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Standard Chartered is setting up a credit derivatives operation in Asia and will commence trading within weeks, said Debbie Min, head of structured asset solutions for global markets in Singapore. "We are leveraging off our existing fixed income business to provide further depth to the bank's product capabilities and therefore, tailored solutions it can offer to our customer base." She described the move as part of the bank's overall effort to increase its presence and capabilities in the Asian capital markets.

J.P. Morgan Chase has hired Michael B.W. Cho, head of interest-rate derivatives trading at Standard Chartered in Seoul, in a new position with responsibility for Korean won-denominated bonds and credit products sales and trading. B.J. Kim, J.P. Morgan's head of Korean credit market sales in Seoul, to whom Cho reports, said he is not looking to make further hires. J.P. Morgan set up a Korean credit-related business earlier this year (DW, 3/19).

Gartmore plans to launch a Pacific region and emerging market hedge fund in July that will use equity derivatives. Martin Phipps, head of hedge funds in London, said the vehicle will use over-the-counter and listed derivatives to go long and short equities in the Pacific region and all emerging markets. Phipps anticipates a greater role for futures than OTC derivatives because Gartmore's skill is in stock selection and it is unlikely to want to pay option premiums.

RMB Asset Management has launched an active equity product with an options-based guarantee that the firm believes is the first of its kind in South Africa.

Nationwide Building Society, the largest thrift in the U.K. with GBP60 billion (USD85 billion) in assets, and Yorkshire Building Society, which has over GBP11 billion in assets, are preparing to make their first use of derivatives to remove credit risk from their balance sheets. The plans come on the back of a recent change to legislation that now allows building societies to tap the credit market.

On the view that the flight to quality is over, Mercantile Capital Advisors is shortening portfolio duration and swapping out of treasuries and agencies into spread products, says Kevin Dachille, portfolio manager with the Baltimore-based investment firm. The manager--who calls his tactic a recovery strategy--anticipates the economic slowdown will end soon.

John Hancock Advisers, the Boston money manager with some $1.5 billion in taxable fixed income, has been shifting its $800 million high-yield fund into a stronger weighting in bonds issued by companies in Mexico, Columbia, and Brazil. Arthur Calavritinos, v.p. and portfolio manager, says he recently added just over 1% of his portfolio (or about $10 million) to investments in those countries, and expects to add another 5% ($40 million) by this time next year, though he isn't looking for a specific trigger for the next move.

Merganser Capital Management is planning to go 10% over its benchmark's duration because the firm is bullish on short-term bonds, says Douglas Kelly who manages a $2 billion of short term bond portfolio. The steepening of both the yield and credit curves allows for an extra pick-up in yield and spread, which is why he is extending the term of his picks.

This chart, provided by Citibank/Salomon Smith Barney Inc., tracks bid-ask prices for par credit facilities that trade in the secondary market. It also tracks facility amounts, ratings, pricing and maturities.

Sellside analysts say Liberty Media's announcement last week that it will fund United-Pan Europe Communications through a convertible bond that will be senior to outstanding UPC paper, instead of the planned rights offering, raises concerns about the extent of Liberty's commitment to the subsidiary. UPC 11.25% notes of '10 traded down from about $60 to $55 on the announcement, and analysts say UPC has funding needs that will be difficult to meet, and should leave bondholders looking for the next opportunity to trade out of the credit. Calls to Liberty were not returned by press time.

Barclays Capital is looking to hire a loan researcher to round out the staff of its par trading desk. Jeff Glasse, head of trading, says the bank recently secured a fifth sales member and is now seeking a loan researcher to support trading. Most recently the bank hired Ellen Luntz, formerly of Goldman Sachs, to work on its sales team. "We're delighted to have her back," he said, noting that Luntz worked for Barclays in the early 1990s.