Well, it was a pretty lousy day for equities:
Global equities capped their worst start to a year since 2000, with the Dow Jones Industrial Average sliding more than 250 points, as China unexpectedly weakening its currency fueled fresh concern over the strength of the world economy. Bonds gained.
The MSCI All-Country World Index ended the first three days of 2016 down by 3.3 percent, as U.S. stocks fell to a three-month low and emerging-market shares dropped to their cheapest level since 2009. Brent crude plunged to its lowest point since 2004, while U.S. oil spiked below $34 a barrel as supplies at a hub rose to a record. The dollar pared gains after minutes of the Federal Reserve’s last meeting were released. Treasuries jumped, with yields on 10-year notes dropping seven basis points to 2.17 percent.
…
China’s growing tolerance for a weaker yuan signaled the government is struggling in its efforts to shore up economic growth and rekindled concern last seen in August, when U.S. stocks entered their first correction in four years amid anxiety the slowdown in China would hamper global growth. U.S. crude’s plunge toward $34 a barrel heightened disinflation fears as investors assess the ability of central banks to meet policy goals. The World Bank cut its global growth forecasts for this year and next as markets closed.
… and this had an effect on the loonie …
But on Wednesday, Canada’s benchmark heavy crude price was hit hard again, falling below $20 (U.S.) a barrel for the first time since record-keeping for that grade began seven years ago. It fell in concert with global crude prices such as the international benchmark Brent, which sank to its lowest since 2004.
That helped pull the loonie down half a cent to less than 71 cents. The Canadian currency has been hit by the oil shock, poor prospects for domestic economic growth and the different paths on interest rates being taken by the U.S. Federal Reserve Board and the Bank of Canada.
The Canadian dollar, which sank 16 per cent last year, has now reached depths last seen in August, 2003, and further weakening is possible. That spells more worries for importers as well as travellers heading to the United States.
Meanwhile, the S&P/TSX composite index skidded 193 points to 12,726.80 in its third straight session of losses, pulled lower by energy shares such as Encana Corp. and Paramount Resources Ltd.
… and given the state of overnight markets:
The worst start for Chinese markets in two decades showed no signs of letting up after the central bank cut its yuan reference rate by the most since August, sparking a selloff in stocks that forced the $6.6 trillion market to shut early.
China’s CSI 300 Index plunged 7.2 percent before bourses were halted by circuit breakers in the first half hour of trading, while the onshore yuan weakened 0.6 percent versus the dollar to a five-year low. The People’s Bank of China cut its reference rate on Thursday for an eighth straight day, fueling concern that tepid economic growth is prompting authorities to guide the currency lower.
… it looks like tomorrow might be worse:
U.S. index futures sank after China’s weaker yuan fix spurred a rout in the nation’s equities that triggered a market-wide halt for the second time this week.
Contracts on the Standard & Poor’s 500 Index slid 1.7 percent to 1,953 as of 2:40 p.m. in Hong Kong. Those on the Dow Jones Industrial Average lost 1.6 percent after the gauge capped its worst three-day start to a year since 2008. Chinese stock exchanges closed less than half an hour after they opened as the CSI 300 Index plunged more than 7 percent, setting off a circuit-breaker mechanism.
Meanwhile Fischer is indicating a steady policy of Fed hikes:
Federal Reserve Vice Chairman Stanley Fischer said policy makers’ forecasts predicting four interest-rate increases in 2016 were “in the ballpark,” though China’s slowing economy and other sources of uncertainty make it difficult to predict the path of policy.
“The reason we meet eight times a year is because things happen, and as they happen you want to adjust your policy,” Fischer said in an interview Wednesday on CNBC.
Fischer’s remarks come three weeks after the Fed raised interest rates for the first time in almost a decade. Policy makers said at the time they would continue to monitor real and expected progress on inflation, which remains below their 2 percent target, as they contemplate when to raise again.
And a modest rise in Canadian mortgage rates has the chatteratti going wild!
There’s just one reason for the strength of Canada’s housing market – low, stable mortgage rates.
Rates are still low, but the stable part is in question after Royal Bank of Canada announced a small but still significant round of mortgage rate increases that will take effect Friday. Other banks will likely adjust rates as well, after a brief period of letting RBC draw fire as the first to move.
RBC will increase borrowing costs on special offers for fixed-rate mortgages with terms of two to five years by 0.1 of a percentage point.
…
Lenders are facing higher costs for financing mortgages as a result of new mortgage market rules introduced last year by federal regulators. As well, unsettled financial market conditions are forcing lenders to pay higher rates on the money they raise to lend out as mortgages.
Has anybody seen a lift in GIC rates lately?
