%
3 Citi 3,527.84 22 8.95%
4 JPMorgan 2,809.08 19 7.13%
5 UBS 2,241.39 12 5.69%