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Investors across Europe are looking forward to an opportunity this year to put behind them two consecutive years of falling equity markets. Investors across Europe have endured numerous profit warnings and plummeting markets and they expect some respite in 2002. Morley Fund Management has placed a year end target for the FTSE 100 in 2002 of 6000. This would be a 13% increase from the FTSE's opening this year of 5217.4. "With value returning and the worst of the economic news hitting right now, we anticipate a far better year ahead for investors," Morley said in a report. Axa Investment Managers, in a report looking ahead to the new year, is also optimistic. "Major markets have not experienced three consecutive down years in a very long time and, as such, we remain optimistic on the bullish nature of 2002," read the Axa paper published on December 31.

Freddie Mac will next Thursday launch the largest ever fixed rate bond issue, a $7bn Reference Note, as it seeks to take advantage of favourable primary market conditions to avoid the problems interest rate volatility is posing its calendar programme. All of the US agency's Reference Notes have a target size of around $10bn, although lower at launch, but the volatility of the last few months has presented Freddie Mac with original issue discount (OID) problems that threaten to hamper increases to its outstanding deals.

Investors across Europe are looking forward to an opportunity this year to put behind them two consecutive years of falling equity markets. Investors across Europe have endured numerous profit warnings and plummeting markets and they expect some respite in 2002. Morley Fund Management has placed a year end target for the FTSE 100 in 2002 of 6000. This would be a 13% increase from the FTSE's opening this year of 5217.4. "With value returning and the worst of the economic news hitting right now, we anticipate a far better year ahead for investors," Morley said in a report. Axa Investment Managers, in a report looking ahead to the new year, is also optimistic. "Major markets have not experienced three consecutive down years in a very long time and, as such, we remain optimistic on the bullish nature of 2002," read the Axa paper published on December 31.

Fund managers can be exposed to up to 150% more risk than they have predicted due to inadequate risk modelling systems, according to a report published yesterday (Thursday) by ABN Amro. The report demonstrates that certain risk models can be up to twice as successful in risk prediction and control during stress periods as less sophisticated models used by the majority of fund managers.

The launch of three funds last year helped Gartmore increase its hedge funds under management by 46%, as its flagship fund made an impressive return of 10.7%. Gartmore now has $2bn of hedge funds under management, and is expecting to launch more funds this year."We have one strategy under seed and have three more planned," said Graham Martin, account director for hedge funds at Gartmore.

Hewlett-Packard International Bank has upped the size of its $200 million Euro-CP facility to $500 million.

* European Investment Bank Rating: Aaa/AAA/AAA

The Region of Lombardy, the richest and largest region in Italy, has signed a euro2 billion ($1.81 billion) Euro-MTN programme. Merrill Lynch and UBS Warburg are the co-arrangers. The facility is rated AA+ (Standard & Poor's), Aa2 (Moody's) and AA (Fitch). All three ratings are one notch higher than the Republic of Italy's (AA/Aa3/AA-), making Lombardy the first region in the world to be rated above the sovereign by all three main agencies. Nicolo Ragnini, head of Italian public sector at UBS Warburg, believes that these strong ratings will be a great asset to the region. He says: "To receive such good ratings from all of the agencies is a great achievement. They are now the best-rated Italian issuer around. This gives them a huge advantage over Italian banks and corporates." The programme will be used to finance Lombardy's transport infrastructure. There is no debut trade planned as yet, but it is expected to come early next year. The deal will mark a step forward for the Italian sub-sovereign bond market, which was given a boost in December when the Region of Tuscany issued its first bond off its euro1.5 billion Euro-MTN shelf - a euro465 million long-dated deal. Lombardy follows in the path of other regions that have accessed the Euro-MTN market and reflects the increasingly popular trend towards alternative finance in Italy. Six other Italian regions - Abruzzo, Lazio, Liguria, Marche, Sicily and Umbria - have signed Euro-MTN facilities in the last four years. The dealers are the arrangers, ABN Amro, Banca IMI, Caboto (Gruppo IntesaBci), Deutsche Bank, Dexia Capital Markets, JPMorgan, Lehman Brothers and Salomon Smith Barney.

BNP Paribas has been added as a dealer to ICI Finance's $1 billion Euro-CP programme. The facility was signed in August 1996 via Barclays Capital and currently has $228.97 million outstanding off 11 trades.

Full year figures from Dealogic show a drop in the number of syndicated loans signed in the Euromarket to 1,096 in 2001 from 1,309 in 2000. Volume of debt dropped in the same period to $507bn from $727bn. The fall in loan volume does not show the full extent of the nosedive in lending activity since September 11 2001. The fourth quarter of 2001 was the slowest quarter on record in Europe since 1992.

Landesbank Hessen-Thuringen (Helaba) has signed a euro10 billion ($9.04 billion) Euro-CP/Euro-CD facility via Citibank. The dealers are Barclays Capital, Citibank, Deutsche Bank, Helaba, JPMorgan and UBS Warburg.