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The 2000 year-end was a flurry of MBS activity in Australia. Investors hardly had time to develop their Christmas holiday snaps before National Australia Bank set a new benchmark for Australian originators with the launch of its global RMBS. Hard on its heels were three further term securitization issues each sporting an enticing new asset class. Mark B Johnson reviews the increasingly diverse world of Australian structured finance.

Australia's economic outlook is heavily dependent on the state of the US economy. That's a tough problem for a country that has already faced a year of distortions to its economic data. By Chris Wright.

Last year, the Australian stock market stood firm – no longer are the country's leading indices vulnerable to the vicissitudes of global commodity prices. Australia is now a broad-based services economy and the market is host to a diverse range of innovative, well-managed companies with a deserved reputation for their focus on shareholder value. Mark B Johnson reports.

In early February, at HSBC's Hong Kong headquarters, Asiamoney and HSBC jointly hosted a roundtable on cash management issues across the region. E-commerce – and the human barriers to its widespread acceptance – dominated the discussion.

Asiamoney's analysis of the health and efficiency of Asia's strongest banks, compiled together with Fitch IBCA, Duff & Phelps, reveals some surprises. But the name at the top surprises no-one: Hang Seng retains its top spot.

In early February, at HSBC's Hong Kong headquarters, Asiamoney and HSBC jointly hosted a roundtable on cash management issues across the region. E-commerce – and the human barriers to its widespread acceptance – dominated the discussion.

Custody, once a word for safe-keeping and settlement, now spawns a variety of value-added services as banks tap into profitable new areas to offset tough competition and wafer-thin margins. By Ben Davies.

US energy company Enron is once again involved in a face-off with the central government in New Delhi and the state government in Maharashtra. Differences arose after the state-run Maharashtra State Electricity Board (MSEB) stopped buying power from Enron's Dabhol Power Company in Maharashtra in western India in early January and also defaulted in the payment of power dues worth US$49 million for the months of November and December 2000. MSEB is the sole purchaser of electricity produced by Dahbol and when it stopped placing orders, Dahbol was forced to close down its plant. MSEB's action was in response to Dahbol's raising of its power prices which, in turn, was a response to the recent hike in the international price of naphtha, the fuel it uses. The gradual slide in value of the Indian rupee against the US dollar had also affected the price of electricity. Under the power purchase agreement between MSEB and Dahbol, payment is determined in US currency and though MSEB pays in Indian rupees, the amount is the rupee equivalent of the dollar amount.

For once, the Indonesian government did something right. After keeping the markets waiting for two years, a new telecoms industry deal was announced last month – to wide acclaim from local and foreign investors. The deal sets up a new competitive structure for the industry with two large privatized state-owned companies in competition for fixed-lines, mobile telecoms and multimedia. It ends the previous complex system of cross holdings linking PT Telekomunikasi Indonesia (Telkom) and PT Indonesia Satellite Corp (Indosat) and also offers a way forward in solving the vexed issue of unwinding an existing scheme of joint operations involving foreign partners in fixed-lines. This system is now uneconomic and is impeding further foreign investment in the sector.

Japan's mobile carrier NTT DoCoMo remains gung-ho despite the sorry state of the telecoms sector – and with good reason. Despite its shares dropping on the back of the poor showing of the Nikkei 225 index, investors are still listening to the company's upbeat story. Proof came in February with an offering of 460,000 new shares at ¥2.066 million (US$17,600 each). This price represented a discount of only 3%. Given the general disillusionment in the sector, the company put considerable effort into its sales pitch. Led by Goldman Sachs and Nikko Salomon Smith Barney, DoCoMo embarked on a three-week roadshow, covering the US and Europe to convince overseas institutional investors of the company's worth. There were many eager buyers, with the institutional offer being three times oversubscribed. The US snapped up 80,000 shares with other international investors buying 120,000. Japan's institutional investors only accounted for 40,000 shares. Meanwhile, the retail portion, consisting of 220,000 shares, was 2.6 times oversubscribed, reflecting DoCoMo's strong brand name, say analysts.

It could be one of the biggest Asian defaults ever. The Asia Pulp & Paper (APP) group has around US$10 billion in debt. The possible impact of a default is variously described by market participants as "catastrophic", "alarming" and "a very exciting investment opportunity." Yet until quite recently, the markets saw nothing to be alarmed about in the debt load of the Singapore-headquartered group, which is part of Indonesian magnate Eka Tjipta Wijaya's Sinar Mas conglomerate. In April last year, following the successful completion of APP China's US$403 million bond issue, Salomon Smith Barney commented that the strong expectation was that the credit environment for APP would get even better. In May last year Salomon made a special point of following Standard & Poor's downgrade of the Republic of Indonesia, with a note reiterating its unchanged credit rating on APP and its subsidiaries.

The challenge for the bookrunners for CNOOC's second-attempt IPO was how to persuade international investors that China – and specifically the oil sector – was still a good buy. Those who had bought into China IPOs last year lost money by and large. The previous two oil related IPOs to come out of the mainland – that of PetroChina and Sinopec – were at various stages well down on their issue price (although both ended the year well up). Although CNOOC managed to make it to the market at a premium of about 15% to its comparables, pricing was inevitably dragged down by continuing poor sentiment towards the sector. The company's dual listing in New York and Hong Kong raised US$1.26 billion pre-greenshoe. The price – HK$6.01 per share and US$15.4 per ADS – represents a price/earnings multiple of about five times its forecast 2000 earnings and 3.5 times forecast 2001 earnings – and was midway in the offer range. President of Merrill Lynch China, Charles Li, says: "We did a lot of pre-marketing and so we were able to read the market better this time [than when CNOOC attempted to list last time]."