Last week we entered the holiday period which is generally categorised as quiet for all financial markets. So, what can we expect over the next two months before reporting season commences once again in February 2017? As many companies in Australia shut down for the majority of the holiday period, primary market activity is limited. This is especially prominent in [...]
Over the past decade there have been a number of securities that feature the option to convert into ordinary equity at a pre-defined date. The conditions that trigger convertibility vary with each security but given this exposure, the price of security can be impacted by the underlying share price. The ratio of shares the investor receives for each security is [...]
Although the RBA has been engaged in the cutting cycle since 2011, many market commentators are suggesting we have now reached the bottom of the interest rate cycle. The last few rate cuts have had little impact on their intended mechanisms and rather just fuelled property prices further. If the recent uptick in commodity prices is maintained, upward pressure on [...]
This week brings the key November US non farm payrolls report. Market expectations are for a strong increase in employment (~175,000), an acceleration in wage growth (2.9%) and lower unemployment (4.8%). If the data meets (or exceeds) expectations, we would expect the interest rate futures market to increase the probability of further rate hikes in 2017 which would lead to [...]
Following the surprise election of Donald Trump as the next President of the United States, bond markets around the world have been sent into chaos. With many of Trump’s policies reflecting a pro-growth agenda, inflation expectations (a primary driver of long term interest rates) has surged taking both the Australian and US 10-Year government bond yield along for the ride. [...]
In December 2014, the Australian Prudential Regulation Authority (APRA) wrote to all Australian Deposit-Taking Institutions (ADIs) stating that mortgages should be stress tested under the scenario that interest rates rise at least 2% above current loan rates, setting the minimum rate (floor) at 7%. This suggestion highlighted that serviceability tests should be calibrated at an interest-rate set at a level [...]
In Australia, many investors fail to reap the benefits of geographical diversification. The international fixed income market is more than 10 times larger than the Australian market and offers a greater variety of sectors and industries. As foreign fixed income instruments are generally denominated in the base currency of country of origin, the primary deterrent of international fixed income is [...]
Yield curves are steepening across the globe and Australia is no different. Stoked by fiscal changes inflation is the primary driver and the next focal point is the Fed. Pricing for a December Fed funds rate hike remains firm at 80%, supported by comments from several FOMC officials recently. FOMC voter Bullard, as well as non-voters Lacker and Williams, have [...]
With the September bank reporting season now complete, several common themes have emerged across the sector that we expect to continue to play out over the next twelve months. Earnings increase but margins remain under pressure and growth targets lowered. Although cash earnings for Australian banks remained robust during 2016 revenue growth is becoming difficult, suggesting the earnings cycle may [...]
With ~$4.7 billion of net issuance of ASX-listed debt and hybrid securities in 2016, investors have not been short of supply but with three large-scale hybrids due for redemption before years end, where will this maturing capital go? Figure 1. 2016 Transactions Date Ticker Issuance ($m) Replaced ($m) Net Issuance ($m) 30-Mar-16 CBAPE $1,450 PCAPA - $1166 $284 7-Jun-16 PPCHA $100 PPCG [...]
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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.
