Message-ID: <28012993.1075859661744.JavaMail.evans@thyme> Date: Fri, 10 Nov 2000 04:16:00 -0800 (PST) From: smarra@isda.org To: gilbert_adam@jpmorgan.com, arothrock@pattonboggs.com, charlessmithson@mindspring.com, chi-wing.yuen@aig.com, damian.kissane@db.com, dcunning@cravath.com, mengle_david@jpmorgan.com, dennis.oakley@chase.com, dmoorehead@pattonboggs.com, donna.matthews@ubsw.com, douglas.bongartz-renaud@nl.abnamro.com, ernest.patrikis@aig.com, francois@us.cibc.com, h.ronald.weissman@arthurandersen.com, henning.bruttel@dresdner-bank.com, hiroyuki_keisho@sanwabank.co.jp, isdalondon@isda.org, goldenj@allenovery.com, jerry.delmissier@barclayscapital.com, jonm@crt.com, jhb1@bancosantander.es, evangelisti_joe@jpmorgan.com, jcohn@cravath.com, kazuhiko_koshikawa@sanwabank.co.jp, kbailey2@exchange.ml.com, ksumme@isda.org, losullivan@isda.org, lmarshall@isda.org, maria.rosario@db.com, mcresta@cravath.com, marjorie.b.marker@arthurandersen.com, brickell_mark@jpmorgan.com, mark.e.haedicke@enron.com, mark.wallace@wdr.com, mcunningham@isda.org, masashi_yamagata@sanwabank.co.jp, maurits.schouten@csfb.com, milphil@gateway.net, paul.zz_wilkinson@wdr.com, quentin_hills@hk.ml.com, rgrove@isda.org, robert.mackay@nera.com, markb@cibc.ca, rpickel@isda.org, rryan@isda.org, rainslie@isda.org, sebastien.cahen@socgen.com, shawn@blackbird.net, skawano@isda.org, shigeru_asai@sanwabank.co.jp, scarey@isda.org, stevenkennedy@kennedycom.com, steve_targett@nag.national.com.au, teruo.tanaka@ibjbank.co.jp, tom.montag@gs.com, twerlen@cravath.com, tim.fredrickson@ubsw.com, fwhx9396@mb.infoweb.ne.jp, yhoribe@isda.org, yasumasa.nishi@ibjbank.co.jp, yoshitaka_akamatsu@btm.co.jp Subject: Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Scott Marra X-To: "'gilbert_adam@jpmorgan.com'" , Aubrey Rothrock , "'Charles Smithson'" , "'chi-wing.yuen@aig.com'" , Damian Kissane , Daniel Cunningham , "'David Mengle (JP Morgan)'" , Dennis Oakley , Don Moorehead , "'Donna.Matthews@ubsw.com'" , Douglas Bongartz-Renaud , Ernest Patrikis , "'George Francois (CIBC)'" , "H.Ronald Weissman" , Henning Bruttel , Hiroyuki Keisho , ISDA LONDON OFFICE , Jeff Golden , Jerry del Missier , Jonathan Moulds , Jose Manuel Hernandez-Beneyto , "'Joseph Evangelisti (JP Morgan)'" , Josh Cohn , Kazuhiko Koshikawa , Keith Bailey , Kimberly Summe , "Liz O'Sullivan" , Louise Marshall , "'Maria.Rosario@db.com'" , "'Marjorie Cresta (Cravath)'" , Marjorie Marker , Mark Brickell , Mark Haedicke , "'Mark Wallace (Warburg)'" , Mary Cunningham , "'masashi_yamagata@sanwabank.co.jp'" , Maurits Schouten , "'Michael Iver'" , Paul Wilkinson , "'Quentin Hills'" , Richard Grove , Robert Mackay , Robert Mark , Robert Pickel , Rosemary Ryan , Ruth Ainslie , Sebastien Cahen , "'Shawn Dorsch (Derivatives Net)'" , Shigeki Kawano , Shigeru Asai , Stacy Carey , "'stevenkennedy@kennedycom.com'" , Steve Targett , Teruo Tanaka , Thomas Montag , Thomas Werlen , Tim Fredrickson , "'Tsuyoshi Hase'" , Yasuko Horibe , "'Yasumasa Nishi (IBJ)'" , "'Yoshitaka Akamatsu'" X-cc: X-bcc: X-Folder: \Mark_Haedicke_Dec2000_1\Notes Folders\All documents X-Origin: Haedicke-M X-FileName: mhaedic.nsf ISDA PRESS REPORT FOR NOVEMBER 10, 2000 * Sri Lanka Plans To Deregulate Broking Industry * Battle For The Benchmark Is On * Swiss bank offers 'Gore' and 'Bush' derivatives Reuters - November 9, 2000 Sri Lanka Plans To Deregulate Broking Industry Sri Lanka plans to deregulate its broking industry and to allow for specialised brokers who will promote new risk instruments, the director general of the Colombo Stock Exchange (CSE) said. "We are looking at the deregulation of the stock broking industry to allow free entry and exit," Hiran Mendis told a forum of business leaders late on Thursday. In the current system, the CSE board advertises slots for broking licences and approves eligible applications. "We will allow brokers to do more investment banking, margin lending and dealing on their own account, and are also considering brokers doing their own underwriting," Mendis said. "Brokers' fees are too high due to the lack of diversification in activities," Mendis said. The CSE has been badly hit by an exodus of foreign equity capital this year due to an escalation in Sri Lanka's ethnic war. Average daily trading volumes were down to about 25 million rupees last month, half the volume from earlier this year. The key Colombo all share index opened around 493 on Friday, up from the low of the year of 427.62 in May but down from the year's high of 574.26. The CSE also plans to introduce derivatives , short-selling and securities lending from around September 2001. At present, Sri Lanka's 15 broking firms act only as agency brokers while having some leeway to extend margin lending facilities and to trade on their own account. Mendis said brokers would also be allowed to segment their activities, with some offering trading facilities and others, clearing and settlement services. "We also hope to introduce Internet trading in the next three-four months," Mendis added. ($1 = 80 rupees). Financial Times - November 10, 2000 Battle For The Benchmark Is On: The French government bond market has benefited from the launch of the euro, but possibly not as much as it might have liked to, according to market strategists. When the introduction of the European single currency did away with currency risk among the participating countries, France set out to topple Germany from its position as the benchmark provider