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At a roundtable discussion jointly hosted by Asiamoney and Citibank, leading bankers, corporates and service providers discussed the differences that e-commerce can make, and has made, to supply chain management in Asia.

Technology is fast transforming the world of investment research. Not that long ago, fund managers had to thumb through piles of paper reports, literally metres high, to peruse stock recommendations and updates from brokerages. But computerization is changing all that. Screens have replaced paper. Yet some specialists argue that a paper-and-ink mentality lingers on to the detriment of the more efficient data access made possible by the bolder use of technology.

The letter of credit, long the backbone of the trade finance industry, is outdated, and the race is on to create a viable on-line alternative. But institutions are discovering that financing their clients on-line is not as straightforward as it seems. By Joy Lee.

The Miles transaction has emerged as one of the most innovative of recent equity-linked deals, as well as one of the most controversial, with one banker saying he is "amazed" to see it featuring in league tables of convertible deals. But as a number of other convertible bond houses have included the transaction in their new issue statistics, it seems reasonable to classify the transaction under the umbrella of convertibles.

The convertible product is being taken up by issuers in an increasing variety of contexts. Along with the traditional considerations of cost savings versus straight debt and less dilution compared with equity issues, convertibles are today being viewed by many companies as a core source of funding in their own right. Equity-linked financing as part of asset disposals in the telecoms sector is just one of the many channels that are feeding into the market.

European convertible bond outstandings have undergone explosive growth over the past two to three years, reflecting a general upsurge in financing requirements among European borrowers, the attractions of selling large cross-holdings through exchangeable bonds and a ready availability of demand due to a transformation of the investor base for equity-linked securities. Supply did not materialise quite as expected last year, but the market's future looks bright.

While German issuance in the convertibles market has surged over the last 12-18 months, bankers report that they remain disappointed by the appetite for equity-linked bonds among German investors. In a highlight deal such as last year's Hutchison Whampoa/Vodafone offering, for example, German investors accounted only for about 3% of allocations, and even in German transactions they have scarcely been influential: domestic institutions bought about 11% of the Munich Re/Allianz exchangeable and only 12% of the EMTV convertible, according to figures published by WestLB Panmure.

Companies that issue convertibles usually have a wide range of financing and strategic objectives that the product obligingly sets about meeting in full. Many bankers suggest there has never been a better time to issue a convertible bond than at present, and few companies that have tapped the market over the past 12-18 months would disagree with that view. Five issuers described the attractions of the convertibles instrument to EuroWeek.

Hedge funds have emerged as the main drivers of investor demand for equity-linked, but whether the large returns achieved by arbitrage desks over recent months will be sustained is open to debate. High implied volatility levels may be an aberration or a long term trend. While hedge funds have entered the market en masse, another set of investors - equity funds - have largely been notable by their absence.

One of the key consideration for issuers in the convertibles market is clearly the impact that an issue will have on the balance sheet. Although convertibles will usually be regarded by the ratings agencies as debt, the possibility (or probability) of ultimate conversion into equity will also mean that a convertible bond is less likely to exert downward pressure on a borrower than an issue of straight debt. "We start out from the position that convertibles look like debt," says Chris Legg, senior corporate analyst at Standard & Poor's in London. "Although the coupon is lower than on a straight bond there is still the obligation to service coupon repayments, as well as the possibility of cash repayment at some stage in the future."

Lack of transparency in documentation for convertibles new issues has led to some nasty surprises for investors in the European market, but efforts are being made to tighten up the legal small print. There is maybe little chance that documentation in the European market will become as standardised as US prospectuses, but further work is needed if investors are to feel confident that proper safeguards are in place.