April 11, 2013

There has been a lot of yammering about income inequality in the past few years, as I mentioned on March 15. I’ve found some more source data:

In the next calculation, the world Gini index is recalculated by weighting countries by their population size. This means that countries with large populations have a larger impact on the Gini index than do countries with smaller populations. The population-weighted Gini index was calculated by Branko Milanovic and published in his book Worlds Apart: Measuring International and Global Inequality.13 The chart below compares the population-weighted Gini index (red line) with the unweighted Gini index shown in the previous chart (black line).

This weighted world Gini index declines almost consistently from 1962 onward. This is mainly due to the phenomenal economic growth in China and India relative to richer countries. Because China and India together account for over one-third of the world’s population, these two countries have a very strong impact on the population-weighted Gini results. But if China and India are removed from the calculation, the population-weighted Gini index trends upward after 1982 (as does the unweighted Gini index), meaning that overall income inequality is increasing in the rest of the world.

There’s a great graph, but it’s Flash (Wow! Way cool!), so go look for yourself. I like the last sentence from the quoted verbiage – ‘if we remove enough data, we can prove our point!’

It was a mixed day for the Canadian preferred share market, with PerpetualPremiums up 15bp, FixedResets down 9bp and DeemedRetractibles gaining 8bp. Volatility was average. Volume was low.

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 0.3598 % 2,588.4
FixedFloater 4.09 % 3.40 % 33,949 18.60 1 0.9802 % 4,012.3
Floater 2.69 % 2.91 % 92,824 19.98 4 0.3598 % 2,794.8
OpRet 4.78 % 1.33 % 54,133 0.19 5 0.0385 % 2,619.7
SplitShare 4.80 % 4.01 % 134,965 4.14 5 0.0241 % 2,960.0
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 0.0385 % 2,395.5
Perpetual-Premium 5.18 % 1.41 % 86,725 0.51 32 0.1508 % 2,382.0
Perpetual-Discount 4.83 % 4.82 % 180,886 15.76 4 0.2843 % 2,691.6
FixedReset 4.91 % 2.67 % 260,857 3.44 80 -0.0930 % 2,512.6
Deemed-Retractible 4.86 % 2.42 % 124,595 0.46 44 0.0757 % 2,459.4
Performance Highlights
Issue Index Change Notes
CU.PR.C FixedReset -1.48 % YTW SCENARIO
Maturity Type : Call
Maturity Date : 2017-06-01
Maturity Price : 25.00
Evaluated at bid price : 26.55
Bid-YTW : 2.54 %
FTS.PR.H FixedReset -1.19 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2043-04-11
Maturity Price : 23.77
Evaluated at bid price : 25.65
Bid-YTW : 2.57 %
PWF.PR.F Perpetual-Premium 1.38 % YTW SCENARIO
Maturity Type : Call
Maturity Date : 2013-05-11
Maturity Price : 25.00
Evaluated at bid price : 25.66
Bid-YTW : -27.69 %
Volume Highlights
Issue Index Shares
Traded
Notes
BAM.PR.P FixedReset 108,303 Scotia crossed 50,000 at 26.65; TD crossed 51,000 at the same price.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-09-30
Maturity Price : 25.00
Evaluated at bid price : 26.63
Bid-YTW : 2.61 %
TRP.PR.D FixedReset 68,663 Desjardins crossed 25,000 at 26.02; National crossed 25,000 at the same price.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2019-04-30
Maturity Price : 25.00
Evaluated at bid price : 26.00
Bid-YTW : 3.36 %
ENB.PR.P FixedReset 54,824 Desjardins crossed 50,000 at 25.96.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2019-03-01
Maturity Price : 25.00
Evaluated at bid price : 25.96
Bid-YTW : 3.37 %
BNS.PR.Y FixedReset 48,902 RBC crossed 37,200 at 24.15.
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.15
Bid-YTW : 2.98 %
BNS.PR.Q FixedReset 35,853 RBC crossed 16,300 at 25.00.
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 25.01
Bid-YTW : 2.93 %
BNS.PR.P FixedReset 35,044 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2013-05-25
Maturity Price : 25.00
Evaluated at bid price : 25.08
Bid-YTW : 0.18 %
There were 23 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
PWF.PR.E Perpetual-Premium Quote: 25.70 – 26.22
Spot Rate : 0.5200
Average : 0.3224

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2013-05-11
Maturity Price : 25.00
Evaluated at bid price : 25.70
Bid-YTW : -29.24 %

CU.PR.C FixedReset Quote: 26.55 – 26.95
Spot Rate : 0.4000
Average : 0.2510

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2017-06-01
Maturity Price : 25.00
Evaluated at bid price : 26.55
Bid-YTW : 2.54 %

FTS.PR.H FixedReset Quote: 25.65 – 25.97
Spot Rate : 0.3200
Average : 0.2101

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2043-04-11
Maturity Price : 23.77
Evaluated at bid price : 25.65
Bid-YTW : 2.57 %

CM.PR.E Perpetual-Premium Quote: 25.71 – 25.92
Spot Rate : 0.2100
Average : 0.1186

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2013-05-11
Maturity Price : 25.00
Evaluated at bid price : 25.71
Bid-YTW : -29.61 %

ENB.PR.B FixedReset Quote: 25.88 – 26.10
Spot Rate : 0.2200
Average : 0.1532

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2017-06-01
Maturity Price : 25.00
Evaluated at bid price : 25.88
Bid-YTW : 3.22 %

BNS.PR.Q FixedReset Quote: 25.01 – 25.20
Spot Rate : 0.1900
Average : 0.1260

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 25.01
Bid-YTW : 2.93 %

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