Category: Market Action

Bonds closed the week on a happy note, while Dura Automotive Systems reminded investors why junk got such a pejoritive name. New junk issues slowed this week as a few issues were pulled amid widening spreads.

There were ten other $25-equivalent index-included issues trading over 10,000 shares today.

In what may well signal the final descent of this degenerate society into slovenly barbaric torpor, a Toronto dry-cleaning conglomerate filed for CCCA protection today. The Bank of Canada projected 3% inflation in 4Q07, possibly because track-suit-wearing sluggards are usually too spaced out to care what they pay for things.

Bonds had a bad day, enlivened by mass downgrades of sub-prime paper, much of it packaged by General Electric, which is planning to exit the business.

There were fourteen other $25-equivalent index-included issues trading over 10,000 shares today.

There was the usual news today: A story about the bonds dip (I know him, he’s the guy at [Deleted on Legal Advice]), Treasuries dropped, credit spreads widened (even in America), Korea tightened, and there are fears Japan might tighten. Same old.

There were fifteen other $25-equivalent index-included issues trading over 10,000 shares today.

The Bank of Canada increased the overnight rate by 0.25% to 4.5%, as universally expected. There is the usual amount of entrail-interpretation going on in the marketplace – for what it’s worth, I consider the tone of the press release to be neutral – and think that the strong CAD is doing a lot of the heavy lifting for the Bank. But there are the usual pseudo-quants from the “Look, Mom, I got a spreadsheet!” school, claiming, f’rinstance, that since increases have previously occurred in clumps, future increases will also occur in clumps. Apparently, most shops are predicting a September hike, but the track records of these firms was not disclosed. I’m not disclosing my track record of BOC watching, either, mainly because I haven’t got a clue what it is. So be warned!

Bonds had a strong day, on the back of an apparent flight to quality related to sub-prime mortgages in the US and the strength has now spread to Japan amidst muttering that maybe Japan holds too many Treasuries. What a difference a week makes, eh? It was just last Friday I was reporting on the extreme lousiness of the bond market, but Captain Quality has saved the day! I guess a lot of mortgage cheques didn’t arrive in the mail on Monday morning.

SBN.PR.A has announced a normal course issuer bid, less than six weeks after issuing additional shares and less than two months after closing the new issue. It’s not clear how seriously this press release is meant to be taken … there’s not a lot of discount in market-to-NAV for the units … which is why I’m not dignifying the release with its own post.

CXC.PR.A has announced exercise of the underwriters’ greenshoe. This issue is not tracked by HIMIPref™ and I have no plans to do so at this moment – it’s too small. Like many such issues, however, it could make a lot of sense for a small investor planning to buy 100 shares and hold until redemption, given its 5% coupon and discount price

There were nine other $25-equivalent index-included issues trading over 10,000 shares today.

Quiet day today. Volatility continues to be high, as it has for the past two months, but nothing unusual when considered in the context of this short period.

The Bank of Canada will announce the Overnight Rate on July 10. Universally expected to be up 25bp to 4.50%; the suspense lies in what sort of language they use to prepare us for the next meeting.

There were three other $25-equivalent index-included issues trading over 10,000 shares today.

Bondholders will be glad this horrible week is over, as bonds slipped again after the US Employment Numbers (and wage numbers!) came out.

The Teachers/BCE agreement has been released on SEDAR. I didn’t find much of interest, but there was one tidbit: a “Superior Bid” only has to target 50.1% of the common shareholders, but has to be deemed (by BCE’s board) to be financially superior for the Affected Shareholders – and the latter group includes preferreds! Now there’s something that could possibly cause some ill-feeling in the future!

There were ten other $25-equivalent index-included issues trading over 10,000 shares today.

Not a good day for bonds, but preferreds held up pretty well. The Bank of England raised its rate, while there was some tough talk from Trichet. The Bank of Canada released its Summer Survey – it announces its rate decision (“Up!” – JH & just about everybody else) next week.

Global 45 Fund, GFV.PR.A, announced a normal course issuer bid. This issue is not tracked by HIMIPref™.

There were seventeen other $25-equivalent index-included issues trading over 10,000 shares today.

The BCE issues settled back a little after their enormous gains of yesterday – I suspect that they’ll be volatile for a little while longer, as greed wars with fear. I wrote yet another post on the BCE/Teachers Plan of Arrangement today and estimated that taking out the preferreds is costing the common shareholders $1.50 per share.

Econbrowser publicized a new Internet connectivity toy that I was eager to try – but I can’t say I was too impressed by the results. What this world needs is a plethora of blogs about Canadian shares, then we can get into furious arguments with each other, just like the political guys. The chart for PrefInfo.com looks more as expected, anyway.

There were twelve other $25-equivalent index-included issues trading over 10,000 shares today.

Well, I had a marvellous dinner with a very good friend, but it left no time to do much beyond the most vital system updating! I’ll catch up tomorrow, but in the meantime, feast your eyes on the average returns of the Ratchet Rate Index and the Fixed Floater Index. It will be a while before we see those kinds of numbers again!

Later:

There were eightteen other $25-equivalent index-included issues trading over 10,000 shares today.

Another quarter’s been put to bed! Today was a strong day for bonds and a good day for bond traders, who quit work early in the afternoon. I’ve never quite understood how they get away with that, but they do put in pretty long hours.

There were thirteen other $25-equivalent index-included issues trading over 10,000 shares today.