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SIGNS THAT Asian bond spreads may have begun the long, slow road to recovery have been gaining strength following a 10 day run which has seen benchmark sovereign issues from the region tighten in by an average of 150bp. Typical was the Korea 10 year bond, which narrowed from a spread of 700bp to 560bp. The Indonesia bond due 2006 moved most in absolute terms, from 1,800bp to 1,500bp.

* ABN Amro has become the 15th foreign bank to receive approval to operate a branch in Beijing. The branch is expected to open during the first quarter of 1999. ABN already has branches in Shanghai, Shenzhen and Hong Kong, as well as representative offices in Guangzhou, Tianjin and Wuhan. * Another bank pulled out of the Australian government bond market this week when Citibank closed its trading desk following the merger with Salomon Smith Barney.

CABLE & Wireless Optus will begin roadshows in Australia next week, followed by a week in Europe and the US before the deal closes on November 12. Pricing will take place over the following weekend before allocations on November 16, and trading commences on November 17. Merrill Lynch and Warburg Dillon Read are lead managers. Bankers are confident the defensive nature of the sector and the spectacular success of the NTT DoCoMo offer will rub off on the deal. Retail investors will pay A$1.85 a share. Based on Mayne Nickless' share price fall of A$1.50 since the entitlement period passed, the Optus share could go for up to A$2.80. However, bankers believe an institutional price of closer to A$2.50 is more likely.

THE INDIAN government has postponed the sale of GDRs for Container Corporation of India (Concor) but will press ahead with a sale in the domestic market and will retain Warburg Dillon Read in the lead manager role. Bankers said that the deal could take place rapidly, although they were uncertain over whether an agreement had been reached on pricing. Previous efforts to sell Concor shares have been scuppered by the government's determination to price close to the market level, despite a tiny free float artificially inflating share prices.

* Merrill Lynch has won a mandate to structure a commercial mortgage backed security for Wharf Holdings, one of Hong Kong's leading property companies. And Shine Hill Funding, the $500m securitisation for Hong Kong property company Great Eagle of a single mortgage on part of the Citibank Plaza building, may now come back to life.

* Moody's Investors Service has assigned a local currency issuer rating of A1 to the government of Hong Kong Special Administrative Region of the People's Republic of China. Moody's issuer ratings are opinions of the ability of entities to honour senior unsecured financial obligations. In the case of Hong Kong, the government has no direct obligations that are rated. However, Moody's has in the past said that A1 local currency ratings of two government-owned railway companies (the Mass Transit Railway Corporation and the Kowloon Canton Railway Corporation) were indicative of the government's ratings.

THE MALAYSIAN government this week embarked on its domestically-financed national rejuvenation programme with the launch of a first government-backed issue for bank recapitalisation vehicle Danamodal Nasional Berhad. The first in a trio of such deals, with the asset management company Danaharta Nasional Berhad and Infrastructure Development Corp (IDC) to come, traders reported that the M$11bn issue was rapidly snapped up by 57 financial institutions and is unlikely to trade heavily.

* The Republic of Romania was this week downgraded for the third time in less than six months, with Standard & Poor's cutting the country's long term foreign currency rating to B- from B+. In late May S&P had already downgraded Romania from BB- to B+ while in September Moody's Investors Service cut its rating for Romania from Ba3 to B1.

THE US high grade corporate bond new issue market staged a major recovery this week, with about $8bn worth of deals either priced or announced for the weeks ahead. Not only did more than $3bn worth of deals come to market this week, but the offerings tightened in spread on the break and included deals other than household names.

ARGENTINA is planning to launch another addition to one of its global bonds, probably within the next week, in a bid to make the most of a growing wave of positive sentiment in fixed income markets for Latin American bonds. "We will probably return to the market, but we have to see what happens to Brazil and how the markets evolve," said Argentina's public credit head Federico Molina, referring to market reaction to next week's long awaited announcement of Brazil's three year fiscal plan.

BRAZIL'S capital outflows slowed to a comparative trickle this week as the country reached agreement with the IMF on its fiscal plan and $30bn support package. The government announced it would release details of its long awaited three year fiscal plan in the middle of next week, after state governors go to the polls for the second and final time on Sunday.

* Uruguay and Chile both received the rare honour this week of an actual affirmation of their ratings rather than a warning. S&P affirmed Chile's A- rating and Uruguay's BBB+ rating on the belief that both were in good financial stead to weather the current emerging market storm. * Colombia, facing strong pressure on its currency and having failed repeatedly in recent weeks to issue peso denominated local debt at reasonable rates, has decided instead to offer $200m worth of dollar denominated domestic TES bills between October 28 and the end of 1998.