TransCanada Corporation, proud issuer of TRP.PR.A, TRP.PR.B, TRP.PR.C, TRP.PR.D, TRP.PR.E, TRP.PR.F, TRP.PR.G and TRP.PR.H, has announced a NAFTA claim regarding the Keystone XL refusal:
TransCanada Corporation (TSX:TRP) (NYSE:TRP) (TransCanada) announced today it has filed a Notice of Intent to initiate a claim under Chapter 11 of the North American Free Trade Agreement (NAFTA) in response to the U.S. Administration’s decision to deny a Presidential Permit for the Keystone XL Pipeline on the basis that the denial was arbitrary and unjustified.
TransCanada also has filed a lawsuit in the U.S. Federal Court in Houston, Texas, asserting that the President’s decision to deny construction of Keystone XL exceeded his power under the U.S. Constitution.
Further, as a result of the permit denial, TransCanada is reviewing the approximate $4.3 billion (US$3.1 billion) carrying value invested in the project and related assets and expects that an estimated $2.5 to $2.9 billion after-tax write-down will be recorded in the company’s fourth quarter results.
DBRS Limited (DBRS) notes that TransCanada Corporation (TCC, or the Company) announced today that it has filed a Notice of Intent to initiate a claim under Chapter 11 of the North American Free Trade Agreement (NAFTA) in response to the U.S. Administration’s decision to deny a Presidential border crossing permit for the Keystone XL pipeline project (KXL) on the basis that the denial was arbitrary and unjustified. Through the NAFTA claim, TCC will be seeking to recover more than USD 15 billion in costs and damages suffered by the Company as a result of the U.S. Administration’s breach of its NAFTA obligations. Concurrently, TCC has filed a lawsuit in the U.S. Federal Court in Houston, Texas, asserting that the President’s decision to deny construction of KXL exceeded his power under the U.S. Constitution.
…
Overall, DBRS views the impact of TCC’s legal actions to be credit neutral. DBRS had previously commented (Press release dated November 6, 2015) that it viewed the denial of the KXL permit as having no impact on the credit ratings of TCC, and its wholly owned subsidiaries (TransCanada PipeLines Limited and Nova Gas Transmission Limited). Today’s announcement does not impact the Company’s business risk profile as the current ratings reflect environmental, regulatory and political risks with respect to several of the Company’s development projects, including KXL. Furthermore, TCC expects the support for this energy infrastructure project from shippers, underpinned by long-term contracts, to continue through the remedial process. DBRS has modeled the impact of the $2.9 billion writedown (maximum of the range) together with TCC’s recent approximately $300 million share buyback (December 2015), and the USD 654 million acquisition of Ironwood Power Plant (October 2015; 100% debt financed, expected to close Q1 2016) on the Company’s credit metrics on a pro forma basis, and has concluded that the writedown does not have an impact on the Company’s financial risk profile as key credit metrics are expected to remain reasonable for the current rating of A (low), with a Stable trend.
It was another awful day for the Canadian preferred share market, with PerpetualDiscounts off 17bp, FixedResets losing 58bp and DeemedRetractibles down 26bp. The Performance Highlights table is again very lengthy. Volume was well below average.
For as long as the FixedReset market is so violently unsettled, I’ll keep publishing updates of the more interesting and meaningful series of FixedResets’ Implied Volatilities. This doesn’t include Enbridge because although Enbridge has a large number of issues outstanding, all of which are quite liquid, the range of Issue Reset Spreads is too small for decent conclusions. The low is 212bp (ENB.PR.H; second-lowest is ENB.PR.D at 237bp) and the high is a mere 268 for ENB.PF.G.
Remember that all rich /cheap assessments are:
» based on Implied Volatility Theory only
» are relative only to other FixedResets from the same issuer
» assume constant GOC-5 yield
» assume constant Implied Volatility
» assume constant spread
Here’s TRP:
Click for Big
TRP.PR.E, which resets 2019-10-30 at +235, is bid at 18.50 to be $1.04 rich, while TRP.PR.C, resetting 2016-1-30 at +154, is $1.46 cheap at its bid price of 11.45.
Click for Big
Most expensive is MFC.PR.M, resetting at +236bp on 2019-12-19, bid at 19.68 to be 0.61 rich, while MFC.PR.G, resetting at +290bp on 2016-12-19, is bid at 20.48 to be 0.62 cheap.
Click for Big
The cheapest issue relative to its peers is BAM.PR.R, resetting at +230bp on 2016-6-30, bid at 15.65 to be $1.51 cheap. BAM.PF.E, resetting at +255bp on 2020-3-31 is bid at 19.45 and appears to be $0.93 rich.
Click for Big
FTS.PR.K, with a spread of +205bp, and bid at 18.38, looks $0.85 expensive and resets 2019-3-1. FTS.PR.G, with a spread of +213bp and resetting 2018-9-1, is bid at 17.30 and is $0.66 cheap.
