Back in February 2016, trading margins of ASX-listed hybrid securities widened significantly. As a result, there were a number of attractive investment opportunities and following a relatively stable reporting season and shift in sentiment, margins began to retrace. While on the surface it appears margins are still tracking well relative to February, a more suitable performance measure would be to calculate [...]
The PaperlinX story never ends and continues to find its way into the media. For those who do not know, the PaperLinX Step-Up Preference Securities (ASX: PXUPA) initially listed in March 2007 and has been one of the worst performing securities in the ASX-listed debt and hybrid market over the past decade. The underlying entity, PaperlinX Limited, was hit hard by [...]
The BondAdviser Corporate Hybrid Handbook 2017 is designed to be a useful reference for ASX-listed corporate hybrid securities and the credit profiles of their underlying issuers. We believe there are a number of attractive investment opportunities across different corporate industries and the recommendation table below reflects our views on these particular securities. Corporate hybrids are overshadowed in a market dominated [...]
During the September quarter, the listed interest rate security market performed strongly with credit spreads across most securities tightening as investors continued to seek higher yielding investments against the backdrop of a low interest rate environment. Securities received a boost in August as the Reserve Bank of Australia (RBA) reduced the official cash rate from an already low rate of [...]
Bank hybrids have been issued in the Australian financial landscape for over 20 years in various forms. While drivers of performance have varied over this period, they are typically cyclical and have a recurring impact on security trading margins (albeit at different magnitudes). The focus of the article will be on what is technically known as an Additional Tier 1 [...]
In our second half outlook, “Where to from here?”, we expected Australian companies to report slightly weaker headline results (revenue) with profits remaining relatively stable for period ending June 2016. We also expected an increasing number of them to favour shareholder friendly measures or turn to acquisitions for growth as organic revenue growth will be difficult during a period sustained [...]
On the 17th of December 2015, the Australian Prudential Regulation Authority (APRA) released for consultation a draft version of the Prudential Practice Guide for Capital Buffers (APG 110). On the 30th of August 2016 APRA addressed the key response to this submission. The Australian Banking Association raised concerns over the ability of an Authorised Deposit-taking Institution (ADI) to make Additional [...]
Origin reported statutory loss of $589 million for the year ended 30 June 2016 which was a slight improvement on 2015 (loss of $658 million). The Energy Markets segment continued to drive the result as an improvement in natural gas volumes and margins, a stable electricity contribution (albeit slightly lower volumes) and expense management all helped the bottom line. The Integrated [...]
AMP Group (AMP) reported a Statutory Net Profit after Tax (NPAT) of $523 million, up 3.16% over the prior corresponding period (pcp). Cash profit was $513 million, down 10% on pcp, and was below expectations. The result was driven by higher claims experience (losses of $42 million) in the Australian Wealth Protection (AWP) business. Overall AMP operating earnings was $515m (down [...]
Crown reported a normalised EBITDA of $855 million (up 3.7% on 2015) in a year which produced a significant amount of volatility. Proceeds from the partial sale of their stake in Melco Crown Entertainment Limited (MCE) joint venture made the result look better than it really was but revenue and margins from the Australian Resorts segment (Casinos) were broadly in line with [...]
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