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 [...]
Last week, global equity markets experienced a severe sell-off which originated for the US following better than expected wage inflation data. While this is generally an indication of a strengthening underlying economy, equity investors were spooked of the idea that the era of easy month (and hence the return of a free flowing economy) was coming to an end. As [...]
One of the fundamental functions of capital markets is to determine an appropriate pricing of risk – the process of finding that magical equilibrium where the capital surplus suppliers and the capital deficit demand side are mutually agreeable, representing the fair cost of capital, given all the available information. That is the theory anyway. In practice, determining an appropriate price [...]
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, [...]
Australia has long been a net importer of capital due to a low domestic savings rate and traditionally, Australia has always had a greater focus on equity and property, with debt capital markets receiving less attention. The participant mix of the fixed income market in Australia is also far from diversified when compared to other overseas markets – the supply [...]
On 10th January 2018, financial markets around the world took serious notice of reported “threats” from an unnamed Chinese official to slow down or halt the country’s US Treasury purchases. China, which holds approximately US$1.2 trillion of US Treasuries as part of its US$3.1 trillion in foreign exchange reserves and is America’s biggest creditor, is widely seen to be veiling [...]
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 [...]
The seventy-nine year-old luxury handbag retailer Oroton became the latest high-profile victim of the changing retail landscape in Australia, when it entered voluntary administration on 29 November 2017. Its’ stores will continue to trade and employ staff on a business-as-usual basis while administrators attempt to find a resolution, most likely through a white-knight buyer. Oroton first listed on the ASX [...]
In a quiet, yet potentially revealing fashion, an event not seen in the fixed income world for almost 20 years happened this week when US and Australian two-year government bond yields touched at around 1.75% on 28 November 2017. The explanation for this convergence is relatively simple: the Fed ultimately remains on track to raise rates in December and into [...]
Australia lags the world in lots of things and a fully mature, evolved capital market is one of them. We believe that not having one actually saved the bulk of Australia from the worst of the last credit crisis with only isolated, smaller players falling foul of poor investment decisions and fragile funding strategies. A ‘mature’ market is just so, [...]
An employee-owned financial services provider focused on the Debt Capital Markets.
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.
