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Goldman Sachs has split its structured credit marketing group in order to beef up the structuring capability of two of its marketing groups. Christopher Barter and Calum Osborne, who were co-heads of structured credit marketing, have moved into leadership roles in separate marketing groups and the firm has also revamped its marketing efforts to pension funds and insurance companies, according to Barter. The structured credit marketing group previously sold structured credit products to banks, insurance companies and pension funds.

JPMorgan has received a license to deal renminbi--making it one of only a handful of bulge bracket players to do so. Aaron Poon, Hong Kong head of rates trading, said the firm can now offer traditional banking activities onshore. It will likely take a year or so before there is a functioning derivative market, he said, adding that regulatory guidelines are expected to be introduced in the coming months. Once permitted, JPMorgan will look to offer renminbi derivatives, he added. Market players believe that the upcoming regulations will present a clearer picture of uses and procedures for derivatives, which will aid in the development of the market (DW, 9/1).

JPMorgan has integrated credit and rates trading in Tokyo and transferred the previous head of rates trading for Japan to take an undisclosed position in London. Reasons for the moves were not immediately apparent but appear to be part of a trend across Asia for banks to consolidate their operations (DW, 1/6). In the reorganization, Ashley Bacon, head of rates in Tokyo, will take a newly created senior role in the rates group in London. Two JPMorgan insiders expressed surprise that the firm has not yet announced Bacon's new role. Bacon declined comment.

Bank of America has hired Eric Ohayon, head of fx structuring at Lehman Brothers in London, to build up its fx structuring business in Europe. Ohayon said he reports to Alan Collins, head of the fx business in London. Ohayon replaces Greg Kaldor, managing director in foreign exchange sales in London, who moved over from a structuring to sales role last year, Kaldor said. Collins referred calls to Rhiannedd Jones, spokeswoman in London, who confirmed that BofA is beefing up its fx structuring presence, but declined further comment.

Economists and analysts looking for succor from tumbling equity markets and the specter of war with Iraq should beware the false optimism suggested by tightening credit default swap (CDS) spreads, warn derivatives market officials. While CDS spreads are an important indicator of the overall robustness of the economy, the CDS market may not always accurately reflect credit conditions more generally, explained Alex Reyfman, v.p. in credit derivatives strategies at Goldman Sachs in New York. The CDS spread is the annualized basis point premium demanded by the market in exchange for providing default protection.

Lehman Brothers has reportedly promoted John Wickham, co-head of global equity derivatives in New York, as sole head of the division. Wickham's former co-head, Mark Sanborn, will now head up global program trading, said officials familiar with the reorganization. Wickham and Sanborn did not return calls. Meanwhile Dave Gittings, co-head of U.S. equity derivatives sales, has left the firm. Bill Levy, who joined Lehman last year to co-head the group with Gittings, has assumed sole responsibility for the role. Gittings declined comment and Levy did not return calls.

Richard Cohen, head of Pacific Rim credit derivatives atMerrill Lynch in Tokyo and an industry veteran, has left the firm. He reported toPeter Walshe, head of credit products for the Pacific Rim in Tokyo. Market officials speculated that Cohen was let go as part of a global drive to reduce costs. Both Walshe and Takayuki Inoue, spokesman, declined all comment. Cohen could not be reached.

Merrill Lynch has begun to structure guaranteed products with single hedge funds as the underlying risk. Although Deutsche Bank has structured similar products, most firms do not offer these types of capital guaranteed structures because it is necessary to actively hedge the underlying exposure on a frequent basis. This is because single funds do not have the same diversity as fund of hedge funds.

Singapore-based APS Asset Management, with over USD850 million under management, is preparing to use equity derivatives in the coming months for a USD10 million hedge fund it launched last year. "This is an effective way to leverage our positions," said Wong Kok Hoi, cio and founder. It has considered since its inception last year using products such as equity options in Taiwan and Korea to create synthetic short positions because offshore borrowing is restricted (DW, 4/14). It is preparing to pull the trigger after being advised by its prime broker Goldman Sachs Global Securities Services to look at the instruments. The long/short fund primarily invests in cash equities in Asian markets including Japan, Hong Kong and Singapore. Wong noted that the notional size of OTC derivatives positions could total 10% of the portfolio this year.

By accessing foreign credit markets, credit investors can add diversity to their portfolios and take advantage of relative value opportunities. While investors can do this using the cross currency asset swap, investors concerned about the associated default contingent risk can use the perfect asset swap structure.

"There's no need to have three of four dealing rooms in Asia Pacific--you don't see this in Europe or the U.S."--Matthew Miller, head of fixed income and derivatives recruitment at Global Sage in Tokyo, commenting on ING Financial Markets moving its Tokyo credit derivatives trading operation to Hong Kong. For complete story, click here.

Guidelines regarding stock borrowing and lending which Taiwan's regulator--the Securities and Futures Commission--plans to publish in April, are expected to open the door to the development of a local equity derivatives market, according to traders. After the initial outline, the SFC will look to draft detailed regulations on securities lending in the coming months, said Wang Hung Rui, an official at the regulator in Taipei.