On the 21st of September 2017, S&P downgraded China’s sovereign credit rating (from AA- to A+), following a similar rating cut by Moody’s in May. This was just a few weeks before the 19th national congress in which the top leadership of the nation would be decided. China called the downgrade a “wrong decision” on the back of its perceived [...]
The fixed income market, like its cousins in equities and banking, has been one of the most avid adopters of technology over the last one hundred years. The most significant of which was probably the adoption of electronic trading platforms in the 1980s when automated computer servers gradually replaced physical trading floors and specialist software took over from manual processing [...]
In credit markets, both listed and unlisted securities allow investors to buy an asset and potentially earn a return. Listed securities are usually traded on an exchange platform (such as the ASX) whereas unlisted securities’ trading generally takes place in an over-the-counter (OTC) market. This article provides a basic comparison between the two types of instruments in terms of quality [...]
Although Australia is geographically distant from other major economies around the world, the continued economic and financial integration with other countries has resulted in marked changes in the Australian financial landscape, which is particularly evident in the fixed income market. Going back to 2000, 93% of non-government AUD bond issuance was from Australia-domiciled issuers, since then, offshore issuers have significantly [...]
In early July, a sole bidder purchased the entirety of the $800 million primary issue of new Australian government bonds with a 2029 maturity (12-years). This was the highest ever for a single bidder since official statistics started in 1982. In early September, another lone buyer purchased the entire $500 million issuance of government bonds in a single bid. To [...]
In July 2017, the UK financial regulator, the Financial Conduct Authority (FCA), which regulates LIBOR, announced that the global base rate would be phased out over the next four years, ending in 2021. Although it is unclear what will replace it. The London Interbank Offer Rate, LIBOR, is the benchmark interest rate that many of the largest banks in the [...]
As we have progressed through reporting season, credit fundamentals have broadly remained intact with strong balance sheets, high liquidity and conservative capital management policies. There have been no material deviations for our investment thesis with earnings being largely credit neutral across the spectrum. However, as always, there have been winners and losers in the equity market, which has highlighted the [...]
In an earlier article, we explored Ethical Fixed Income in Australia. In relation to this, an ethical product which is grabbing the interest of global investors are Social Benefit Bonds (SBBs). A social benefit bond (SBB) is an innovative way to match investors and outcomes which aims to better the wider society that we all live in via a targeted [...]
In Australia’s low-yield environment, higher-risk income securities (i.e. hybrids) tend to be more favoured for their attractive returns. However, the yield of a hybrid varies based on many factors. Perhaps most important are the assumptions of when the security will be redeemed or converted. Conventionally, hybrid securities are either called on their first call date (or each interest payment thereafter) [...]
On the 3rd August 2017, the Australian Transaction Reports and Analysis Centre (AUSTRAC) initiated civil penalties proceedings against the Commonwealth Bank of Australia (CBA) for ‘serious and systematic non-compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act)’. Alleged breaches of the AML/CTF Act include failure to perform risk assessment on CBA’s own Intelligent Deposit Machines (IDMs), failure [...]
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ABN 31 164 148 467 ‧ Important Information
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
