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In their hunt for yield, European investors are rushing towards the credit market, seeing corporate issuance as the solution to the declining returns on dwindling government supply.

If asset classes were a compendium of games, the credit market would be its Snakes and Ladders. The opportunities it offers to investors in the form of enhanced yields are self-evident enough; but so too are the pitfalls which are lined along the way for investors in the credit market in the form of event risk.

As investors are demanding an ever greater range of credit products, they are also calling for more sophisticated research. But, to date, the full impact of credit analysts' views on prices has not been felt.

Morningstar Japan made a strong debut on Nasdaq Japan last Friday, June 23, setting the stage for bullish flotations by other start-ups from internet investor Softbank Corp's stable, suggest analysts. The online investment information provider was first traded at ¥10m ($95,620) per share, up 43% from its initial public offering price of ¥7m. It finished its first trading day at ¥8.5m.

BNP Paribas, Crédit Agricole Indosuez and Morgan Stanley Dean Witter are launching the Eu2bn IPO of French ISP Wanadoo today (Friday) in the first test of investor appetite for internet stocks from the country since the disastrous LibertySurf offering in March. The sale of 100m shares is set to close on July 13. Pricing will take place over the weekend of July 15/16 following the Bastille Day holiday.

The planned A$4bn IPO of the insurance arm of NRMA could be halved, with fewer than expected NRMA members expected to sell their shares into the local and global bookbuilding facility. Latest indications suggest that only about 10% of the 2m members will sell their shares into the facility. This is half the original estimate of 20% and well below the 27% tendered for cash in the AMP flotation of 1998.

The Chinese government successfully completed its plans to tap the yen market this week, issuing its first Samurai for five years and demonstrating that the Japanese appetite for quality foreign borrowers remains strong. The bond, rated A3/BBB, was at the lower end of bankers' expectations, which had been for an issue of ¥40bn-¥50bn. The ¥30bn transaction was priced at par with a spread of 40bp over Libor. Launched by Merrill Lynch Japan and Nomura Securities, the issue has a 1.72% coupon.

Indonesia BNP Paribas Peregrine is global co-ordinator for the Hong Kong GEM IPO of Indonesian company Across Asia Multimedia, which is controlled by the Riady family, known for its connection with Lippo Group. The company is selling 180m shares at HK$3.00-HK$3.40 per share, raising up to HK$612m at the top end of the range, but before greenshoe.

Flextronics International sold about $650m of 10 year senior subordinated notes this week in the high yield market, offering investors the first chance to buy Singaporean corporate debt in the international bond markets since April. The electronics manufacturing services provider's transaction was heavily oversubscribed. Under rule 144A and reg S, the company issued $500m of 10 year paper with a coupon of 9.875%, and a Eu150m 10 year tranche with a coupon of 9.75%. Salomon Smith Barney and Morgan Stanley Dean Witter were joint bookrunners. Flextronics used the dual currency tranche structure in order to reach a wider investor base.

The possibility of a jumbo share placement from China Telecom (HK) drew closer this week as the company announced plans to buy seven mobile phone networks from parent company China Mobile Communications. ChinaTel already owns networks in six mainland provinces, and the additional seven franchises could cost close to $20bn, according to analysts in Hong Kong. Bankers in Hong Kong said an issue of at least HK$40bn could emerge, making the deal as large as, or possibly larger than the recent Unicom IPO. Goldman Sachs and CICC arranged the ChinaTel IPO last year and the follow on placement this year will be tough to dislodge.