It turned out that the end of the world, previously thought to have been cancelled, was merely postponed; a few proponents of the Efficient Market Hypothesis (strong form) received bruises in the rush to the exits but, as they themselves noted, they probably would have got them anyway.
The day started well for fixed-income investors, with the Non-Farm Payrolls report showing that 92,000 jobs were created while unemployment crept up a fraction. James Hamilton at Econbrowser says it actually be worse than it looks, since it does not go far enough to contradict his other indicators. Other reactions have been compiled by the Wall Street Murdoch is Magnificent Journal.
The report was weak enough that even hawkish economists conceded a rate-increase might be further off than anticipated so Treasuries had a great day, closely followed by Canadas.
This exuberance does not extend to lending money to actual companies, however, especially not those involved in sourcing, packaging and selling mortgages. Employees of such firms hoping to get work processing redemptions from hedge funds were disappointed when another European fund halted redemptions.
All this crushed US stocks, while Canada had to deal not only with the US news, but also the fact that it doesn’t look like we’ll be able to go work at Telus, either. So Canada got squashed.
Speaking of Telus, they released their quarterlies today, and noted:
TELUS in July continued its assessment of whether it should potentially make a competing offer for BCE. TELUS has concluded this assessment and it does not intend to submit a competing offer to acquire BCE.
I’m still not convinced that Teachers / BCE story is over yet. I have convinced myself, however, that the secret of happiness is putting oneself into a position of not caring. Which is to say, not holding BCE Prefs.
Meanwhile, the preferred share market simply continued not reacting much to anything at all, but there was one notable exception. The Argus Preferreds, AR.PR.B, are tracked by HIMIPref™ for the very good reason that about ten years ago they were in an index for ten minutes. They were down 63.69% today (bid/bid) on no volume, as the already pathetic bid vanished. To be perfectly frank, I don’t know off the top of my head who owns Argus. Is it the soon to be bankrupt Hollinger or the soon to be jailed Lord Black? Whatever … this issue hasn’t paid its dividend for over two years, so it will be of interest only to hedge funds and scrip collectors.
The post regarding Malachite’s recent performance has been updated with figures for DPS.UN and a joke, so read it again. Read it many times!
| Note that these indices are experimental; the absolute and relative daily values are expected to change in the final version. In this version, index values are based at 1,000.0 on 2006-6-30 | |||||||
| Index | Mean Current Yield (at bid) | Mean YTW | Mean Average Trading Value | Mean Mod Dur (YTW) | Issues | Day’s Perf. | Index Value |
| Ratchet | 4.84% | 4.87% | 28,131 | 15.82 | 1 | -0.1652% | 1,033.9 |
| Fixed-Floater | 4.97% | 5.02% | 130,092 | 14.15 | 8 | -0.3249% | 1,024.2 |
| Floater | 4.87% | 0.39% | 73,752 | 8.22 | 4 | +0.0206% | 1,050.1 |
| Op. Retract | 4.83% | 3.94% | 83,551 | 3.44 | 16 | +0.0450% | 1,022.5 |
| Split-Share | 5.03% | 4.49% | 106,471 | 3.92 | 15 | +0.2070% | 1,048.4 |
| Interest Bearing | 6.29% | 6.82% | 61,292 | 4.63 | 3 | +0.3859% | 1,024.6 |
| Perpetual-Premium | 5.52% | 5.17% | 103,376 | 5.66 | 24 | -0.0270% | 1,024.8 |
| Perpetual-Discount | 5.08% | 5.11% | 313,647 | 15.31 | 39 | +0.0577% | 975.1 |
| Major Price Changes | |||
| Issue | Index | Change | Notes |
| BCE.PR.Z | FixFloat | -1.4622% | |
| BSD.PR.A | InterestBearing | +1.4333% | Recovering about half of yesterday’s loss. Now with a pre-tax bid-YTW of 7.59% based on a bid of 9.20 and a hardMaturity 2015-3-31 at 10.00. |
| GWO.PR.I | PerpetualDiscount | +1.5922% | Now with a pre-tax bid-YTW of 4.95% based on a bid of 22.97 and a limitMaturity. |
| CFS.PR.A | SplitShare | +3.4895% | Flight to quality with a vengeance! Now with a pre-tax bid-YTW of 3.40% (less than today’s gain!) based on a bid of 10.38 and a hardMaturity 2012-1-31 at 10.00. |
| Volume Highlights | |||
| Issue | Index | Volume | Notes |
| ACO.PR.A | OpRet | 78,070 | Global crossed 38,800 at 27.34 for cash at 27.34, then the same amount for regular settlement at 26.98. Ex-Dividend today for 0.359375. |
| BCE.PR.I | FixFloat | 26,640 | |
| BCE.PR.Z | FixFloat | 16,978 | |
| CM.PR.P | PerpetualPremium | 10,250 | Now with a pre-tax bid-YTW of 4.85% based on a bid of 25.81 and a call 2012-11-28 at 25.00. |
There were NO other $25-equivalent index-included issues trading over 10,000 shares today.
Zip. Zero. Zilch. There weren’t even enough issues trading in size to fill a table with five prime examples.
[…] Not the most active of days in the preferred share market, but at least trading was more inspired than it was Friday. InterestBearing issues did well and the PerpetualDiscount index continued what has been a fairly steady grind upwards since mid-July. […]
[…] On August 3, I reported: Speaking of Telus, they released their quarterlies today, and noted: TELUS in July continued its assessment of whether it should potentially make a competing offer for BCE. TELUS has concluded this assessment and it does not intend to submit a competing offer to acquire BCE. […]