Search results for

Thank God that August is out of the way. That was the view of a very famous UK equities specialist who has been in the City for more than 30 years. In his opinion equity markets and equity trading volumes are, on an adjusted basis for today's expenses and additional employees, the worst since 1974. "Stockmarkets fell faster in 1987 and then in the autumn of 1998," he continued, "but they recovered almost immediately, volumes were good and the main institutions did not hesitate to aggressively buy what they considered to be cheap stock." Is the outlook really that bad? In equities the situation does seem to be dire and the bulge equity houses such as Merrill Lynch and UBS Warburg may have to thin down again if, as seems likely, they are barely covering costs. We are hoping to have a meeting soon with Michael Marks, who has also seen it all during his hugely successful career and we will hang on every word. At JP Morgan Chase, Geoff Boisi has clearly warned that the bank, although not exactly of Billy Bunter proportions and only a middleweight in equities, needs to shed another 15-20 pounds.

Bahrain Arrangers Arab Banking Corporation, Bank of Tokyo-Mitsubishi, Citibank, Commerzbank, Gulf International Bank, National Bank of Abu Dhabi and National Bank of Kuwait signed banks into the $100m three year term loan for Bank of Bahrain Kuwait (BBK) yesterday (Thursday).

Crédit Agricole Indosuez is preparing to launch around Eu310m of notes backed by residential and commercial mortgages originated by five Italian co-operative banks. The deal is expected in mid to late September. Credico Finance, which combines mortgages originated by the Banche di Credito Cooperativo dell'Agro Bresciano, di Alba Langhe e Roero, di Orsago, di Roma and Romagna Est, will be the pilot transaction for a programme of securitisations organised by Iccrea Holding, the central advisory body to the over 500 small co-operative banks in Italy.

Württembergische Hypothekenbank, one of the five mortgage banking subsidiaries of HypoVereinsbank, this week launched a £630m synthetic securitisation of UK commercial mortgages. The deal follows a £1bn synthetic issue two weeks ago by fellow German mortgage bank Eurohypo, parcelling similar collateral.

The first week of September has seen a slow start in trading activity, as some dealers say investors are sitting on cash while deciding on new issue prospects. However, dealers say the climate is more optimistic and credits are better bid.

Introduction

CIBC World Markets is working to reestablish its credit derivatives structuring, marketing and trading presence. David Wagner, executive director of U.S. credit derivatives, said "this is a business that is simply crying out for further efforts from us. This will be a renewal of the credit derivatives business to complement CIBC's CDO and private placement work." CIBC plans to hire several professionals to staff the department, but Wagner declined to specify exact numbers.

Fears of a weakening dollar coupled with a plummeting Nikkei 225 continued to fuel a yen call buying spree last week. One-month Japanese yen/U.S. dollar implied volatility rose to 10.5% last Thursday from 9.75% a week earlier as demand for yen calls/dollar puts remained high. Japanese investment banks, corporations and life insurance companies were the most active buyers of the one-week yen calls/dollar puts. The one-month risk reversal also moved more in favor of yen calls as a result of option buying. In a typical trade players purchased yen calls/dollar puts struck around JPY117 when spot was trading around JPY120. Traders say that if the Nikkei continues to fall the trend of buying yen calls will continue because investors would look to move their assets into safer cash products.