18 Apr, 2019

Another Peril of Vertical Integration – URF

By |2021-09-24T10:43:35+10:00Apr 18, 2019|Bonds, Case Study|

The financial world has been littered with pieces discussing, generally in a distinctively disapproving tone, the true motivations behind the Evans Dixon Group and its New York-focused US Masters Residential Property Fund (URF).  Although we will not completely dissect the strategy’s positives and negatives since inception, there are some very obvious lessons to be understood. In isolation, the initial premise [...]

4 Apr, 2019

Yield Parity, Not Risk Parity

By |2021-09-24T10:43:35+10:00Apr 4, 2019|Bonds, Case Study|

Much has been said in recent months about the wider stability (or lack of) within Italian Banking. Likewise, the apparent unpredictability of US markets has also been well publicised.  BondAdviser has provided various comments on both topics in previous additions of Up the Curve, available here. Late last month, following a systemic selloff in risk assets, the 10-year government bond [...]

21 Feb, 2019

The Value of Independent Research

By |2021-09-24T09:18:37+10:00Feb 21, 2019|Case Study|

In the current unsettled times, with the financial and banking sector braced for more active and aggressive regulators and possible sweeping changes to operating models, the issues associated with reliable investor information and recommendations appear more relevant than ever. It is not that transparency from issuers is being brought into question, though it seemingly is. It is the murkiness with [...]

20 Dec, 2018

GE & AMP: Case Studies in Tactical Investing

By |2021-09-24T10:43:35+10:00Dec 20, 2018|Case Study, Education|

In April this year, the Banking Royal Commission prompted the first large company scalp with the resignation of AMP’s (ASX: AMP) CEO Craig Meller.  Mr Meller’s resignation followed revelations of serious misconduct by the institution for almost a decade and capped off a week in which its failures were brutally and publicly exposed. A few months later in the USA [...]

6 Dec, 2018

RCR Tomlinson: A Lesson in Project Risk

By |2021-09-24T10:43:36+10:00Dec 6, 2018|Case Study, Education|

The collapse of engineering group RCR Tomlinson (ASX: RCR) into administration on 23 November capped a remarkable fall for one of the oldest engineering contractors in the country.  However, whilst the appointment of administrators, that are set to carve up and sell off parts of the ailing business, surprised many in the market, company collapses in the construction industry are [...]

5 Aug, 2018

Will Major Bank Divestments Affect Hybrid Instruments?

By |2018-08-05T23:51:18+10:00Aug 5, 2018|Case Study|

With the Australian Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (the “Commission”) being unusually quiet recently following more reactionary and tabloid-friendly beginnings, we thought it might be a good time to consider what impact (currently) planned divestments by the major banks could have on hybrid valuations and risk. Although not directly prompted by the Commission, [...]

5 Aug, 2018

Central Bank Independence: A Cautionary Tale

By |2018-08-05T23:51:02+10:00Aug 5, 2018|Case Study|

Major central banks around the globe have, for some time now, been granted total independence in making monetary policy decisions in an effort to ensure the prioritisation of long-term economic health over more short-sighted decisions for political motives.  President Trump’s comments last week that he is “not thrilled” by recent increases in the Federal Reserve’s Funds rate has broken the [...]

19 Jul, 2018

India’s Loan Crisis: Lessons to be Learned

By |2018-07-19T02:32:23+10:00Jul 19, 2018|Case Study|

The Reserve Bank of India (RBI) has found itself under close scrutiny recently as a sharp divergence in Non-Performing Assets (NPAs) or “bad loans” reported by India’s state-owned banks plagues the Indian banking system, raising concerns over broader financial stability and inadequate regulatory diligence. The RBI defines a NPA as “a credit facility, in respect of which the interest and/or [...]

19 Jul, 2018

Rising Electricity Prices: Is Regulation the Spark We All Need?

By |2018-07-19T02:08:24+10:00Jul 19, 2018|Case Study|

Given the prominence of the Financial Services Royal Commission and increased foreign activity in the M&A space so far this year, regulators such as the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) have regularly appeared in our news feeds.  Last week, however, it was the Australian Energy Regulator (AER) and the Australian Competition and [...]

5 Jul, 2018

Death of the Listed Tier 2 Market

By |2018-07-05T04:36:13+10:00Jul 5, 2018|Case Study|

In Australia, there are two main forms of regulatory capital that financial institutions (FI’s) must hold to manage the risks inherent in their operations and ensure stability of the economy - Tier 2 and Tier 1 capital.  Tier 2 capital securities rank below senior debt but above Tier 1 capital in the capital structure. Most commonly Tier 2 capital is [...]