Alibaba switch hits Hong Kong

Yields on Greece’s outstanding paper, which have been on a downward trajectory for a while now, are around their lowest levels since the 2010 bailout – in the 6.75%–7% range in the 10-year part of the curve. And the Troika last week was sufficiently satisfied with the country’s progress to approve the latest disbursement of aid. Supported by whispers from inside the finance ministry, talk has been centred on issuance of €2bn of five-year paper, possibly before the European elections in May. That maturity makes sense, as it would fall between...

I WAS STAGGERED by the performance of recently installed Federal Reserve Chair Janet Yellen at a post-FOMC press conference last week. In response to a question from a Reuters journalist about the likely time gap between the end of Fed tapering and the hike of short-term US dollar interest rates, Yellen answered: “six months”. Alright, she said it in a roundabout fashion, but that was the main content of the assertion. Markets went a bit pear-shaped shortly afterwards, with stocks dropping and US Treasury bond yields rising in response. This...

Firms in the financial industry are set to spend more than US$100bn on information technology by 2018, with industry professionals expecting banks, asset managers and hedge funds to increase spending by more than 6% a year between now and then. Although spending has gradually been increasing in recent years, the rate of increase expected is more than double that seen since 2010, according to a study from financial services technology analysis provider Ovum. Firms spent US$76bn last year, but that figure is expected to grow by US$6bn every...

THE DECISION BY the UK’s Financial Conduct Authority to impose a draconian fine of US$1m (£662,700) on Mark Stevenson, a former prop trader at Credit Suisse Securities, and railroad him out of the industry for market abuse drew squeals of shock and bewilderment from market participants. They claim the regulator is making a scapegoat of someone for no apparent reason, save perhaps for having the audacity – the perfectly legal audacity – to try to front-run the Bank of England’s QE auction. No matter how you look at this, the decision is odd. The...

Regulatory reforms are spurring a rise in offshore loans for China’s private-sector companies even as mounting defaults in the onshore market highlight the risks involved in lending to lesser credits. Last week, five banks signed a US$650m three-tranche refinancing for China Fishery Group with an eye on launching the loan into syndication next month. A US$250m five-year loan for Haier International was launched last week, as was a US$100m two-year borrowing for UniTrust Finance & Leasing Corp. Those transactions came on the back of launches...

Hungary shrugged off concerns over Russia’s annexation of Crimea on Tuesday, completing its external borrowing needs for 2014 with a US$3bn dual-tranche deal. The transaction showed that despite the negative headlines, investors have plenty of cash they need to deploy and will do so if the right opportunity emerges. While investors are taking money out of Russia, they are putting it in solid sovereigns elsewhere in the emerging markets. “Whatever else has been going on, Hungary has been a beneficiary of the rotation of cash,” said Nick Darrant...

Systematic indices were hailed as the big investment story of 2013, but it turned out to be a tough year for many rules-based strategies that failed to live up to impressive backtests. Dynamic volatility, carry, and strategies linked to risk parity all suffered as markets reacted wildly to the Fed’s QE tapering discussions. “Most vol strategies are relying on trend patterns as signals, but QE and tapering has changed those patterns,” said Stephane Mattatia, head of global equity flow at SG. “Since the long-lasting put began to fade, we’ve...

The sway of better economics of whole-loan mortgage sales may still not be a strong enough reason to keep originators away from the US private-label securitisation market, which has suffered this year from a lack of issuance. The proven ability of private label RMBS as an effective tool to augment investment portfolios is pushing some originators to revisit the market after lengthy pauses. Last week, California REIT Redwood Trust, one of the most prolific issuers of post-crisis non-agency RMBS, announced a securitisation after almost four...

Investor protections on convertible bonds for dividends paid on common stock have become standard. Almost universally, holders are protected at the current dividend payout levels and receive additional compensation on any increases by gaining the right to convert into additional shares. However, the compensation generally is only one-way, with investors compensated on dividend increases but giving up nothing on decreases. The one-way protection can be problematic for high-dividend paying businesses that may be forced to cut common stock...

CBS Corp is moving ahead with the planned separation of its outdoor advertising unit, CBS Outdoor Americas, through a two-step carve-out IPO. The out-of-home media company expects to be structured as a REIT before the end of 2014, but has not yet secured the all-important private letter ruling from the US Internal Revenue Service to give it REIT status, and relevant tax advantages. “It is unlikely that CBS would move forward without good comfort of a positive outcome from the IRS,” said a syndicate source. “Even so, we don’t want to attract too...

For better or for worse an enormous bid for high growth stocks has levelled the IPO playing field. Once considered one of ECM’s toughest executions, clinical-stage biotechnology IPOs have become less reliant on structural props like insider participation to ensure successful execution.  ”Biotech IPOs are experiencing their broadest levels of investor participation since the early 2000s,” said a life sciences banker. Expanding order books have allowed bankers to approach execution more like a straight technology IPO, rather than the...

Seven banks have provided a committed and underwritten a loan of US$850m to finance part of the US$3bn leveraged buyout of US-listed Giant Interactive Group. China Minsheng Bank, BNP Paribas, Credit Suisse, Deutsche Bank, Goldman Sachs, ICBC International and JP Morgan are the banks underwriting the debt. China Minsheng committed US$182.5m, ICBC committed US$205m and BNP Paribas US$107m, while the other lenders have come in for US$89m apiece. The loan agreement between the borrower and the lenders is expected to be signed in the coming weeks....