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China ING Barings, NatWest Markets and Sanwa Bank are arranging a project financing for the Changsha Power Project in Hunan Province, China. The total project cost is around $715m.

THE UK cable company, Telewest, proved itself to be a shrewd observer of the markets by issuing a £300m convertible bond this week, taking advantage of record levels of demand for equity linked securities to retire some relatively expensive 9% and 10% bank debt. Telewest, which has seen its stock price soar in recent months, used its broker Dresdner Kleinwort Benson to sell the eight year bonds.

ACTIVITY IN the UK primary equity market is set to pick up sharply with a wide variety of IPOs due to be launched from a number of well known groups and relatively unfamiliar growth stocks over the coming weeks. Merrill Lynch has won the books to lead the IPO of shares in Morse Computers, a provider of technical software systems.

RECENT rallies in internet stock prices show there is more than enough life left in the sector to sustain current valuations and perhaps create a few more hot performers. But the huge swings experienced by many internet stocks, even market favourites, have left analysts increasingly worried that the long-predicted shake-out is becoming imminent.

NEW ISSUES dominated the US market this week. Despite a wobble on Wall Street early in the week, the first quarter of 1999 is fast shaping up as one of frenetic activity. Although technology stocks and established names remain favourites with investors, there is an increasing number of middle and small cap companies lined up for the next few weeks as the IPO market starts to broaden out.

GLOBAL co-ordinators Argentaria and Merrill Lynch have successfully executed the $200m sale of stock in Transportes Azkar, the Spanish parcel delivery firm. The shares were priced at the weekend at Eu11.25, a level which represented the top end of the range given to institutional investors. Retail investors were sold shares at a fixed price of Pta1,790.

THE BATTLE for new equity capital markets business between international and local investment banks in Germany is becoming increasingly intense. This week Veba, one of Germany's largest industrial groups, announced that it had appointed Dresdner Kleinwort Benson and Warburg Dillon Read to act as joint global co-ordinators for the flotation of Stinnes, one of the world's foremost groups in the field of haulage and logistics. ABN Amro Rothschild is advising Veba on its plans to list Stinnes' shares. The process will begin at the start of the second quarter when marketing to local and international investors should start.

THE GERMAN Neuer Markt -- one of the fastest growing sectors for primary equity issuance in 1998 -- is set to host a huge number of small IPOs for hi-tech and companies from other growth sectors in the weeks to come. Deals to be launched imminently include the IPO of PrimaCom. Morgan Stanley Dean Witter is the sole bookrunner for the deal. The mandate is a coup for the US firm as the market is largely dominated by German banks, with some competition from Goldman Sachs.

INTERNATIONAL investors are diversifying away from Asia and Latin America and putting their money into central Europe in search of growth opportunities. This was the clear view being expressed this week by equity capital markets professionals looking at the response to the first deals of the year from the region and a potentially interesting calendar of new issues over the next few months.

* EFG Hermes is to lead manage the $130m sale of equity in Orascom Construction Industries (OCI), the Egyptian building group. The deal will involve the flotation of around 14% to 15% of OCI's equity capital and early indications of interest represent an encouraging sign of investor confidence in the region.

THE BLOW-OUT convertible bond launched this week for Axa, the insurance group, further underlines the dominance of French issuers in the fast growing market for euro denominated equity-related debt. In the first six weeks of 1999 an array of France's best known groups -- including Vivendi, Promodes, Bouygues, Artemis and Moulinex -- have used the equity-related market to capitalise on the huge interest in the euro from international investors and the growing demand for convertible and exchangeable debt as an asset class. The Axa deal involves the sale of Eu1.32bn in 15 year subordinated convertible bonds.

EURO SWAP spreads against cash tightened this week. Ten year spreads against Bunds came in to 35bp bid and to 28bp over OATs, while swap rates were generally firmer in line with weakness in underlying bond markets. Dealers are trading on the belief that spreads to cash will tighten yet further. These conditions do not suggest ideal conditions for borrowers wishing to issue debt and swap out of fixed euros and therefore at the end of the week, the pipeline was looking fairly thin.