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Although German ABS/MBS volumes may have fallen in 2000, bankers involved in the asset backed market

Many bankers believe that as the growth of the European government bond market slows, there will be an opportunity for sub-sovereign issuers, including those in Germany, to attract investors. However, those hoping that the Länder might prove willing substitutes have so far been disappointed.

Germany's mortgage banks have faced many challenges this year: the turbulent credit market, the weak euro, competition from new European Pfandbrief style products. But while these were challenges that the Hypothekenbanks could perhaps predict and plan for, one major threat came as a surprise: the German banking regulator's proclamation that mortgage banks could be taking dangerously high interest rate risks. And while the Pfandbrief community has responded diligently to the scrutiny of analysts, investors and regulators, further challenges lie ahead.

"Three things conspire to make Germany one of the most attractive markets in Europe for on-line banks," noted a recent report published by Credit Suisse First Boston (CSFB). These are "a high level of internet penetration, a tradition of electronic payments and a fragmented market dominated by the public sector."

The China Mobile convertible is receiving strong demand and was already more than 10 times covered yesterday (Thursday). The final terms are due on Monday. The simultaneous equity offering is slower, although bankers expect institutions to fall into place over the next few days before final pricing on Tuesday October 31.

Japanese finance company Eiwa Co Ltd has completed its first public securitisation with a $100m offering backed by consumer loans. Sole managed by CIBC World Markets, the deal was wrapped by monoline insurer Financial Security Assurance, allowing Eiwa to achieve a triple-A rating from all three agencies.

Australia GPU GasNet launched a debut A$150m, three year medium term note (MTN) this week. The transaction was scheduled to finish pricing today (Friday).

Hong Kong Cheung Fung Technology Holding, a cigarette paper maker, has postponed its planned IPO and intends to locate strategic investors instead - but might return to the market later when conditions improve. Cheung Fung had been targeting around HK$1.3bn from its IPO by selling 1.2bn shares at HK$1.08 each in an offer to be handled by China Everbright Capital and United Overseas Bank.

Mass Transit Railway Corp (MTRC) is wavering in its plans to arrange an international fixed rate bond issue, a deal that would be the company's first since January 1999. The recently partially privatised Hong Kong based railway company was said to have been considering a global $500m, 10 year bond issue.

Two government linked conglomerates and a corporate announced the launch of medium term note (MTN) programmes in the Singapore domestic markets this week, offering further signals of the appetite of domestic investors and growing supply of Singapore bonds. Government linked conglomerates Keppel Corp, Sembcorp and property company City Properties all announced the launch of MTN programmes and issues from them.

Another far from perfect Japanese IPO was completed last Friday as shares in SKY Perfect Communications began trading on the Tokyo Stock Exchange's Mothers market. They closed yesterday (Thursday) at ¥216,000, down almost 33% from the ¥320,000 issue price that had been set earlier at the top end of the ¥280,000-¥320,000 indicated range. The issue is another setback for investors in the Japan market, which has seen stock values weaken across the board this year. New issues have been largely disappointing, especially the jumbo Oracle Japan and the large Lawson placements.