Paul Guire

1

ICAP
The role of the IDB.

• Paul Guire
• 17-19th June,
• World Bank Conference,
• Johannesburg.

2
The characteristics of an IDB.

• IDBs disseminate present price information to
  market practitioners.
• IDBs prices are unbiased , derived only from
  market driven forces.
• IDBs do not take positions.
• IDBs are regulated and are obliged to share
  equally and in a timely way the price activity.
• IDBs generally can tap into a global network
  across a wide spectrum of products.

3
The product range for a globalIDB.

• Foreign Exchange - Spot , Forwards , NDFs, FX
  options
• MMKTS - Deposits , CDs , Commercial paper.
• Derivatives - Fras, IRSs , Swaptions.
• Repos Govt Bonds , Domestic debt, Emerging debt
• Fixed Income - New Issues,Primary,Seconadary,
  Bond options.
• Commodoties / Energy - Fwd Contracts, Options
• Equities - Execution, derivatives,futures.

4
The power of networks !
Repo
Bonds
Forex
Swaps / Fras
5
The domain of the IDB.
Central Banks
Corporates
Commercial Banks
Foreign Banks
Domestic Banks
Investment Houses
Hedge Funds
Buy-side Customers
6
For or against IDBs ?

• IDBs deliver market
• transparency.

• Dealers can profit from opaqueness .

• IDBs provide timely price information.

• Dealers exploit anomalies of knowledge.

• IDBs speed of distribution is exponential.

• Dealers rely on limited distribution from a
  salesforce.

• IDBs provide consolidated pricing-often with
  mkt depth.

• Dealers offer only prices from their own
  inventories.

• Invariably the choice with dealers is one or the
  other.

• IDBs can offer both voice and system solutions.

• IDBs market products over a wider network.

• Individual dealers have confined networks.

7
The first growth !
Foreign exchange
Local Currency vs -
- US
- Euro
-Yen
- Local trading partner currencies.
8
Activity creates interest.Interest creates
activity Liquidity
- Money markets
- Forwards
- T-Bills
- Govt. Bonds
- Corp. Bonds
9
Liquidity sprouts confidence
-Liquidity
-Confidence
-Foreign investor interest

Intermediaries
10
The differing approaches.
Post-market set up
Pre-market set up
or
11
The ICAP approach !
- Assist Emerging countries.
-S. America, E Europe.
- Engage dialogue with Govt.
-Paraguay, Peru, Korea.
- Finetuned Tailored solutions.
- Promote solutions.
- Mexico, Chile,Ecuador.
- Willingness to enter into JV's
- USA / Poland / S Africa.
- Offer system / voice / combined solutions.
12
The global E-product range.

• US Treasury off the runs.
• Sovereign and Supranational Eurobonds.
• Corporate Bonds.
• Japanese Government Bonds.
• Australian Government Bonds.
• UK Government (Gilts) Bonds.
• Emerging Market Eurobonds.
• Eurobond New Issues.
• ZAR Government bonds (Most recent launch)

• US Treasury Benchmarks.
• US Agencies.
• European Govt Bonds.
• European Govt Bond Repo.
• German Mortgage Bonds.
• Sovereign Supra Repos

• Spot foreign Exchange
• Forward foreign exchange
• Central bank FX exchange Auctions.
• Domestic bond primary Auctions
• Equities

13
ICAPs Global Reach
etc
etc
etc
etc
etc
etc
etc
14
Thank You
www.icap.com