Global Finance

When the Mexican government moved to keep Mexico City mayor Andres Manuel Lopez Obrador (AMLO) from seeking the presidency next year, some 250,000 Mexicans took to the streets. The outcry forced the Vicente Fox administration to back off, consolidating AMLO's role as frontrunner for the Jul 2006 election. He will resign as mayor on Jul 31 to run for the PRD nomination in August. A populist, AMLO wants to tackle poverty, though analysts are encouraged by the fact that central bank independence...

Morgan Stanley's Purcell Feels Heat From Florida Ruling

Philip J. Purcell, the embattled CEO of Morgan Stanley, cannot seem to catch an even break. A Florida jury ruled last month that Morgan Stanley, the world's biggest securities firm by market value, must pay billionaire investor Ronald O. Perelman $1.45 billion, including $850 million in punitive damages. Purcell said the court decision was a great injustice and that Morgan Stanley will appeal. Purcell became CEO of Morgan Stanley in 1997, when Dean Witter Discover acquired the firm for $10.4 ...

Happy Honeymoon for New Head of Hewlett-Packard

Mark Hurd, CEO and president of Hewlett-Packard (HP), took the reins at the Palo Alto, CA-based computer firm only at the end of March, but already he is being given credit by some investors for turning the company around. Whether Hurd will be able to work the same magic at HP that he did at smaller National Cash Register remains to be seen. He has yet to reveal whether he will spin off the company's printer or PC units and concentrate on data warehousing.

Money Talks, Sir Roy Walks

Emotions flared in the UK last month when US billionaire Malcolm Glazer, owner of the Tampa Bay Buccaneers football team, gained control of Manchester United, the revered British soccer club. Sir Roy Gardner, who chairs Man U and whose day job is CEO of Centrica, the parent company of British Gas, let rip. He vowed to cut his ties with JPMorgan Chase because of the US investment bank's role in financing Glazer's bid. The Glazer deal will make Manchester United the world's most-valuable sports...

Milestones: Taking Note

Financial Leaders Call for Unified Regulation

In a damning speech, Paul Druckman, president of the Institute of Chartered Accountants in England and Wales (ICAEW), warned that "regulatory overkill" could destroy any hopes of convergence on both sides of the Atlantic, which could ultimately impede investment and job creation. At another conference on transatlantic convergence, in Luxembourg in April, James Leigh-Pemberton, chairman, Credit Suisse First Boston's European investment banking division, had called on financial leaders particip...

Regulators Act to Cut Costs of Compliance with Sarbox

US regulators took two steps to reduce the costs of complying with the Sarbanes-Oxley Act, saying that companies and auditors should use more common sense in applying the new rules on internal control over financial reporting. The Office of the Chief Accountant of the Securities and Exchange Commission (SEC) issued a statement that management is not required by Section 404 of the act to assess other internal controls. The overall focus of internal-control reporting should be on those items th...

Us Receives Bloody Nose From the Oas

Washington was dealt a blow when neither of its two candidates to head the Organization of American States (OAS) garnered enough votes. Instead, Chilean interior minister Jose Miguel Insulza was elected secretary general with support from most Latin American and Caribbean governments, ending the organization's most contested election since its founding in 1948. Insulza, elected for five-year term, is expected to focus on strengthening democracy and helping find solutions to issues of poverty ...

Emerging Markets

New Investors Still Face Old Hurdles in India

Plans for India's single biggest direct foreign investment project were in turmoil in mid-May after mining giant BHP Billiton, one of two potential investors, was reported to be pulling out of the $10 billion iron ore mining and steel manufacturing project in India's eastern mineral-rich region. The latest growth of figures reported by the Indian insurance sector are providing strong support to India's efforts to open up the sector to investment. Life Insurance Corporation of India reported 2...

Taiwan and China Play at Brinkmanship

Two of Taiwan's political leaders were met with enthusiasm from the Chinese people and the domestic media during recent visits to the mainland. Lien Chen in late April became the first chairman of Taiwan's Chinese Nationalist Party to return to the mainland since the party fled in 1949 to Taiwan. And James Soong, the leader of another of Taiwan's political parties, traveled there in May. Both reaffirmed commitments to peaceful reunification and continued economic cooperation, while China offe...

