Last month saw the highly anticipated summit between North Korean dictator Kim-Jong Un and President Trump come to fruition in Singapore, as the looming US-China “trade war” looks set to take place with tariffs placed on $50 billion of Chinese and American imports coming into effect from July 5th. In the domestic market the Royal Commission has continued on and [...]
With the US-China “trade war” fears fading away, the month of May 2018 became mostly a month of tit-for-tats between the US and North Korea with the possibility of a summit remaining quite high. US 10-year yields in response, dropped back below the important 3% level at the end of the month and credit fundamentals remain solid. The domestic market [...]
U.S. Federal Reserve chairman Jerome Powell loves an interest rate hike and is planning several of them. The recently-appointed Fed Chair is bullish on global economic health, stating that “the economy has strengthened” and in his view “inflation is moving up to target”. Direct statements like these from the moderate Republican have global markets pricing in 3-5 rate hikes in [...]
As discussed in a recent nabtrade interview with BondAdviser Director Nick Yaxley, the combination of equity market volatility and a low-yielding credit environment has caused investors to re-examine opportunities with the domestic ASX-listed hybrid market. Hybrids are a broad classification of securities issued by corporations that structurally contain both debt and equity characteristics, sitting below subordinated debt and above equity [...]
For the past few years, ASX-listed corporate debt and hybrid securities have dwindled leaving investors with a shrinking opportunity set to diversify outside the AT1 capital instrument market. This reduction in supply began with the Origin and Woolworths Subordinated Notes (ASX: ORGHA, WOWHC) being called at the end of 2016. This was followed by Caltex, Goodman and Tabcorp redeeming their [...]
Following a two-year long rally in trading margins, there has been increasing debate around the valuation (expensiveness) of Additional Tier 1 (AT1) hybrids. This notion refers to the true intrinsic value of these instruments which can be highly subjective among investors. There are many lenses that can be used in deciding whether an asset is either trading at fair value, [...]
In the realm of financial markets, a key topic of interest for many investors is performance attribution. Specifically, this refers to the individual components that form a security, portfolio or market’s total return over a pre-set time period. Depending on the required granularity of one’s analysis, the components can be broken down into many factors which can then be utilised [...]
Credit Performance... 2017 has been another strong year for the ASX-Listed Debt & Hybrid market with accommodative issuer fundamentals and strong market technical factors (demand and supply). Consequently, trading margins across most securities have marched lower, which has extended the almost 2-year tightening cycle since the last severe sell-off in February 2016. As a result (figure 1), 2017 has been [...]
In the Australian fixed income market, the vast majority of debt instruments pay interest periodically and repay principal upon maturity (or an optional call date), providing flexibility in managing cash flow and asset/liability matching risks. In comparison to the “interest only” payment structure, is another type of bond structure known as “amortising”, which distributes principal and interest (P&I) distributions periodically, [...]
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An employee-owned financial services provider focused on the Debt Capital Markets.
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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.
