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Introduction

Steven Goldstein, president of TradeWeather.com, an on-line weather derivatives company, is among the thousands still unaccounted for following the Sept. 11 terrorist attack on the World Trade Center in New York. Goldstein, who launched Tradeweather.com in 1999, moved into the North Tower of the WTC about three weeks ago. The move followed Cantor Fitzgerald's acquisition of the company which was incorporated into the broker's emissions trading group, according to a market official. Cantor occupied floors 101-105 in the North Tower. Officials at Cantor did not return calls.

One-month euro/U.S. dollar implied volatility fell 2% last week as traders concluded that the greenback will hold its value because the terrorist attacks in the U.S. will impact Europe as much as the U.S. One-month vol fell to 12% Thursday from 14% the previous week and one-year vol fell to 12.6% from 13.3% Tuesday. Proprietary traders selling one-month and shorter-dated euro calls/dollar puts drove the fall in volatility. Most of the options were at-the-money with spot fluctuating around USD0.9150 throughout the week. The selling of euro calls caused the one-month 25-delta risk reversal to fall to one vol point in favor of euro calls Thursday from two vol points the week before. Traders were selling options because the forecast fall in the dollar against the euro did not materialize and option holders were losing money through time decay. Traders said volumes have not yet returned to the levels that they were at before the terrorist attacks in the U.S.

Peter Colvin, senior v.p. and Asian regional head of corporate distribution at ABN AMRO in Singapore, resigned last week. "I'm going to Queensland," Colvin said, adding that after 15 years at the bank it is time to take a break. He has no immediate plans to reenter the business.

Banc of America has hired Dik Blewitt, chief strategic officer at creditex in New York, as a managing director in its structured credit products group. Blewitt said he is structuring credit products for pension fund and insurance clients in the U.S. The appointment was a strategic hire by the firm rather than part of an expansion of the department. "It is a homerun in terms of opportunities," he quipped, referring to the firm's large balance sheet and global client base.

UBS Warburg continued to enhance its presence in the Japan equity capital market when, last Friday, it completed the sale of 15.1525m shares of convenience store operator Lawson on behalf of troubled property group Daiei. The deal secured the equivalent of almost $500m for Daiei despite the protracted slide in the Tokyo stock market.

Westfield Holdings sold A$500m of shares overnight on Monday at an 8% premium through lead manager and underwriter UBS Warburg. As well as achieving the highest premium for a secondary offering in recent history, the stock traded up further during the week, closing yesterday (Thursday) at A$17.25. Westfield is Australia's largest property investor and sold the new shares after announcing plans to buy 23.9% of Rodamco North America from Stichting Pensioenfonds ABP. The A$920m deal will make Westfield the second largest shopping mall owner in the US.

Credit Suisse First Boston and UBS Warburg this week began premarketing the sale of 20% of Korea Tobacco & Ginseng (KT&G) to international investors. The deal has an unusual structure. KT&G will raise up to $250m through the sale of a convertible issue and use the proceeds to purchase half the block from the state. The government will sell the other half to international investors through Global Depository Receipts (GDRs).

Indonesia Dorodjatun Kuntjoro-Jakti, chief economics minister for Indonesia, said that the government is aiming to reach less than 10% inflation in 2002, down from current levels of 13%. He added that economic growth of over 5% was unlikely. The IMF has signed a fresh pact with Indonesia in which growth of 3.5% was forecasted.

Australian investors are to be offered a choice today (Friday), as the Northern Territory finance department and BT Office Trust both price their similarly rated bond issues. The two transactions offer contrasting credit stories for the domestic market, with the A- rated Northern Territory offering quasi-government risk while BT Office Trust embarks on its debut issue into the market, also with an A- rating.

French automotive manufacturer Renault is looking to make its entrance into the Samurai market though a ¥50bn five year Samurai deal next week. Merrill Lynch and Daiwa Securities SMBC have been appointed as joint lead managers. "Renault has never accessed the market before, but it is a highly regarded name in Japan because of its partnership with Nissan," said a banker at Merrill Lynch.