Riding the Ipo Wave

As the Brazilian central bank hikes the benchmark lending rate to curb inflation, resulting high interest rates are prompting a streak of initial public offerings (IPOs) on the Sao Paulo stock exchange (Bovespa), as corporates shun loans to raise financing through entity issuance. Companies have raised more than $1 billion through IPOs over the past year. With the central bank pushing the benchmark lending rate to 19.5% and oil prices remaining high, there are concerns that the country's reco...

Cover Story

Winning by Default

On Friday, May 13, the Argentine finance minister Giullermo Nielsen got the news he wanted: A New York court had thrown out an action by a small group of hedge funds seeking to impound $7 billion of defaulted Argentine eurobonds. In reality, the Argentine episode is just the latest salvo in a battle that has been raging for some two decades. In one camp stands the IMF and most of its developed country shareholders, marshaled in the G7 group. They want to develop a standardized, collective pro...

Corporate Financing News: Mergers & Acquisitions

Latin American Companies Seeking Us Takeovers

Companies based in Latin America are seeking to acquire US companies in order to buy into the fast-growing Hispanic market in the US, where 40.4 million Spanish-speaking people control $700 billion in purchasing power. With revenues of US-based Hispanic companies growing at an average rate of 20% a year, Latin American companies have come to realize that the best way to participate in this market is through corporate acquisitions, instead of just exporting their products. US financial service...

Corporate Financing News: Foreign Exchange

Dollar Bulls Run Again, As Us Economy Heats Up

The pieces of the US economic puzzle fell neatly into place last month, creating a picture of strength that enabled the dollar bulls to gain the upper hand. The euro dropped to 1.27 to the dollar, its low for the year, following the "shop 'til you drop" May 12, 2005, US retail sales report, which showed exceptionally large increases in sales of clothing and motor vehicles. Nevertheless, China remains the proximate cause for the long-term deterioration in the US trade balance, which is not exp...

Corporate Financing News: Corporate Debt

Spreads Widen As Investors Flee to Us Treasury Bonds

US companies will be paying more to borrow money in the wake of the widening of credit spreads between corporate and treasury bonds following the downgrading of General Motors and Ford Motor. US government bonds rallied in mid-May, amid worries that hedge funds were sustaining big losses in credit derivatives and collateralized debt obligations, analysts say. The recent widening in credit spreads was led by hedge funds buying protection in credit derivatives index products. Reintroduction of ...

Emerging Markets: Em Investor

Making It Pay

State Street to Manage Pan-Asian Bond Fund

Merrill Lynch Introduces Adr Index

Merrill Lynch has launched a proprietary index of American depositary receipts (ADRs), the MLADR index, comprising 180 large, actively traded stocks, many of which its analysts cover. The index is designed to present the opportunities that ADRs as an asset class offer to US domestic investors. The MLADR index, together with 10 sector sub-indexes, as well as European and non-European breakdowns, will allow a direct comparison with US sectors. By adding selected ADRs to their portfolios, domest...

Regional Report: Middle East

Awash with Liquidity

The near doubling of crude oil prices over the past 18 months has generated enormous revenues for the oil-rich states of the Middle East. Some blame hedge funds and other speculators for this. And while there are many plausible explanations for so sharp a rise in asset values -- notably, improvements at the geopolitical level combining with more mature and diversified economies to offer the prospect of sustainable growth -- there can be no doubting what is the primary driver of the current bo...

Country Report: Ukraine

After the Revolution

In the space of just six months, the world's view of Ukraine has changed beyond recognition. The man at the heart of this transformation is Viktor Yushchenko, a former governor of the central bank of Ukraine. In addition to his stint as central bank governor, he was Prime Minister from 1999 to 2000 and was widely credited with laying the foundations of Ukraine's current economic success. According to Tomasz Balamut, economist in the treasury department at WestLB, there are a number of explana...

Sector Report: Business Technology

Voicing Approval

Speech recognition software is best known for its presence in the call center space, driving advancements in customer relationship management. Interest in other uses for speech software is exploding. One area that promises greater efficiency is that of automated stock quotes and trades. There are two major areas that are of critical interest both in the speech recognition market itself and for clients and potential clients. The first is the development of more flexible voice user interfaces -...

Markets: Dubai

Money Magnet

The states of the Gulf Cooperation Council (GCC) and the United Arab Emirates may boast oil-rich economies with all the usual symptoms of prosperity, but historically companies in the region have had no real venue for raising money on the international capital markets. Dubai International Financial Exchange's (DIFX) CEO Steffen Schubert believes that the international financial reporting and corporate governance standards supported by the exchange will help it build a liquid market that is at...