for the European government bond market. Germany has maintained that position mainly as a result of the strength of its currency, the D-Mark, as well as the reputation of its central bank, the Bundesbank. But, with the first no longer an independent entity and the second stripped of its monetary policy remit, the battle for providing the new euro-zone benchmark has been thrown open. So far, the outcome is inconclusive. Market participants praise the French government debt agency France Tresor for its transparent information policy and efficient debt management at a time when falling budget deficits and windfall earnings from the sale of mobile phone licenses are reducing European governments' need to borrow. "It is certainly the case that the information policy of France Tresor is better than that of the various bodies in Germany," says Daniel Pfandler, bond strategist at Dresdner Kleinwort Benson. "But Germany remains the benchmark in 10- and 30-year issues, whereas in the two-and five-year maturities one could argue that France is ahead." France's deficit is expected to fall to 1 per cent of gross domestic product next year, excluding the projected receipts from UMTS mobile licences. Including those receipts, France expects a small surplus. However, there should be little impact on bond issuance as UMTS receipts - expected to amount to some Euros 20bn - are spread over several years. France has also embarked on an active debt management programme in order to boost liquidity even as financing requirements fall. That includes the activities of agencies such as the Caisse d'Amortissement de la Dette Sociale which re-finances the debt of France's social security system and will continue to be active in the market. But although France has emerged as the leading European issuer in some maturities and some types of bonds, many investors especially outside the eurozone, continue to regard Germany as the point of reference for euro-denominated government bonds. Germany's competitive advantage in the 10-year maturities is underpinned by the liquidity in the Bund futures market on Eurex, the Swiss-German derivatives exchange, which is perceived as the European market leader. But the French policy of releasing issuance schedules up to a year in advance with bond auctions held regularly every month is seen as superior to Germany's quarterly schedules. France has also traditionally provided a more regular supply of liquid issues over the whole range of maturities from 2-to 30- year bonds. "France has always had liquid issuance's spread much more evenly across the whole of the yield curve," says Nathalie Fillet, bond strategist at BNP Paribas. The five-year BTAN is now widely regarded as the benchmark trading at the same or a slightly lower yield than its German counterpart, the Bobl. France has also led the way in launching the first euro-denominated index linked bond, known as "OATi" and runs the most developed market for "strippable" government bonds - which can be split into their component parts of coupons and principal. Even so, French bonds in parts of the yield curve still trade at a spread over the German government's Bunds, meaning that France is borrowing at a more expensive interest rate than Germany. "The French curve offers more steady large issuances, it is very transparent and from the French Tresor's point of view, that should certainly be producing narrower spreads," says Padhraic Garvey, senior bond strategist at ABN Amro in Amsterdam. "But the French curve is regarded as a spread product, because the German market is seen as the anchor to the system for historic reasons." Mr Garvey said that this year, spreads between German bunds and other European government bonds have widened as a result of increasing worries in the market over the quality of European monetary union. Those fears were exacerbated by the relentless slide of the euro on the foreign exchange markets. Greece's decision to join the euro next year, while Denmark has decided to stay out, has further shaken investor confidence. The launch of euro notes and coins in 2002 is likely to help allay fears that monetary union could break up, and that is likely to produce tighter spreads between European government bonds. The Hindustan Times - November 10, 2000 Swiss bank offers 'Gore' and 'Bush' derivatives A SWISS bank is offering financial derivative called 'George Bush'and 'Al Gore' options made up of baskets of US company shares which could profit if their namesake wins the presidential elections. Vontobel, Switzerland's fifth-biggest bank, advertised the offers in Swiss newspapers today as the world awaited the outcome of the cliffhanger US vote. "On wednesday morning we decided to launch the George Bush product on the announcement of the first results of the elections, then during the day with the uncertainty over the winner we prepared the Al Gore product," a banking source said. The Democrat' product is made up of shares in pharmaceuticals company Merck and Co, mortgage loan specialists Fannie Mae and Freddie Mac, Devry Inc, Ballard and United Technology. End of ISDA Press Report for Monday, November 6, 2000. THE ISDA PRESS REPORT IS PREPARED FOR THE LIMITED USE OF ISDA STAFF, ISDA'S BOARD OF DIRECTORS AND SPECIFIED CONSULTANTS TO ISDA. THIS PRESS REPORT IS NOT FOR DISTRIBUTION (EITHER WITHIN OR WITHOUT AN ORGANIZATION), AND ISDA IS NOT RESPONSIBLE FOR ANY USE TO WHICH THESE MATERIALS MAY BE PUT.