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EQUITY INVESTORS are looking forward to a couple of major privatisations from Portugal this year, following a string of successful state sales over the past two and a half years. The first deal is likely to be the strategic sale of a 5% stake in Eletricidade de Portugal (EdP), the electricity utility. Endesa of Spain and Germany's RWE are among the bidders. While Deutsche Morgan Grenfell and Credit Suisse First Boston are participating in the sale process.

THE ITALIAN privatisation programme is entering a new phase with the forthcoming sale of stock in AEM, the local electricity utility, coupled with plans for a sale of shares in Alitalia in the second or third quarter. Goldman Sachs has long been in position for the sale of stock in AEM, which should reach the markets in the coming months and raise $500m. The transaction will include a strong element of support from the domestic retail market.

* Crediop Overseas Guarantor: Crediop SpA

Argentina SBC Warburg has launched syndication of a $200m six month facility for Argentine national mortgage bank Banco Hipotecario Nacional.

THE BOOM in the equity linked debt market continued this week as international investors were offered two successful but contrasting deals providing them exposure to European equities. The first issue was an exchangeable launched by Allianz, the top German insurance group, via joint lead managers Dresdner Kleinwort Benson and SBC Warburg Dillon Read. Société Générale, Deutsche Morgan Grenfell, JP Morgan and Salomon Smith Barney as co-managers.

THE REPUBLIC of Argentina will today (Friday) make its 1998 new issue debut with an inaugural Ecu300m-Ecu500m five year bond that redenominates into euros once the single currency is adopted. The deal, led by SBC Warburg Dillon Read, is expected to be priced within a spread of 370bp to 390bp over the relevant OAT French government bond and is taking advantage of what appears to be a much greater receptiveness to Latin new issues from European investors than their US counterparts.

China China Eastern Airlines has mandated Chase Manhattan Asia to arrange a 10 year $166m US Exim backed financing to fund the purchase of four MD-90 aircraft at a cost of $41.5m each to be delivered in March, June, September and December 1998.

Australia Arranger Dresdner Kleinwort Benson Australia signed a $45m refinancing for Aurora Gold Finance on January 16 in Perth.

Market round-up Compiled by Gerard Perrignon, Hambros Bank Ltd, London. Tel: +44 171-865 1759

L-BANK, Südwestdeutsche Landesbank and Landesgirokasse announced this week that the three Baden-Württemberg based banks intend to merge from January 1 1999 to form a single public law institution -- Landesbank Baden-Württemberg -- which is intended to enhance their presence in the international financial markets. A merger of the institutions has been on the agenda for many years, but impending monetary union has persuaded what will be the owners of the new bank -- the state of Baden-Württemberg, the Savings and Giro Associations of Baden and Württemberg and the city of Stuttgart, the state capital -- to grant approval, in the hope of strengthening the region as a financial centre and improving the competitiveness of the three banks.

DRESDNER KLEINWORT Benson, Morgan Stanley Dean Witter and SBC Warburg Dillon Read are emerging as frontrunners for the mandate to float Neste IVO, the Finnish holding company, which will be awarded by the government next week. The company is being created by the merger of oil company Neste and power utility Imatran Voima (IVO), for which Dresdner advised Neste and SBC Warburg advised the government.