Click for Big
Investment-grade pairs predict an average three-month bill yield over the next five-odd years of -1.00%, with one outlier below -2.00%. There is one junk outlier below -2.00% and three above 0.00%.
Click for Big
Shall we just say that this exhibits a high level of confidence in the continued rapacity of Canadian banks?
| 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 | 4.76 % | 5.77 % | 28,945 | 16.94 | 1 | 1.7857 % | 1,633.9 |
| FixedFloater | 6.82 % | 6.05 % | 33,401 | 16.14 | 1 | 0.0000 % | 2,859.5 |
| Floater | 4.19 % | 4.37 % | 82,161 | 16.71 | 4 | 0.6687 % | 1,826.0 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0000 % | 2,744.2 |
| SplitShare | 4.81 % | 5.61 % | 77,849 | 2.79 | 6 | 0.0000 % | 3,211.3 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0000 % | 2,505.5 |
| Perpetual-Premium | 5.83 % | -0.81 % | 90,248 | 0.09 | 6 | 0.1618 % | 2,529.8 |
| Perpetual-Discount | 5.65 % | 5.67 % | 97,982 | 14.40 | 34 | -0.1724 % | 2,554.3 |
| FixedReset | 5.22 % | 4.54 % | 246,690 | 15.61 | 81 | -0.5771 % | 1,978.6 |
| Deemed-Retractible | 5.23 % | 5.05 % | 123,119 | 5.29 | 34 | -0.2673 % | 2,575.7 |
| FloatingReset | 2.87 % | 4.37 % | 63,812 | 5.62 | 13 | -0.0815 % | 2,097.5 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| BNS.PR.D | FloatingReset | -5.16 % | The closing bid of 18.02 is actually pretty reasonable – the issue traded 6,232 shares today in a range of 18.10-95 before closing at 18.02-29, 1×1. The execution prices nosedived from 18.67 at 3:21pm to 18.10 at 3:53pm on twelve trades out of CIBC totalling 2500 shares. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 18.02 Bid-YTW : 7.17 % |
| IFC.PR.C | FixedReset | -4.62 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 18.17 Bid-YTW : 7.72 % |
| CU.PR.C | FixedReset | -3.30 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 17.90 Evaluated at bid price : 17.90 Bid-YTW : 4.49 % |
| HSE.PR.A | FixedReset | -3.11 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 11.85 Evaluated at bid price : 11.85 Bid-YTW : 5.19 % |
| TRP.PR.C | FixedReset | -3.05 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 11.45 Evaluated at bid price : 11.45 Bid-YTW : 4.93 % |
| TRP.PR.B | FixedReset | -2.63 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 11.10 Evaluated at bid price : 11.10 Bid-YTW : 4.60 % |
| TRP.PR.D | FixedReset | -2.24 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 17.90 Evaluated at bid price : 17.90 Bid-YTW : 4.54 % |
| SLF.PR.I | FixedReset | -2.13 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 19.30 Bid-YTW : 7.01 % |
| IAG.PR.G | FixedReset | -2.08 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 20.25 Bid-YTW : 6.54 % |
| FTS.PR.F | Perpetual-Discount | -1.91 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 22.34 Evaluated at bid price : 22.61 Bid-YTW : 5.48 % |
| TRP.PR.H | FloatingReset | -1.89 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 9.84 Evaluated at bid price : 9.84 Bid-YTW : 4.47 % |
| W.PR.K | FixedReset | -1.83 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 22.86 Evaluated at bid price : 24.20 Bid-YTW : 5.41 % |
| BAM.PR.Z | FixedReset | -1.73 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 19.84 Evaluated at bid price : 19.84 Bid-YTW : 4.81 % |
| NA.PR.Q | FixedReset | -1.71 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.08 Bid-YTW : 3.98 % |
| GWO.PR.O | FloatingReset | -1.67 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 12.35 Bid-YTW : 10.61 % |
| HSE.PR.C | FixedReset | -1.67 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 17.70 Evaluated at bid price : 17.70 Bid-YTW : 5.69 % |
| FTS.PR.J | Perpetual-Discount | -1.61 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 21.70 Evaluated at bid price : 22.00 Bid-YTW : 5.45 % |
| MFC.PR.I | FixedReset | -1.50 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 20.95 Bid-YTW : 6.16 % |
| MFC.PR.J | FixedReset | -1.49 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 19.80 Bid-YTW : 6.66 % |
| BNS.PR.Y | FixedReset | -1.47 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 19.38 Bid-YTW : 6.29 % |
| BAM.PR.R | FixedReset | -1.32 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 15.65 Evaluated at bid price : 15.65 Bid-YTW : 4.90 % |
| MFC.PR.F | FixedReset | -1.31 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 14.27 Bid-YTW : 9.40 % |
