The New York Fed has announced:
RBC Capital Markets Corporation has been added to the list of primary dealers, effective July 8, 2009.
… and note …
Primary dealers are banks and securities broker-dealers that trade in U.S. Government securities with the Federal Reserve Bank of New York.
.
Bloomberg reports:
RBC is the first Canadian firm to join the Fed’s network since CIBC Wood Gundy in 1996. The first Canadian primary dealer was Nesbitt Burns, which was given the designation in 1995. Nesbitt Burns was renamed BMO Nesbitt Burns in 2000 and abandoned its dealership in 2002. CIBC left in February 2007, before the start of the financial crisis which led to the flight-to-quality in U.S. government securities. Royal Bank of Canada is the nation’s largest lender.
The International Monetary Fund has released its Global Financial Stability Report – Market Update, July 2009:
Financial conditions have improved, as unprecedented policy intervention has reduced the risk of systemic collapse and expectations of economic recovery have risen. Nonetheless, vulnerabilities remain and complacency must be avoided. The financial sector continues to be dependent on significant public support, resulting in an unparalleled transfer of risk from the private to the public sector. At the same time, however, work will need to begin on exit strategies from the various financial, monetary, and fiscal support policies in order to address market uncertainty. Medium-term policies need to ensure that steps taken to normalize policies and markets are consistent with establishing a lasting framework of sound financial regulation, sustainable fiscal balances, and the maintenance of price stability.
I am glad to hear that, in the opinion of the quasi-regulators at the IMF, that there is a continued need for quasi-regulators.
On July 3 I remarked on the idiocy of solemn discussions about “What Should be the World’s Reserve Currency?”. There’s a guy in China who has a better grasp of affairs than his political masters:
Huang Xinyuan, who sells mining equipment and pesticides to customers across China’s border with Vietnam, says he no longer wants payment in U.S. dollars and prefers the yuan.
Sales using the greenback at Guangxi Jinbei Group, where Huang is vice president, dropped to 30 percent of contracts in 2008 from 87 percent in 2007. The yuan, which has gained 21 percent since it was allowed to strengthen against the dollar starting in 2005, offers greater stability, he said.
That’s how reserve currency status gets decided … what people will take. Anyone who was in an Eastern Bloc country in the ’80’s, or even ’90’s, furtively exchanging greenbacks for local currency at prices bearing no relationship to the official market, knows that.
There are consultations progressing between private equity players and the FDIC regarding the failed bank buy-out rules discussed on PrefBlog on July 3.
Treasury has announced that the Legacy Securities Public-Private Investment Program and the Legacy Loan Program are moving forward. Of highest importance, of course, is making sure the lolly is distributed to appropriate parties:
Collectively, the nine pre-qualified PPIP fund managers have established 10 unique relationships with leading small-, veteran-, minority-, and women-owned financial services businesses, located in five different states, pursuant to the Legacy Securities PPIP. Moreover, as Treasury previously announced, small-, veteran-, minority-, and women-owned businesses will continue to have the opportunity to partner with selected fund managers following pre-qualification.
Continued good volume today, without much price action. FixedResets were actually down, albeit by such a marginal amount as to be meaningless. The median Yield-to-Worst on OperatingRetractibles continues to be negative.
