Central and Eastern Europe 2009 League tables

Central and Eastern Europe* – a collection of countries that are as economically diverse as they are geographically close. As such, the region offers a fascinating laboratory for an analysis of the global downturn. Regardless of currency, size of economy or the level of reform so far undertaken, CEE countries have been hit hard by the disappearance of liquidity from the financial system and plummeting prices across asset classes. Membership of the euro is perhaps the most obvious characteristic that divides the region. Austria, Montenegro,...

Among all the central and eastern European economies, Triple A-rated Austria is by far the best regarded. However, it has been severely impacted via its exposure to its eastern neighbours, more so than other EU states due to the relatively small size of its domestic economy and the resultant exposure of its banking system. The sovereign has seen its 10-year bond spread widen from plus 40bp to a peak at plus 128bp over Bunds between last autumn and February 2009. While this hasn't particularly hampered the ability of Austria to fund itself...

The birth of the government-guaranteed senior debt market in October 2008 was intended to rejuvenate investor confidence and keep the supply engine humming in financials. Its rise to prominence has been steep. In the euro market, Austria became the tenth jurisdiction to utilise the government-guaranteed senior funding route, an asset class which was inaugurated by the UK’s Barclays Bank. Erste Bank opened the guaranteed senior market in Austria in mid-January, raising €1.5bn in two-year maturity. The Triple A rated, fixed-rate transaction was...

Even when the iron curtain still hung across the region, the countries of Central and Eastern Europe were not economically uniform. The Czech Republic, for example, was always better off than Romania, and the macroeconomic outlook in Slovenia always a little less grim than in Bulgaria. It reflects the variety of approaches and experiences that the introduction of a market-based system has not swept away. This diversity also explains why not all of CEE has been equally hard hit by the downturn. “Central and Eastern Europe is not just one...

Currencies in Central and Eastern Europe are coming under increasing pressures as economies weaken in the face of continuing market deterioration. Recent discussions at European Union and country level have focused on the potential softening of euro membership criteria to accelerate the entry of Hungary, Poland and the Baltic states of Latvia, Lithuania and Estonia into the euro. This has been brought about by the need to protect countries from continued currency depreciation and financial instability. European Central Bank president,...

It is amazing to recall now that the IPO by Czech coal mining group NWR was more than seven times covered and priced at the top of the range at the beginning of May last year. That encouraged the Polish government to prepare five privatisation IPOs and selldowns, including energy group Enea, banking group BGZ and chemicals maker Zaklady Azotowe Tarnow. But, even before the banking crisis got into full swing in September last year there were signs that investor sentiment towards Central and Eastern Europe was beginning to wane. The Z294m (US$117...

The overall volume for futures and options in 2008 showed a dramatic change from previous years. Volume growth globally had been close to 20% in 2006 and over 30% in 2007, with exchanges in developed and emerging markets both driving growth. Last year’s volatility disrupted this momentum and growth fell back to around 14% globally. Europe accounted for a 23.65% slice of this – up significantly year-on-year as Latin American volume collapsed. During 2008 counterparty risk soared to the top of investors’ list of concerns. Indeed while the...

Nowhere has been immune to the general decline in financing. But in Central and Eastern Europe growth oriented investors continue to target opportunities in what remain economies with long term growth prospects. CEE deal flow grew from 27 buyouts in 2005 to 39 a year later and 46 in 2007, when the market peaked, before falling back to 35 deals last year. The relative resilience is in part down to the fact that activity rose from a very low base in recent years. "There is no point pretending that its 2006 again, but there are sponsors active...

The equity-linked market in Europe began to slow in the summer of 2008, following a glut of issues in May. Issuance became increasingly patchy and exotic. A €573.4m LT2 convertible bond issue from Bank of Cyprus in July was the last fully-marketed bond of the year as conditions became increasingly challenging for issuance. Equity market volatility surged as the year went on, yet for a product that sees volatility as an asset, levels were too high. At the same time equity values were falling and most companies felt, at that point, their stock...