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Nelson Capital Management is seeking to increase its duration via the purchase of longer maturity corporate bonds, on the view that the already-steep curve is likely to flatten, says portfolio manager Melissa Parker. Parker also notes that another reason for the move is to reach neutrality with the Lehman Brothers Inter Government credit index, as the firm is currently slightly short its benchmark. She plans to execute the shift by moving long the curve from a current five- to seven-year average maturity range to a 10-year range.

The market pounding telecom companies have taken over the past two weeks conjured up some not so fond memories. One dealer recalled the stock market crash of 1987 and looking out of his Boston office and into the 35th floor of the Fidelity Investments building in Boston. "It was a very sobering day," he said. "I could see people lining up to redeem their mutual funds." Another just remembers being in the office and swearing a lot.

Bear Stearns has hired Morad Maloujhi, former head of European fixed income derivatives sales at NatWest in London, in the new position of senior managing director and head of fixed income derivatives marketing for Europe. Gerome Camblain, senior managing director, head of sales for fixed income and derivatives for Europe at Bear Stearns in London, said Maloujhi will be responsible for leveraging generalist marketers and building a group to target European financial institutions. Since leaving NatWest in 1999 Maloujhi has been working at an Internet venture. Maloujhi, who will report to Camblain, joins the firm on July 2.

Mike Reeber, global head of convertible bonds at Deutsche Bank in New York, is moving to Tokyo to become head of Asian equity derivatives. Rick Goldsmith, global co-head of equity derivatives in New York, said the move follows the departure of Masatoshi Inoue, who quit the world of banking to work for a software company in Seattle (DW, 4/23). Reeber will report to Goldsmith and Ralph Reynolds, global co-head of equity derivatives. Reeber and Reynolds were traveling and could not be reached. Nick Niell, head of international convertibles, will replace Reeber as global head of convertible bonds, according to a spokeswoman. Niell could not be reached.

Scan a 10-Q filing and the words "derivatives" and "losses" tend to jump off the page and resonate in investors' minds in a way that the term "unrealized loss" does not, as General Electric discovered recently. GE's stock fell some 10% over the last 10 days of May in a move that some institutional investors say is attributable to the corporate having to disclose the fair value of derivatives on its balance sheet, in accordance with the Financial Accounting Standards Board's accounting rule 133. For most corporates this is the first calendar year in which they must report derivatives positions under FAS 133.

Dresdner Kleinwort Wasserstein has hired Mark Mallia, principal-fixed income at Morgan Stanley, as managing director and head of credit trading, Japan and non-Japan Asia in Tokyo. Yukiko Omura, managing director, head of global markets, Japan at Dresdner in Tokyo, said the firm plans additional hires. Dresdner started building up its credit derivatives operation earlier this year (DW, 2/18). Mallia, who joins Dresdner today, could not be reached for comment.

Goldman Sachs in Tokyo has landed Jackson Chou, a credit derivatives trader who recently left Morgan Stanley in Tokyo (DW, 6/11). Chou started at Goldman last week, covering non-Japan Asian credit derivatives at Goldman. He reports to Can Uran, executive director, global credit derivatives. Uran was traveling last week and could not be reached for comment.

Banca d'Intermediazione Mobiliare is considering setting up a credit derivatives operation which likely will start trading in "the near future," according to Elizabeth Tot, head of relative value trading in Milan. The bank is looking at trading European investment grade credit default swaps on both a proprietary and customer basis, she said, declining to outline what factors will determine whether it goes ahead. She added that narrowing bid/offer spreads resulting from improved liquidity have prompted the bank to consider entering the burgeoning market. Tot declined further comment.

Manulife Indonesia and HSBC recently gave a presentation on the benefits of using interest-rate swaps to the Ministry of Finance. Chris Bendl, managing director, investment and pension services at Manulife in Jakarta, said the company has been looking to tap the swaps market for some time to hedge its investment portfolio (DW, 6/19/00). He described the presentation as well received. Officials at the MoF and HSBC in Jakarta and could not be reached for comment.

Icelandic power company Landsvirkjun is considering raising USD70 million via an emerging market currency-denominated medium-term note issue before year-end and likely would use currency derivatives to convert the proceeds into euros. Stefan Petursson, treasurer in Reykjavik, said the company is waiting for banks to come up with the right structure before it pulls the trigger. It would consider issuing in Hungarian forints, Czech korunas or Hong Kong dollars to achieve a better funding rate. "There is nothing that we would not look at," he added.