| 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 | -0.6857 % | 1,167.7 |
| FixedFloater | 7.08 % | 5.46 % | 37,010 | 16.38 | 1 | 0.0000 % | 2,130.7 |
| Floater | 3.26 % | 3.78 % | 77,290 | 17.91 | 3 | -0.6857 % | 1,458.8 |
| OpRet | 4.99 % | -3.61 % | 123,599 | 0.09 | 15 | -0.3393 % | 2,211.1 |
| SplitShare | 5.72 % | 4.73 % | 74,184 | 4.18 | 3 | 0.1805 % | 1,905.5 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.3393 % | 2,021.8 |
| Perpetual-Premium | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0053 % | 1,753.0 |
| Perpetual-Discount | 6.32 % | 6.32 % | 159,127 | 13.46 | 71 | 0.0053 % | 1,614.5 |
| FixedReset | 5.59 % | 4.31 % | 480,094 | 4.29 | 40 | -0.0210 % | 2,055.6 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| IAG.PR.C | FixedReset | -2.88 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-01-30 Maturity Price : 25.00 Evaluated at bid price : 25.98 Bid-YTW : 5.29 % |
| BAM.PR.N | Perpetual-Discount | -2.49 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-08 Maturity Price : 15.29 Evaluated at bid price : 15.29 Bid-YTW : 7.86 % |
| MFC.PR.A | OpRet | -2.11 % | YTW SCENARIO Maturity Type : Soft Maturity Maturity Date : 2015-12-18 Maturity Price : 25.00 Evaluated at bid price : 25.06 Bid-YTW : 4.12 % |
| BAM.PR.O | OpRet | -1.84 % | YTW SCENARIO Maturity Type : Option Certainty Maturity Date : 2013-06-30 Maturity Price : 25.00 Evaluated at bid price : 23.43 Bid-YTW : 6.91 % |
| BAM.PR.M | Perpetual-Discount | -1.61 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-08 Maturity Price : 15.32 Evaluated at bid price : 15.32 Bid-YTW : 7.84 % |
| POW.PR.A | Perpetual-Discount | -1.23 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-08 Maturity Price : 20.89 Evaluated at bid price : 20.89 Bid-YTW : 6.75 % |
| CU.PR.A | Perpetual-Discount | -1.12 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-08 Maturity Price : 23.60 Evaluated at bid price : 23.90 Bid-YTW : 6.14 % |
| BAM.PR.K | Floater | -1.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-08 Maturity Price : 10.45 Evaluated at bid price : 10.45 Bid-YTW : 3.79 % |
| BNS.PR.M | Perpetual-Discount | -1.01 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-08 Maturity Price : 18.61 Evaluated at bid price : 18.61 Bid-YTW : 6.06 % |
| CL.PR.B | Perpetual-Discount | 1.07 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-08 Maturity Price : 23.28 Evaluated at bid price : 23.55 Bid-YTW : 6.69 % |
| PWF.PR.I | Perpetual-Discount | 1.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-08 Maturity Price : 22.86 Evaluated at bid price : 23.10 Bid-YTW : 6.50 % |
| GWO.PR.F | Perpetual-Discount | 1.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-08 Maturity Price : 22.79 Evaluated at bid price : 23.01 Bid-YTW : 6.46 % |
| W.PR.H | Perpetual-Discount | 1.52 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-08 Maturity Price : 21.41 Evaluated at bid price : 21.41 Bid-YTW : 6.46 % |
| PWF.PR.L | Perpetual-Discount | 2.19 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-08 Maturity Price : 20.20 Evaluated at bid price : 20.20 Bid-YTW : 6.33 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| BMO.PR.O | FixedReset | 92,430 | TD crossed 64,000 at 28.00. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-06-24 Maturity Price : 25.00 Evaluated at bid price : 27.98 Bid-YTW : 4.31 % |
| CM.PR.K | FixedReset | 92,350 | RBC crossed three blocks: 20,000, then 10,000 then 42,400, all at 25.85. YTW SCENARIO Maturity Type : Call Maturity Date : 2019-08-30 Maturity Price : 25.00 Evaluated at bid price : 25.69 Bid-YTW : 4.65 % |
| MFC.PR.E | FixedReset | 55,050 | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-10-19 Maturity Price : 25.00 Evaluated at bid price : 25.75 Bid-YTW : 5.10 % |
| RY.PR.B | Perpetual-Discount | 49,606 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-08 Maturity Price : 19.01 Evaluated at bid price : 19.01 Bid-YTW : 6.29 % |
| BMO.PR.P | FixedReset | 42,424 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-08 Maturity Price : 23.31 Evaluated at bid price : 25.61 Bid-YTW : 4.79 % |
| BNS.PR.R | FixedReset | 40,178 | RBC sold 19,000 to anonymous at 25.42. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-08 Maturity Price : 25.20 Evaluated at bid price : 25.25 Bid-YTW : 4.43 % |
| There were 46 other index-included issues trading in excess of 10,000 shares. | |||