So long a lender, the IMF is preparing to change tack and embark on a new role – that of surveillance monitor and adviser. The IMF has lost a lot of relevance for investors because it has become an outsider. For those Fund clients with the longest memories, and especially those in Asia, the transformation the agency is now forcing on itself smacks somewhat of the school bully suddenly hoping for a role as milk monitor. Looking to its traditional heartland of Latin America offers the Fund no further solace, with traditionally big borrowers...Read more
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The International Monetary Fund is struggling to find a role in the global capital markets, which have all but forgotten all the useful work it did in the past. It has been several years since a part-time global economic fireman has been required and the IMF needs to refocus much more on the day job of surveillance and data collection. James Crombie reports.
In what seems like a bad case of deja vu, EM investors are once again hunting for yield among lower-grade corporates and local markets, as external debt re-approaches historic tights. But rich valuations are worrying some participants who feel the market is not pricing in unexpected bad news and could be setting itself up for another fall. Paul Kilby reports.
Boosted by strong economies and large currency reserves, LatAm sovereigns have turned their backs on multilaterals as memories of financial crises fade. While the IMF is left twiddling its thumbs and looking for a new role in the region, development banks such as the IDB are adapting to the new reality by expanding capabilities in private sector transactions and local currency financing. Anthony Dovkants and Paul Kilby report.
“Best Case Scenario and Best of Times” is how Mauro Leos, Moody’s sovereign risk officer, described recently to Argentine corporate executives and bankers the context within which Argentina’s economy has been operating over the last four years. Strong global growth, rising commodity prices and a benign interest rate environment coupled with a surge in exports and GDP have helped fish the economy from the depths of the biggest sovereign default ever. Dan Shirai reports.
Banks have little choice but to do as the Brazilians do and come up with ways of bringing foreign investors to the country's shores as Latin America's biggest economy rapidly and aggressively opens up its US$470bn local debt market. Anthony Dovkants reports.
After a sluggish start to 2006 Russian Eurobond supply picked up impressively with 30 corporate and bank deals raising over US$8.5bn. Issuance slowed to a trickle during the May/June EM correction and traditional summer lull but supply is poised to take off again with loan market indigestion boosting bond activity while the rapidly expanding securitisation market will take a growing slice of the issuance cake. John Weavers reports.
The IMF annual meetings should provide an opportunity for around half of the countries yet to reach an agreement with Iraq on its restructuring to do just that, and fall into line with terms set out in November 2004 by the Paris Club. The countries that fail to strike a deal in Singapore should sign up by the end of this year, leaving the country free to concentrate on reestablishing its financing credentials. Richard Jory reports.
Emerging European ECM continues to explode, with volumes exceeding US$15bn by mid-August. But the dependency on Russia for volume is growing. Only two years ago the majority of ECM volume was coming from other countries, such as Poland and Turkey. Factors specific to those countries have significantly diminished activity, but ECM teams are still growing thanks to the realisable potential of Russia, writes Owen Wild.
As ever more investors seek double-digit returns, the Asian private placements loan market is growing rapidly. But as more seek to move into this lucrative market, spreads are moving lower and structures are loosening. Consequently, some investors are eschewing syndicated private deals and sourcing and structuring their own. Luc Mongeon reports.
From their position as supporter of local liquidity after the financial crisis that hit Asia at the end of the 1990s, domestic bond markets are now an established funding base for most of the region's active corporates, banks and other financial institutions. Joseph Radford reports.
Even if the possibility of a widespread financial crisis like the one that battered Asia almost 10 years ago seems remote at this stage in the region’s history, there is little doubt among economists, analysts and bankers that Asia and the other emerging markets of the world will never stop needing a lender of last resort. Savita Iyer reports.
The Asian Development Bank has made the development of local currency markets in Asia one of its priorities in the drive to shore up the region's abilities to withstand financial crises. The intent is allied to ensuring the kind of transparency and, in turn, mobilise savings to buttress the region's financial markets. William Rhode reports.
Yank the bank is the latest phrase to hit the project finance market. Charming language indeed but it is all getting very competitive and the sponsors are on top - for the moment. Banks not playing ball are getting yanked. Rod Morrison reports.
Since the 2003 Gulf war, the Turkish syndicated loan market has enjoyed a remarkably successful run with larger and cheaper loans. However, on the back of a yawing current account deficit that sparked a sell-off in the equity and bond markets earlier this year a usually calm loan market wobbled and pricing edged up. However, this is likely to be little more than a blip with lenders still positive towards the country. David Cox reports.