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Credit Suisse First Boston's Adam Sticpewich, managing director and global co-head of emerging markets credit derivatives, is in the process of returning to London from Hong Kong. Josephine Lee, spokeswoman in Hong Kong, said Sticpewich is relocating to assume the role of global head of emerging markets credit derivatives rather than co-head as part of structural changes in the fixed-income division. Lee declined further comment. Sticpewich, who was based in Hong Kong for more than two years, could not be reached.

Thomas Paul, chairman of the global markets interest rate risk committee at Deutsche Bank in London, has moved to New York to kickstart a fixed-income-focused trading arm, which will reportedly employ capital from both Deutsche Bank and third parties. The unit will invest in bonds and use over-the-counter derivatives, according to an official familiar with the project. Paul, who declined comment, is in talks with senior staffers at competing firms to join the project, with hires expected to be made over the coming weeks, the official added.

U.K.-based credit derivatives investors are asking credit shops for sterling-denominated synthetic credit instruments referenced to indices. Daniel Beharall, director of tactical fixed income at Henderson Global Investors in London, said he would like to invest in such liquid products, but investment banks do not offer them as yet.

One-month euro/dollar volatility inched up to 10.6% last Wednesday, from 10.2% the previous week. The upward volatility trend arose from movements in spot, which saw the dollar weaken to USD1.14 Wednesday, down from USD1.11 the week before, according to a trader in New York. Over the past week yield plays have been the talk of the market, with money flowing into the euro as players chase higher yields, said the trader. Volatility on one-year options jumped to 10.5% from 10.2% over the same period.

Credit-default swap spreads on France Telecom tightened to less than 100 basis points on Tuesday after the telco's recent rights offering. The move is part of a general tightening, but is still a huge shift bearing in mind France Telecom was trading at over 300bps in mid-2002. CDS traders said the entire credit-default swaps market saw extreme tightening early in the week, but the market became negative on credit in general after Federal Reserve chairman Alan Greenspan expressed deflation fears Wednesday. France Telecom followed this trend and widened back out to 115bps/120bps Thursday from about 95bps mid-market on Tuesday, traders said.

Matthew Cannon, former credit product salesman for institutional clients at HSBC, has returned to his old stomping ground to work in the structured credit trading department in London. Cannon will report to Nobby Clark, head of structured credit trading in London. In this new role, he will act as the liaison between different sales distribution channels and the structured credit products group.

Insight Investment, the asset management firm for the HBOS Group, with GBP64 billion (USD102.53 billion) under management, is planning to start purchasing credit derivatives. Abdallah Nauphal, managing director of fixed income and currencies in London and the head of a team that manages GBP40 billion across institutional and retail funds, said the firm would likely start using the products for hedging credit exposure in the next 12 months. "Maybe we should do a customer visit," said a dealer at a large credit derivatives house in London.

Lehman Brothers has hired Inna Raiskin White, v.p. and fund derivatives structurer at Deutsche Bank, as its first dedicated fund derivatives structurer in the U.S. Jean-Marc Spitalier, head of fund structured products at Lehman in London, explained that the firm has developed a fund derivatives business in the U.S. through its existing marketing team, but does all the structuring out of London. Now that demand has grown, it makes sense to have a staffer on the ground, according to Spitalier.

FundPartners is considering developing structured products on funds of hedge funds after winning a mandate to manage a hedge fund portfolio for a Dutch pension fund. The asset manager has had its eye on developing guaranteed products on hedge funds for some time (DW, 1/28/02), but the EUR100 million mandate from Stichting Pensioenfonds TNO should give the group a leg up on this goal as it could lead to more institutional money, said Jurcell Virginia, head of alternative investments at FundPartners in Laren, the Netherlands.

Seoul-based Hana Bank, with over KRW76 trillion (USD63.7 billion) in assets, is looking at investing in synthetic collateralized debt obligations for the first time as a way to boost yield for its investment portfolio. "This could help us pick up yield," said H.B. Kim, derivatives dealer. Kim continued that the firm is now studying such products and could enter the market within three to six months, likely for a CDO that encompasses a mix of Korean and foreign credits. "I'm calling them immediately," said a fixed income sales specialist at Crédit Agricole Indosuez.

The Man Group has launched a capital guaranteed product that uses a leveraged constant proportion portfolio insurance (CPPI) structure. This enables the fund to leverage itself to purchase zero coupon bonds with borrowed money when it is first launched, which allows more of the capital to be invested in the underlying assets, explained Gilbert Dunlop, head of product engineering in London. The advantage of this is that it prevents the fund from having to move its assets into cash securities as quickly as a traditional CPPI structure if there is a steep decline in the underlying.