Is HSBC Eying Merrill?
From New York Post Last weeks rumors of HSBC Holdings interest in Merrill Lynch were reported in the Financial Times. This week the rumors jumped the Atlantic to land in the New York Post. The paper quotes "a source close to the situation". HSBC is seeking a convincing presence in investment banking, according to the story. HSBC already has 10,000 investment bankers world wide but they are proving to be a well-kept secret.

Is Bear Stearns in Play?
From Crain's NY Speculation that Bear Stearns is the target of a "large bank" drove its stock price up nearly 13 percent on Friday. Bank of America and Bank of New York are being mentioned as potential bidders, said reports. The paper also reported that Rockefeller & Co. began managing the Enterprise Global Socially Responsive Fund, its first U.S. mutual fund, on Friday for the Enterprise Group of Funds.

U.S. Funds Lose Share in Japan
From Wall Street Journal U.S. asset managers are slipping in the Japanese fund market. Japanese fund assets at Goldman Sachs Asset Management are down 58 percent between December 1998 and this August, according to Putnam Lovell Securities, while assets at Invesco fell 56 percent and Morgan Stanley Asset Management's assets declined 25 percent. Some funds have made the most of the opportunity, though. Fidelity Investments has exploited a relationship with Nomura Securities to help grow its Japanese fund assets 388 percent and replace Goldman as the largest foreign fund company in Japan. Merrill Lynch Mercury has increased assets 58 percent. The study also found that while the number of foreign fund firms operating in Japan grew to 35 from 21 over the period, the assets that manage have fallen.

Fleet Reaches Summit
From Boston Globe FleetBoston Financial has agreed to purchase Princeton, New Jersey-based Summit Summit Bancorp in stock deal valued at $7 billion. The deal opens the Philadelphia and eastern Pennsylvania region to FleetBoston. Summit has $39 billion in assets and more than 500 branches. FleetBoston is paying $39.78 per share or a 16 percent premium over Friday's closing price.

CSFB Done Buying
From Financial Times Credit Suisse First Boston CEO Jim McCaughan says that the firm will not need any new asset managers after Donaldson Lufkin & Jenrette. The firm has all it needs "to be a powerhouse. There's no piece we need to grow." He added that no decisions had been made on whether any jobs will be eliminated. Beyond some shuffling of staff, he reportedly said that it was "very possible that no rationalization" would be necessary. He also said that the online brokerage DLJ Direct and its Pershing Securities clearing house would both offer it a route to new consumers in the US, he said.

Janus Sees Outflows
From Investors Business Daily It's official; Janus is projecting a net outflow of about $68 million from its stock funds, making September its first negative month in the past 37. Meanwhile, Vanguard and T. Rowe Price both reported strong inflows. "We're truly not surprised," spokeswoman Shelley Peterson is quoted as saying. Janus is blaming its large number of closed funds for the occurance. Janus saw inflows to both bond funds ($6.1 million) and money market funds ($45 million), but thos amounts failed to offset the loss in equity funds as the fund firm saw a $17.1 million net outflow for the month. Vanguard Group estimated a fund inflow of $3.4 billion into stock funds. T. Rowe Price reported "strong" U.S. stock fund inflow, but no specific numbers.

More on Record Flows
From USA Today USA Today picks up on the record fund flow story, reporting that through August fund firms had taken in $256 billion in new money in stock funds. The previous record for a full year was $232 billion in 1997, according to the Investment Company Institute. September flows were only $10.5 billion, says TrimTabs.com, up from $9.4 billion in September 1999. The sources of the cash, according to the article, are: 401(k) plans, stock options, and old-fashioned income.

Value Funds on Top
From Dallas News So much for tech funds and dot com mania, value funds ruled in the third quarter, according to Lipper. The average small-cap value fund rose 6.5 percent in the quarter. Also hot were sector funds investing in financial services (they gained 21.8 percent) and health/biotechnology stocks (up 12.1 percent). Losing sectors were telecommunications (down 5.9 percent) and overseas fund (off 3.2 percent). Worst were Pacific region funds (down 12.7 percent).

Wall Street Bonuses Expected to Set Record
From Crain's New York Business Bonus on Wall Street are at record levels despite a flat year in the stock market. Huge retention packages stemming from mergers are driving the bonuses, according to the report. Crain's reports that checks should be 30 percent to 35 percent greater than in 1999. Up to 4,000 Wall Street denizens will net $1 million or more and at least 100 will grab $10 million. Bonus pay for investment bankers who specialize in technology companies stands to be the richest, says the paper.

Sector Funds Blossom
From Barron's Fund marketers are increasingly turning from general funds to specialized funds in order to set their offerings apart in this crowded field. The are now roughly 900 sector equity funds counted by Lipper, an amount equal to 15 percent of all domestic stock funds. This number does not account for tech heavy aggressive-growth funds.

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