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In one of the most gutsy equity trades in Asia in recent times, Citigroup this week bought and sold Cable & Wireless's entire 14% stake in Hong Kong-based telecoms company Pacific Century CyberWorks (PCCW).

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

The Asian structured foreign exchange derivatives market has picked up steam in recent weeks due to the greenback's fall against other major world currencies. "Given the recent dramatic movement in the fx market, we're seeing a lot of inquiries," said Samir Atassi, director in the strategic solutions group at Merrill Lynch in Hong Kong. For instance, Atassi noted that several companies are now looking at hedging their yen exposure as they tend to have revenues in dollars. Much of the outstanding yen liabilities are a result from bilateral loans from Japanese export agencies in markets such as China and South East Asia. "A lot of corporates weren't expecting such a rapid fall," he added.

Implied volatility for euro/dollar options rose sharply last Tuesday after a yard of three-month risk reversals and around USD600 of euro calls went through the market. One-month implied vol rose to 11.65% Tuesday from 10.9% the previous Friday. Traders said the euro calls/dollar puts had strikes of USD1.2250, when spot was trading at USD1.19. The three-month risk reversal trades pushed the risk reversal to 1.05 vol in favor of euro calls. By Wednesday, however, traders said that most of the speculation had been done and by Thursday the risk reversal was trading at 0.85 vol and one-month implied vol had fallen to 10.65%.

Derivatives houses in Hong Kong including HSBC, JPMorgan andStandard Chartered Bank, are reintegrating their trading operations after the recent lifting of a travel ban by the World Health Organization. At the height of the SARS virus outbreak last month, several firms introduced drastic measures, such as setting up separate desks and shipping staff overseas (DW, 4/13). "There's still some travel restrictions, for instance Taiwan, but everyone's back in the main dealing room," said Pierre Goad, spokesman at HSBC in Hong Kong. The fifty-plus treasury and capital markets staff that relocated to makeshift desks during the crisis (DW, 4/20) moved back in stages last week, Goad continued.

Major credit derivatives houses in Japan, including JPMorgan, Merrill Lynch and Société Générale, are racing to complete the first synthetic collateralized debt obligations referenced solely to Japanese asset-backed securities. "We've been seeing a few ideas," said Yusuke Seki, v.p. in the structured finance group at Moody's Investors Service in Tokyo. Seki expects the first deals to hit the market within six months. Market officials estimated that the CDOs would be over USD500 million.