| BNS.PR.Z | FixedReset | -1.27 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 19.50 Bid-YTW : 6.54 % |
| BAM.PF.H | FixedReset | -1.22 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 23.21 Evaluated at bid price : 25.15 Bid-YTW : 4.89 % |
| BAM.PF.B | FixedReset | -1.19 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 19.15 Evaluated at bid price : 19.15 Bid-YTW : 4.58 % |
| FTS.PR.G | FixedReset | -1.14 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 17.30 Evaluated at bid price : 17.30 Bid-YTW : 4.37 % |
| BAM.PR.X | FixedReset | -1.14 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 14.80 Evaluated at bid price : 14.80 Bid-YTW : 4.53 % |
| RY.PR.K | FloatingReset | -1.11 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.25 Bid-YTW : 4.49 % |
| BIP.PR.A | FixedReset | -1.08 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 19.30 Evaluated at bid price : 19.30 Bid-YTW : 5.65 % |
| PWF.PR.T | FixedReset | -1.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 21.93 Evaluated at bid price : 22.25 Bid-YTW : 3.62 % |
| GWO.PR.N | FixedReset | -1.02 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 13.55 Bid-YTW : 9.92 % |
| PWF.PR.A | Floater | 1.11 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 12.74 Evaluated at bid price : 12.74 Bid-YTW : 3.75 % |
| MFC.PR.N | FixedReset | 1.15 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 19.31 Bid-YTW : 6.90 % |
| ELF.PR.G | Perpetual-Discount | 1.19 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 21.26 Evaluated at bid price : 21.26 Bid-YTW : 5.61 % |
| CCS.PR.C | Deemed-Retractible | 1.55 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.95 Bid-YTW : 6.25 % |
| BAM.PR.E | Ratchet | 1.79 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 25.00 Evaluated at bid price : 14.25 Bid-YTW : 5.77 % |
| HSE.PR.E | FixedReset | 1.92 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 18.55 Evaluated at bid price : 18.55 Bid-YTW : 5.89 % |
| TRP.PR.F | FloatingReset | 2.27 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 13.50 Evaluated at bid price : 13.50 Bid-YTW : 4.45 % |
| BNS.PR.C | FloatingReset | 2.63 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.28 Bid-YTW : 4.30 % |
| BAM.PR.K | Floater | 2.76 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 10.78 Evaluated at bid price : 10.78 Bid-YTW : 4.41 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| BMO.PR.Q | FixedReset | 102,737 | TD crossed 50,000 at 20.29; RBC crossed 46,700 at the same price. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 20.20 Bid-YTW : 5.99 % |
| RY.PR.Q | FixedReset | 99,011 | Recent new issue. YTW SCENARIO Maturity Type : Call Maturity Date : 2021-05-24 Maturity Price : 25.00 Evaluated at bid price : 25.61 Bid-YTW : 5.07 % |
| CU.PR.C | FixedReset | 48,687 | Scotia crossed 40,700 at 18.55. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 17.90 Evaluated at bid price : 17.90 Bid-YTW : 4.49 % |
| BAM.PF.H | FixedReset | 32,965 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-01-06 Maturity Price : 23.21 Evaluated at bid price : 25.15 Bid-YTW : 4.89 % |
| BNS.PR.E | FixedReset | 32,874 | Recent new issue. YTW SCENARIO Maturity Type : Call Maturity Date : 2021-04-25 Maturity Price : 25.00 Evaluated at bid price : 25.60 Bid-YTW : 5.07 % |
| MFC.PR.M | FixedReset | 32,247 | Scotia crossed 27,500 at 19.80. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 19.68 Bid-YTW : 6.70 % |
| There were 21 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| GWO.PR.O | FloatingReset | This quote is particularly ridiculous in light of the fact that the issue traded 8,965 shares today. Thank you, Nonsense Central! I have not checked whether this lamentable state of affairs is due to inadequate Toronto Stock Exchange reporting or inadequate Toronto Stock Exchange supervision of market-makers.
Quote: 12.35 – 20.25 YTW SCENARIO |
| TD.PR.Y | FixedReset | Quote: 24.00 – 24.50 Spot Rate : 0.5000 Average : 0.3425 YTW SCENARIO |
| CM.PR.Q | FixedReset | Quote: 19.85 – 20.25 Spot Rate : 0.4000 Average : 0.2534 YTW SCENARIO |
| BMO.PR.Z | Perpetual-Discount | Quote: 23.58 – 23.99 Spot Rate : 0.4100 Average : 0.2893 YTW SCENARIO |
| SLF.PR.J | FloatingReset | Quote: 13.60 – 13.98 Spot Rate : 0.3800 Average : 0.2751 YTW SCENARIO |
| TRP.PR.H | FloatingReset | Quote: 9.84 – 10.25 Spot Rate : 0.4100 Average : 0.3063 YTW SCENARIO |