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A commonly-asked question in financial modeling refers to the minimum number of stochastic factors that must be included in the model in order to properly capture the price and risk behavior of financial instruments.

BANKERS connected to NTT DoCoMo's $15bn IPO have conceded that the float may be detrimental to the health of the Nikkei but despite a loss of over 800 points in the last five days most bankers believed the sale would be successfully completed. But with fund managers shying away from increased exposure to the Japanese market * and to almost all world markets * many would-be NTT DoCoMo buyers have had to sell existing Japanese stock to purchase what many consider to be a likely outperformer of the index.

China/Hong Kong Moody's has lowered Citic Pacific's long term credit rating from Baa1 to Baa2, citing its weakened financial position resulting from a "relatively high level of leverage, as well as the negative impact on its business performance of the sharply deteriorating operating environment in Hong Kong and elsewhere in the region."

THE LAUNCH of the $300m World Bank guaranteed deal for the Electricity Generating Authority of Thailand (EGAT) has been pushed back to next week, fuelling fears that one of the Asian bond market's last remaining lifelines may be about to be cut. Specialists said that failure to launch the deal earlier this week, taking advantage of a window of certainty, has left it a hostage to wider market volatility.

ONE ISSUE preoccupied the minds of structured finance professionals in Japan this week -- the bankruptcy of Japan Leasing Corporation. Japan Leasing was the most prolific non-bank securitiser in Japan, completing four public international deals in the last two years, as well as several domestic transactions.

AFTER a three year wait, Cable & Wireless Optus has finally outlined the shape of its A$2.5bn capital raising, and while few bankers doubt its success a lengthy delay before the institutional bookbuild starts could leave the sale open to market risk. A total of 1,026.9m shares will be sold, with 375m new shares being sold by the company, 95m existing shares being sold by AMP and National Mutual and a further 556.9m existing shares offered by Mayne Nickless to its shareholders.

Australia National Australia Bank (NAB) has successfully completed its US retail-targeted preference share issue. Having been forced to reduce ambitions of raising up to $1bn, the bank nevertheless managed to exercise the greenshoe to a reduced $400m issue, bringing the overall transaction size up to $450m.

THE MOOD in the US new issue market darkened again this week as the New York and Nasdaq stock exchanges suffered heavy losses, with banking and technology stocks bearing the worst of the decline. Although the success of Internet retailer eBay's Nasdaq listing last week had encouraged other companies to think about testing the market, the pick-up in confidence was shortlived.

* General Electric Capital Corp Rating: Aaa/AAA

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THE LATEST phase of the stockmarkets' downward spiral started not with a bang, but with a whimper. When, on Tuesday, all eyes turned to Fed chairman and global central banker Alan Greenspan to stop the rout with a 50bp rate cut, the response was just 25bp. Although some were hoping for a bigger cut and the equity markets promptly went into reverse again, the move sent a positive message to bond markets around the world and government bonds rallied strongly with record low yields attained in most major markets.