1998-Paribas Annual Report - BNP Paribas

Fundamentally focused on intermediation –
which accounted for over 90% of total revenues
in 1998 – Paribas restricts trading for own
account to the volume necessary to ensure the
success of its clients’ transactions. Coupled with
rigorous risk- and cost-control, this strategy has
enabled Paribas to limit the impact of the crisis
in emerging markets and Russia last year.
Primary Market
In the primary markets, the number of issues
was particularly high in Europe. Paribas ranks
eighth among book-runners of international
equity issues (source: Capital Data) and third in
international convertible bond issues (source:
Capital Data). As the markets are increasingly
dominated by a shrinking number of world-class
players, Paribas is particularly proud of these
performances. The 1998 launch of euro-denominated
convertible bonds will be followed
by additional initiatives this year.
The many transactions lead-managed by Paribas
in Europe last year comprise:
• in Italy, the very first issue of euro-denominated
convertible bonds, for Parmalat, in February
(see Focus),
• in Germany, on the Neuer Markt stock
exchange for high-growth companies, the successful
IPO of Brokat, an internet technology
specialist, and the capital increase of Mobilcom,
an independent telephone operator,
• in France, the second tranche of the gradual
privatization of France Télécom, combining a
capital increase, the sale of additional shares by
the French State, and the largest issue of
convertible bonds ever carried out in Europe.
In the highly active European secondary equity
markets, Paribas has continued to strengthen its
positions with institutional investors around the
world. The Bank improved its ranking in
European equity sales.
In Japan, to complement the success of its quantitative
products, Paribas is launching traditional
brokerage activities, based on sector research.
Reflecting the financial crisis, trading volume
dropped in emerging markets, which represented
less than 10% of revenues in 1998.
Headcount was reduced by 90 people, and the
activity was restructured to offer investors global
coverage of the emerging markets, along regional
or sector lines.
TRADING VOLUME
IN THE SECONDARY
MARKETS
(in € billion)
37.5
66.9
1997 1998
Euro-denominated
bonds convertible
into shares
Paribas entered the
euro-denominated
convertible bond market
in 1997, and carried out
its inaugural transaction,
on behalf of Italian dairy
producer Parmalat, in
February 1998. This has
been followed by several
other issues, for
Swiss Life, the Republic
of Greece and, more
recently, for Deutsche
Bank, which raised
funds through the issue
of bonds convertible into
Allianz shares. With the
emergence of the euro,
this market segment
should post particularly
strong growth.
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