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  • Deutsche Bank has transferred Insuk Jung, head of trading in the global markets group in Seoul, to its Singapore hub Jung said he will take a regional fixed income derivatives trading role but declined further comment. He reports to Bryan Yap, co-head of emerging markets Asia for fixed income and derivatives trading in the Lion City.
  • One-month dollar/yen implied volatility shot up to 12.94% last Wednesday after settling down to 10.83% going into the weekend. The week before implied volatility had rocketed to 12.46% from around 10% after a statement from the Group-of-Seven most industrialized countries about exchange rate flexibility (DW, 9/29).
  • Dresdner Kleinwort Wasserstein is planning to structure what would be the first collateralized fund obligation referenced to an index of hedge funds. The CFO would reference one of the hedge fund indices, such as HFRX or Morgan Stanley Capital International, which investors can replicate, according to an official. "It's just a question of time," noted the official. Mehraj Mattoo, managing director and global head of alternative investments in London, declined comment.
  • Dresdner Kleinwort Wasserstein has started selling structured notes that reference German Bund/swap spreads to investors who believe the European economic recovery is just around the corner. A typical note pays a fixed coupon for the first two years and then switches to leveraged exposure to the Bund/swap spread, according to Achim Beck, managing director and head of derivatives marketing for Germany and Austria.
  • Foreign exchange investors are flooding into euro calls/dollar puts with reverse knock outs as the euro strengthens against the ailing U.S. dollar. One New York-based trader explained that purchasing the options gives clients a low-cost exposure to the single currency's surge.
  • The Japanese collateralized debt obligation market has stalled this year on the back of chronically tight spreads. In contrast, the number of European deals has rocketed. Moody's Investors Service rated 154 CDOs in Europe during the first half of the year compared with 83 in the same period last year, even though the amount of risk being transferred halved (DW, 8/24).
  • DSP Merrill Lynch is establishing an onshore Indian rupee interest rate derivatives desk and is looking to begin trading by year-end. "The Indian market is still in development mode," said Jayesh Mehta, head of debt in Mumbai. "There's lots of potential," he added.
  • Rafael Berber, former head of the global equity-linked group at Merrill Lynch in London, has been appointed to the new role of vice chairman of global capital markets and financing. Berber was displaced from his previous role following a reorganization that saw Simon Brookhouse, managing director and head of equities for the Pacific Rim in Hong Kong, head to London to take over Berber's responsibilities (DW, 9/14).
  • New Smith Financial Solutions has received its Corporate Finance Advisory license from the U.K.'s Financial Services Authority. The firm is an independent boutique specializing in risk management advisory, such as selling non-core assets. It was set up earlier this year by former Merrill Lynch professionals T.J. Lim, ex-global debt capital markets coo, Glenn Barnes, former European head of structured credit, and Kevin Krespi, ex-head of debt for the Pacific Rim (DW, 7/7).
  • Energy producerPNM Resources entered a Treasury lock to hedge interest rate risk before its principal subsidiary, Public Service Company of New Mexico, issued USD300 million in bonds on Sept. 10. Kirk Meyer, treasurer at PNM Resources in Albuquerque, N.M., said it executed the Treasury lock approximately a fortnight before the bond sale because it was happy with the rates. He declined to elaborate.
  • Asian markets have been awash with a variety of vanilla equity-linked notes and capital guaranteed structures in the last three years in an attempt to meet investor demand for yield in a low interest rate environment. However as stock and index volatilities have declined and equity markets have rallied, equity-linked products have evolved that allow coupons to be accrued or stock accumulated over the life of the note.