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Dresdner Kleinwort Wasserstein is bolstering its equity derivatives operation in Asia with the launch of a desk in Hong Kong and new hires in Tokyo. The firm will initially focus on issuing and trading local warrants but plans to expand into all other equity derivative products.

Dutch information services company, Wolters Kluwer, is considering selling the embedded call option in a EUR225 million (USD200 million) perpetual bond it issued last week and enter an interest-rate swap to convert the fixed-rate bond into a synthetic floater.George Dessing, group treasurer in Amsterdam, said it might sell the call to shave 20-30 basis points off its all-in cost of funding.

Edward Yao, principal, equity derivatives trader at Morgan Stanley in Hong Kong, has left the firm. Traders in Hong Kong believe Yao is moving to a local hedge fund. He reported to Stevan Vrcelj, head of derivatives, at Morgan Stanley's Hong Kong office. Vrcelj commented that the bank does not intend to find a replacement but has restructured the trading desk, bringing traders in from the region, declining further comment. Yao could not be reached.

Speculation about the likely size of the next U.S. interest rate cut ahead of the Federal Open Market Committee meeting on May 15 saw a surge in Mexican peso/U.S. dollar options activity last week. James Kennan, v.p., Latin American currency options trading at BNP Paribas in New York, said the FOMC might cut rates by as much as 50 basis points. An easing of this magnitude is expected to see further peso appreciation in the spot market.

Junichi Yoshioka, a derivative salesman at Goldman Sachs in Tokyo is heading to over to Deutsche Bank, according to a market official. The official said that Yoshioka will handle fixed income sales, as well as structured products and fixed-income derivatives. Officials at both firms declined comment. Yoshioka could not be reached by press time.

Real options are increasingly being used for strategic decision-making. Recently, a prominent consultant in the field estimated $30-40 billion in corporate transactions and investments were evaluated and executed last year using real option valuation technologies.

J.P. Morgan is expanding its exotic credit derivatives presence to include New York and Asia. The products are currently offered by J.P. Morgan in London. Jean-Pierre Lardy, v.p. and head of credit derivatives trading in New York, said it plans to offer products that replicate the structure and pay off of tranches in collateralized bond obligations.

The 54th Cannes Film Festival may have been happening down the road, but as far as some derivatives professionals were concerned the real stars were quants and academics gathering for last week's ICBI-sponsored Global Derivatives & Risk Management 2001 conference in Juan Les Pins, France. "I am here because of the number of celebrities," gushed Frank Weider, director of risk control at Dresdner Kleinwort Wasserstein in London. Among the industry luminaries gracing the conference were John Hull, professor of finance at the University of Toronto, and Emmanuel Derman, managing director, firm-wide risk at Goldman Sachs in New York.

RenaissanceRe is setting up a weather derivatives desk to complement its catastrophe risk management departments. Michael Cash, v.p. in Hamilton, Bermuda, expects the reinsurance company to be actively trading weather products by year-end. He added, "the best way to learn is to get your hands dirty."

Tulip Holdings, a start-up trading company based in Atlanta, is moving ahead with plans to offer listed and over-the-counter derivatives on the seating capacity of airlines. John Lancaster, president, said Tulip Holdings entered in March a joint venture with a company that builds online derivatives markets, declining to name the company. Tulip plans to offer swaps, futures, forwards and options by the middle of next year. Tulip started preparing the move last year (DW, 12/18/00).