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Taiwan's Securities And Futures Commission is preparing to open an equity-linked note market next year in a step to further expand the onshore derivatives market. "This is a huge positive," said Justin Kennedy, managing director of Asia Pacific equity derivatives at Salomon Smith Barney in Hong Kong. Wang Hung Rui, an official at the SFC in Taipei, said the regulator will permit equity-linked notes as well as warrants on stocks listed on the GreTai Securities Market by April.

The price of credit protection has started to widen again now that the synthetic collateralized debt obligation pipeline has dried up. Credit spreads have been tightening for the past month, but traders are now saying spreads are too tight and they are snapping up protection. Separately negative credit news is also leading to widening spreads.

During September European equity indices rallied by between 5%, (the FTSE 100) and 14%, (the Dow Jones Euro STOXX) and over the same period three-month at-the-money index implied volatility fell by around 9% to 10%.

Everyone likes Star Kist, but buysiders were groaning after a mammoth two-and-a half- hour conference call explaining the Del Monte acquisition and debt plans. "It was tough," said one buysider.

Kevin Dachille, portfolio manager at Mercantile Capital Advisors, will swap 5% of the firm's portfolio or $7 million, from mortgage-backed securities into corporates when the yield curve begins to flatten. The trigger for the move will be when the spread between the two-year Treasury and the 30-year long bond tightens to 50 basis points. Last Monday, the spread stood at 300. The flattening indicate speeds which is not a favorable environment for MBS performance, he says. In this flatter yield curve context corporates should outperform MBS.

This chart, provided by Citibank/Salomon Smith Barney Inc., tracks bid-ask prices for par credit facilities that trade in the secondary market. It also tracks facility amounts, ratings, pricing and maturities.

Société Générale Asset Management will sell the rest of the conventional bonds in its £500 million fixed-income portfolio, and buy index-linked paper. Paul Rayner, head of U.K. bonds in London, says, increased government and corporate issuance in general, especially on the long-end, will put pressure on yields. Rayner foresees inflation creeping up, which will prompt him to sell conventional gilts and buy index-linked gilts--both corporate and government. He expects to make the move next year. Currently, SGAM allocates 90% of its portfolio to government and index-linked bonds and the balance to corporate credit.

Piedmont Capital Management is seeking to capture gains in its Household International 6.5% notes of '06 and 6.47% notes of '08. The bonds rallied from 92 to par after HSBC Holdings reached an agreement to purchase Household. Piedmont owns just under $1 million of Household bonds, and will sell them if it receives a bid of 100.5 or 101, says Walter Campbell, portfolio manager of $100 million in taxable fixed-income.

The phenomenal growth of the CDO market has lead to new structures, with investors moving away from the initial black box CDOs toward transparent ones, initially static and most recently dynamic, with substitution or a manager. This article addresses some of the more recent developments in the sector and the analytical challenges they present. Although we are aware there are a lot more issues that need to be reviewed by investors in every individual situation, space restraints have meant we have focused on the most important areas.

Nicolas Kello, managing director and head of investor coverage at JPMorgan in New York, has left the firm, marking one of the most high profile departures of recent weeks. Reasons for the move could not be determined by press time and Kello could not be contacted. Adam Castellini, spokesman in New York, confirmed the departure, declining further comment.

Monty Agarwal, Asian head of interest rate derivatives trading at BNP Paribas in Singapore, has resigned. Reasons for his departure could not be determined by press time but officials at the firm said T.S. Cheah, managing director and Asian head of derivatives and structured products in Hong Kong, has assumed responsibilities for the desk. Cheah did not return messages. Agarwal reported to Frédéric Janbon, senior managing director and global head of interest rates in London. Janbon declined all comment.

Bear Stearns has hired Shinichi Kaneko, equity derivatives marketer at Mizuho Securities in Tokyo, in a new role as an equity derivatives product specialist in Tokyo. Bear Stearns has been building up its Tokyo equity desk under Kin Sang Cheung, senior managing director and head of equity derivatives trading in Tokyo, who joined earlier this summer from Lehman Brothers to lead the effort (DW, 7/7). "I have a mandate to build up this business," said Cheung. He declined to comment on additional hiring plans. Kaneko was traveling and could not be reached.