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A TIDAL WAVE of market volatility broke across central and eastern Europe this week, causing bond spreads to widen alarmingly across the board and leaving a trail of dazed issuers, lead managers and investors in its wake. The woes of the region were best illustrated by the trading performance of the Russian Federation's $2.4bn 10 year transaction -- which ballooned to 910bp over Treasuries at one point on Tuesday from 329bp over last Thursday, tightened back into 400bp over on Wednesday, traded back out to 650bp yesterday (Thursday) before recovering to 528bp over by the close in London.

INVESTMENT bankers remain optimistic, if cautious, about the prospects for new equity issues for the rest of this year -- despite the slump in world stockmarkets this week.

THE INTERNATIONAL primary bond market shuddered to a halt this week as volatility swept across the globe, sending secondary market spreads rocketing. Many investors have closed their books early for the year and bankers predict little recovery in new issue volumes before the start of 1998.

INVESTMENT bankers remain optimistic, if cautious, about the prospects for new equity issues for the rest of this year -- despite the slump in world stockmarkets this week. With the primary market pipeline bulging -- with an array of transactions ranging from large privatisations and corporate IPOs to specialist stock and emerging market offerings -- investors are becoming more selective in their approach to new issues.

Market commentary Compiled by Brendan Goffinet, Hambros Bank Ltd, London. Tel: +44 171-865 1087

* Republic of Portugal Rating: Aa3/AA-

STANDARD Bank London Ltd has quietly arranged an innovative $75m foray into the syndicated loan market for Liverpool-based Meredith Jones funding the purchase of cotton from Uzbekistan. The facility, which is structured with 90% Uzbekistan risk, has been an outstanding syndication success with $133m raised so far and more to come.

Asset backed securities: * Haven Funding plc

Domestic issuance: * Emissionszentrale der Schweizer Gemeinden

CITISECURITIES launched an A$168.2m securitisation of Citibank mortgages in the Australian domestic market this week. The deal has a nine year expected maturity, and offers A$163m of class 'A' notes with an average life of 3.1 years, rated triple-A by Moody's and Standard & Poor's. The bonds will be priced between 24bp and 26bp over the one month bank bills swap rate on Thursday November 6. The senior notes are supported by A$5.2m of 'B' paper rated AA- by Standard & Poor's, with a 7.8 year average life. The indicative price range for the subordinated tranche is 39bp to 43bp over the BBSW.

TWO internationally targeted US credit card securitisations blew out this week as investors rushed for safe floating rate investments. Discover Credit Card Master Trust 1 Series 1997-4 came last Friday with a $500m senior class which was increased to $700m and then $750m, and was still oversubscribed.