Last week the Australian Corporate Bond Company formally launched their Exchange Traded Bond Units ("XTBs") offering retail investors access to corporate bonds on the Australian Securities Exchange. This product will change the way investors participate in fixed income markets which were historically restricted to wholesale investors. Here is a list of XTB's available as at 19 May 2015: ASX Code Underlying Bond Underlying Issuer YTMAZJ [...]
The last two weeks have seen a severe decline in the price of bank shares, a steepening in the yield curve and a slight widening in Tier 1 regulated Bank hybrid securities. As an example CBA’s PERLS VII is off 6.5% from its issue price and the common equity is off 15% from its high ($96.30). This gives investors the following yield choices: CBA special deposit [...]
Over the past week ANZ, NAB , WBC and Macquarie have all reported their half year results and CBA provided a quarterly update. The theme is consistent across issuers with cash earnings remaining strong (although below inflated expectations), asset quality remained relatively stable (with the exception of a couple of outliers) but the key theme has been an increase in [...]
Over the past week we have witnessed a steeping of the yield curve (change in long term rates expectations), the RBA keeping interest rate traders happy with a rate cut, APRA changing the capital rules for banks (good for debt and hybrid investors), major banks kicking of their half year reporting and a few interesting pricing benchmarks. The yield curve relevant to our investor [...]
The Australian Banking sector has had a difficult few days on the sharemarket after APRA's (Australian Prudential Regulation Authority) Chairman Wayne Byres said the recommendation by the Financial Systems Inquiry on increasing mortgage risk weights can be “dealt with sooner rather than later.” To most people this means nothing at all but in technical terms it will make `it significantly harder for banks [...]
BondAdviser is an independent investment research company that specialises in bonds and fixed income securities. We provide investors, advisers, brokers and institutions with research, data, education and tools to help them invest intelligently. Our service is delivered online via an easy-to-use portal. At BondAdviser, our goal is to lift the lid on the fixed income market so that more investors [...]
The news over the past week continues to be dominated by macroeconomic headlines and debate over the current effectiveness of the RBA's monetary policy stance. Bond and hybrid investors have focussed on factors such as the first major bond default by a chinese property developer and hedge funds are circling Atlas Iron through a debt restructuring process. But before we dive into these factors we thought [...]
Last week, the credit rating agency S&P placed eight iron ore miners, including BHP Billiton, on negative credit watch after it revised its three-year price predictions for iron-ore, the main commodity used in steel-making. Table 1. S&P revised Iron-Ore price expectations (in USD per metric ton) 2015 2016 2017 Before 65.00 65.00 70.00 Revised prices 45.00 50.00 55.00 At the [...]
On the 8th April 2015, Royal Dutch Shell PLC announced a $70bn mega-merger with smaller rival BG, the third largest oil and gas merger ever. In the current low interest rate environment and falling oil prices, this should not come as a surprise. As OPEC and mainly Saudi Arabia have decided not to reduce their crude production and are trying to force [...]
It was a quiet news week in terms of fundamentals for fixed income markets but economic and technical news continues to flow. Over the past week we have had a very large new issue from ANZ (AUD$2.5billion), minutes released from the US Federal Reserve FOMC meeting, implications from the iron ore price collapse and the AOFM selling their first inflation linked [...]
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An employee-owned financial services provider focused on the Debt Capital Markets.
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