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European investors this week digested the first two courses of an extended banquet of mortgage backed issues from Australian lenders. Deutsche Bank sold $500m of bonds backed by Australian mortgages for Macquarie Securitisation Ltd, while Westpac brought the first Euromarket securitisation of New Zealand mortgages, in a $350.5m deal through Morgan Stanley Dean Witter. Both deals have been successfully sold, but the crowded market and rivalry between investment banks led to disagreements over pricing - now almost commonplace in the highly competitive international Australian MBS market.

Two triple-A rated European issuers took advantage of improving conditions in the Australian dollar market this week to bring A$1bn of new supply to the Kangaroo sector. Deutsche Siedlungs-und Landesrentenbank (DSL) took the market by surprise when it came first, on Monday, with a A$500m issue. DSL was followed on Wednesday by Kreditanstalt für Wiederaufbau (KfW), which launched an inaugural A$500m transaction.

Hong Kong Great Wall Technology appeared before the Hong Kong listing committee yesterday (Thursday), presaging a $120m to $150m offer within weeks.

Singapore's Land Transport Authority (LTA) made its debut in its domestic debt markets this week. Its offering provoked a strong response from investors, but caused displeasure among its general syndicate - all of whom, bar one, walked away from a formal underwriting commitment. The success of the deal from one of the strongest statutory board credits, was regarded as almost a given by most market participants, all of whom commented that final pricing was extremely fair.

The fate of two bond issues from the Philippines this week threw into sharp relief investors' markedly different acceptance of Asian corporate borrowers at either ends of the credit spectrum. Market participants commented that the contrasting reception to offerings by Ayala Corporation and Bayan Telecommunications Corporation (BayanTel) highlights just how far the region's bond markets have recovered since the financial crisis of 1997.

Share placements for Hongkong Telecom and China Resources Enterprises highlighted the precarious nature of the market's recovery this week. However, New World China's IPO looks set to be a success when it is priced today (Friday). While the Hongkong Telecom and China Resources deals were sold in under an hour and were well received by investors, both lost ground the day after their placements were completed.

Pricing for Korea Electric Power Corporation's (Kepco) inaugural euro-denominated bond is scheduled for Thursday next week, with strong indications of demand following initial investor presentations which began in Zurich this Wednesday. Although the BBB-/Baa3 rated group has set itself ambitious pricing targets in the low 100bp range over Bunds, bankers believe that the deal will close successfully as long as the company is prepared to meet investors half way.

The Nikkei's strong performance in recent weeks allowed Nomura to increase its sale of shares for Trend Micro to ¥80bn this week, while investors jostled for stock in Uni-Charm and anticipated the $600m sale of JR East. Bankers said that the main Tokyo index has gained around 30% since the beginning of the year, making it one of the best performing markets among OECD countries this year.

Telecom and internet plays continue to enthral the Australian equity market, and offerings for Hutchison Telecommunications Australia and Reckon Group are likely to open to strong demand next week. Salomon Smith Barney and Warburg Dillon Read will launch a A$280m IPO for Hutchison early next week, and bankers report that the deal has already generated considerable interest.

The FEDERATIVE Republic of Brazil opened the door to new possibilities for emerging market issuance in the euro sector this week when it sold a Eu700m three year benchmark offering — the largest ever euro-denominated bond launched by a Latin American issuer.

BRITISH STEEL is on the verge of mandating a group of banks to arrange a jumbo credit of between £2bn and £2.5bn that will finance a £694m special dividend to shareholders as well as support its merger with Hoogovens, the Dutch steel maker. Frontrunners in the race to win the deal are ABN Amro, Citibank, Dresdner and HSBC. Also thought to be close to the deal - but will probably come into the deal as co-arrangers - are Deutsche, Chase, Greenwich NatWest and Lloyds-TSB.

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