As long as the dividend tax rate remains a political football, the US will never have a decent preferred share market:
Senate Democrats are seeking to set the top tax rate on dividends at 23.8 percent, almost 20 percentage points lower than the proposal offered by President Barack Obama in his budget.
That detail, along with a top estate tax rate of 45 percent and a one-year patch to prevent the alternative minimum tax from affecting millions more families, are part of the written version of Senate Democrats’ attempt to extend expiring income tax cuts for one year. The core of the proposal would extend the George W. Bush-era cuts through 2013 for 98 percent of households while letting them expire on income above $200,000 for individuals and above $250,000 for married couples.
There’s more finger-pointing with Barclay’s / LIBOR:
A former executive of Barclays who has been blamed for ordering subordinates to submit false interest rates in 2008 says he believed his action had been sanctioned by the Bank of England.
Jerry del Missier, a Canadian, told a Parliamentary committee on Monday that he drew that conclusion from a conversation with the bank’s chief executive, Bob Diamond. He insisted that he believed he had done nothing wrong.
It’s entirely believable. It’s the oldest trick in the book … the boss expresses a vague notion that it would be nice if something happened … and eager subordinates fall over each other to put a smile on the boss’ face. “Who will rid me of this turbulent priest?”
I wonder if it will occur to any of the investigators to wonder just why nobody thought it was odd that Bank of England would counsel somebody to lie.
The Globe has a long story today on Canada’s Vanishing Tech Sector:
High-tech names have been vanishing from the radar in Canada at an alarming rate. Last year, 45 Canadian tech firms were snapped up by foreign buyers, up from 32 the year before and less than 15 per year in the mid-2000s, according to Branham Group, an Ottawa market research firm.
Worse, most of those companies are selling out too early, before they have a chance to grow into larger, global businesses that could fuel further innovation and success in the tech sector, say industry insiders and observers. The blame is squarely pointed at what they call a “broken” financing system, starting with wary, previously burned angel investors, a timid, underfunded and inexperienced venture capital industry, and moving up to institutional investors who are still smarting from their experience with Nortel stock. Many Bay Street investment dealers have lost all interest in the sector, content with the flow of deals in mining and oil and gas. Equity offerings from technology companies represented less than 4 per cent of deals on the TSX in each of the past four years, down from more than 20 per cent a decade ago.
After carefully reviewing the data and determining that Canada does not have a competitive advantage in high-tech venture capital, Spend-Every-Penny has reached a conclusion:
The federal government has taken notice. In its recent budget, the government announced it will pour $400-million into Canadian venture capital, and Finance Minister Jim Flaherty has tapped Sam Duboc, one of Canada’s most successful venture capital investors, to provide advice on how best to deploy the money.
Canada has a competitive advantage in filling out forms and whining for government assistance. We must thank our wise masters for recognizing and exploiting this fact.
It was a mildly positive day for the Canadian preferred share market, with PerpetualPremiums up 5bp, FixedResets gaining 2bp and DeemedRetractibles winning 8bp. Volatility was subdued. Volume was average – a pleasant change from the troughs of last week!
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
|||||||
| Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
| Ratchet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0202 % | 2,289.7 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0202 % | 3,425.1 |
| Floater | 3.18 % | 3.20 % | 71,205 | 19.25 | 3 | 0.0202 % | 2,472.2 |
| OpRet | 4.79 % | 3.74 % | 42,557 | 0.93 | 5 | -0.1385 % | 2,521.5 |
| SplitShare | 5.49 % | 4.95 % | 74,959 | 4.70 | 3 | 0.1068 % | 2,758.7 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1385 % | 2,305.7 |
| Perpetual-Premium | 5.36 % | 3.17 % | 89,542 | 0.60 | 28 | 0.0496 % | 2,260.3 |
| Perpetual-Discount | 4.99 % | 4.95 % | 106,944 | 15.52 | 6 | -0.3278 % | 2,497.6 |
| FixedReset | 5.01 % | 2.93 % | 190,365 | 4.18 | 70 | 0.0176 % | 2,412.8 |
| Deemed-Retractible | 4.98 % | 3.72 % | 148,692 | 2.87 | 46 | 0.0796 % | 2,334.6 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| W.PR.J | Perpetual-Premium | -1.10 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2012-08-15 Maturity Price : 25.00 Evaluated at bid price : 25.27 Bid-YTW : -7.17 % |
| NA.PR.M | Deemed-Retractible | 1.23 % | Deleted from TXPR. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-05-15 Maturity Price : 26.00 Evaluated at bid price : 27.25 Bid-YTW : -0.60 % |
| FTS.PR.E | OpRet | 1.39 % | Added to TXPR. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-06-01 Maturity Price : 25.75 Evaluated at bid price : 27.05 Bid-YTW : -0.31 % |
| W.PR.H | Perpetual-Premium | 1.45 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2013-01-15 Maturity Price : 25.00 Evaluated at bid price : 25.90 Bid-YTW : -1.63 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| FTS.PR.E | OpRet | 100,600 | Added to TXPR. National crossed 100,000 at 27.00. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-06-01 Maturity Price : 25.75 Evaluated at bid price : 27.05 Bid-YTW : -0.31 % |
| BMO.PR.H | Deemed-Retractible | 81,051 | RBC crossed 50,000 at 25.90. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-02-25 Maturity Price : 25.00 Evaluated at bid price : 25.80 Bid-YTW : 1.26 % |
| TD.PR.K | FixedReset | 53,521 | RBC crossed 44,700 at 26.90. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-31 Maturity Price : 25.00 Evaluated at bid price : 26.79 Bid-YTW : 2.52 % |
| BNS.PR.Y | FixedReset | 50,716 | RBC crossed 40,000 at 25.17. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.17 Bid-YTW : 2.61 % |
| POW.PR.B | Perpetual-Premium | 49,510 | Scotia crossed 32,500 at 25.05. YTW SCENARIO Maturity Type : Call Maturity Date : 2012-08-15 Maturity Price : 25.00 Evaluated at bid price : 25.09 Bid-YTW : 1.14 % |
| BNS.PR.Q | FixedReset | 44,697 | RBC crossed 32,900 at 25.50. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.42 Bid-YTW : 2.97 % |
| There were 31 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| ELF.PR.H | Perpetual-Premium | Quote: 25.48 – 26.00 Spot Rate : 0.5200 Average : 0.3108 YTW SCENARIO |
| IAG.PR.F | Deemed-Retractible | Quote: 25.97 – 26.33 Spot Rate : 0.3600 Average : 0.2320 YTW SCENARIO |
| CIU.PR.B | FixedReset | Quote: 27.11 – 27.52 Spot Rate : 0.4100 Average : 0.3029 YTW SCENARIO |
| SLF.PR.H | FixedReset | Quote: 24.46 – 24.75 Spot Rate : 0.2900 Average : 0.1922 YTW SCENARIO |
| ENB.PR.A | Perpetual-Premium | Quote: 25.65 – 25.95 Spot Rate : 0.3000 Average : 0.2196 YTW SCENARIO |
| MFC.PR.D | FixedReset | Quote: 26.51 – 26.70 Spot Rate : 0.1900 Average : 0.1164 YTW SCENARIO |