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HSBC has hired Thomas Poh, interest rate derivatives trader at ING Financial Markets in Singapore, for its Hong Kong hub in a similar role. Poh reports to Samuel Koh, head of Asian domestic derivatives trading in Hong Kong. "We needed more hands on deck for product development and market coverage," said Koh, noting that Poh will help boost the bank's interest rate trading book for the Philippines and Indonesia. In recent months HSBC also added a senior derivatives dealer from Citigroup for regional currency derivatives trading in Hong Kong (DW, 9/28).

Two former giants of the investment banking community pointed out that finance professionals are not looking for a genuine solution to the woes accounting changes are throwing up but are looking for a way to profit. "Most people here, accountants, lawyers and bankers, are trying to work out how they can make money out of this problem rather than what the solution is," said Jonathan Laredo, founder of Solent Capital Management and former head of structured finance for Europe and Asia at JPMorgan in London.

The International Accounting Standards Board plans to review the rules governing recognition and consolidation of special purpose entities. The treatment of SPEs is fundamental to the collateralized debt obligation and the wider credit derivatives arena, as can be seen by the current furor in the U.S. over FIN 46, an accounting rule that puts many SPEs onto fund managers' and banks' balance sheets. The process of removing assets and liabilities from a balance sheet is known as de-recognition.

ING Financial Markets is getting ready to move its Hong Kong-based fixed income trading, structuring and research operation to Singapore early next year. "We're centralizing all financial markets businesses in one hub," said Sheel Kohli, spokesman in Hong Kong, adding, "This makes sense from a business efficiency point of view."

"Most people here, accountants, lawyers and bankers, are trying to work out how they can make money out of this problem rather than what the solution is."--Jonathan Laredo, founder of Solent Capital Management and former head of structured finance for Europe and Asia at JPMorgan in London, commenting on derivatives professionals' reaction to the introduction of International Accounting Standards. For complete story, click here.

Korean non-life insurance firms have decided to make first their forays into global collateralised debt obligations next year. Officials at the KRW2 trillion (USD1.6 billion) Oriental Marine and Fire Insurance and the USD900 million Shindongah Fire and Marine Insurance, said they aim to get a higher return by diversifying into CDOs because yields from Korean bonds are too low.

Companies have been spared the need to publish comparable accounts for derivatives when the new rules go live in 2005, but conference delegates did not think the market would be so lenient. IASB dropped the need for comparable accounts because companies' systems were not ready, explained Peter Clark, senior project manager at IASB in London.

Korea's Financial Supervisory Service has issued a warning to BNP Paribas in Seoul for charging above market pricing on an interest rate swap with a Korean counterparty. The investigation centered on a swap BNP entered last month with Shinhan Card Co. on the back of a EUR300 million (USD352 million) asset-backed security the Korean credit card company issued, for which BNP was also the underwriter. Choi Sung-Ho, spokesman at Shinhan Financial, said the firm was unaware of any warning by the FSS to BNP, declining further comment.

This article examines why structured finance CDOs are attractive and the structural features of the instruments. Next week's article will look at collateral and ratings.

Namaste Capital Management anticipates entering equity derivatives to risk manage its Namaste Fund, a long/short equity fund scheduled to be launched in January. Rui Matos, portfolio manager in Los Angeles, said the firm will buy puts and sell covered calls on both individual positions and indices in order to hedge the portfolio. Individual trades might stand as large as USD400,000 notional, while total derivatives contracts may represent around 50% of total assets under management, he said.

-- Lawrence Yarberry, Pacer International's executive v.p. and cfo, on the repricing of its bank debt by Deutsche Bank.

An early Christmas gift request from the buyside... "What we really need is a bankruptcy, or a company to get into real trouble," said one loan manager, looking for some of the repricing pressure to ease.