RBC is expanding its US investment banking business:
RBC Capital Markets plans to be a top 10 investment bank in the U.S. by attracting business from American companies worth as much as $10 billion, five times larger than its traditional client base.
“Our goal over the next two to three years is to be top 10 in the U.S. market,” said Blair Fleming, who heads the U.S. investment-banking unit of Royal Bank of Canada in New York.
It’s an interesting strategy in light of the recent deprecation of earnings volatility.
Global corporates are doing well this quarter:
Corporate bonds are rallying for the fourth straight quarter, the longest streak since 2004, extending a record advance as 72 percent of companies beat analysts’ earnings expectations.
The securities returned 2.6 percent this quarter through March 30, following a 16.3 percent gain in 2009, according to a Bank of America Merrill Lynch index. The extra yield, or spread, investors demand to own corporate bonds fell 0.26 percentage point since year-end relative to benchmarks to 1.5 percentage points as of yesterday, the narrowest since November 2007.
Company debt rallied on signs the global economy is improving, with U.S. consumer confidence gaining in March and corporate defaults declining from record levels. Borrowing costs declined to the lowest since 2005, spurring $730 billion of bond issuance globally this quarter, a 25 percent increase from the final period of last year.
The Canadian DEX Universe All Corporate Bond Index is up 2.06% year-to-date.
Volume soared today in the Canadian preferred share market in a rush for the exits … quarter-end window dressing? PerpetualDiscounts were clobbered, losing 67bp, while FixedResets were not immune to the downdraft, losing 28bp. A lengthy performance highlights list is comprised entirely of losers
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
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| Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
| Ratchet | 2.56 % | 2.62 % | 57,533 | 20.97 | 1 | 0.8249 % | 2,157.2 |
| FixedFloater | 4.94 % | 3.06 % | 51,108 | 20.09 | 1 | 0.0000 % | 3,199.9 |
| Floater | 1.90 % | 1.67 % | 49,981 | 23.41 | 4 | 0.3153 % | 2,423.0 |
| OpRet | 4.84 % | 3.28 % | 108,864 | 0.33 | 12 | -0.0646 % | 2,312.4 |
| SplitShare | 6.37 % | 4.84 % | 137,973 | 0.08 | 2 | -0.0877 % | 2,144.1 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0646 % | 2,114.4 |
| Perpetual-Premium | 5.99 % | 6.05 % | 123,990 | 13.76 | 7 | -0.3578 % | 1,861.6 |
| Perpetual-Discount | 6.07 % | 6.14 % | 183,434 | 13.74 | 71 | -0.6720 % | 1,747.8 |
| FixedReset | 5.35 % | 3.40 % | 369,864 | 3.66 | 43 | -0.2786 % | 2,205.1 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| W.PR.H | Perpetual-Discount | -4.98 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-03-30 Maturity Price : 21.01 Evaluated at bid price : 21.01 Bid-YTW : 6.58 % |
| W.PR.J | Perpetual-Discount | -4.26 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-03-30 Maturity Price : 21.28 Evaluated at bid price : 21.55 Bid-YTW : 6.51 % |
| CM.PR.P | Perpetual-Discount | -2.29 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-03-30 Maturity Price : 21.95 Evaluated at bid price : 22.23 Bid-YTW : 6.18 % |
| CM.PR.E | Perpetual-Discount | -2.13 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-03-30 Maturity Price : 22.16 Evaluated at bid price : 22.52 Bid-YTW : 6.21 % |
| BMO.PR.L | Perpetual-Discount | -2.01 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-03-30 Maturity Price : 23.69 Evaluated at bid price : 23.89 Bid-YTW : 6.15 % |
| POW.PR.D | Perpetual-Discount | -1.68 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-03-30 Maturity Price : 19.86 Evaluated at bid price : 19.86 Bid-YTW : 6.32 % |
| IGM.PR.B | Perpetual-Premium | -1.58 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-03-30 Maturity Price : 24.07 Evaluated at bid price : 24.26 Bid-YTW : 6.26 % |
| TRP.PR.A | FixedReset | -1.57 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2015-01-30 Maturity Price : 25.00 Evaluated at bid price : 25.70 Bid-YTW : 3.97 % |
| GWO.PR.H | Perpetual-Discount | -1.50 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-03-30 Maturity Price : 19.76 Evaluated at bid price : 19.76 Bid-YTW : 6.18 % |
| HSB.PR.C | Perpetual-Discount | -1.42 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-03-30 Maturity Price : 20.80 Evaluated at bid price : 20.80 Bid-YTW : 6.17 % |
| GWO.PR.I | Perpetual-Discount | -1.40 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-03-30 Maturity Price : 18.35 Evaluated at bid price : 18.35 Bid-YTW : 6.18 % |
| SLF.PR.B | Perpetual-Discount | -1.38 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-03-30 Maturity Price : 19.23 Evaluated at bid price : 19.23 Bid-YTW : 6.29 % |
| CM.PR.D | Perpetual-Discount | -1.31 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-03-30 Maturity Price : 23.10 Evaluated at bid price : 23.40 Bid-YTW : 6.14 % |
| SLF.PR.A | Perpetual-Discount | -1.25 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-03-30 Maturity Price : 19.02 Evaluated at bid price : 19.02 Bid-YTW : 6.29 % |
| POW.PR.C | Perpetual-Discount | -1.24 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-03-30 Maturity Price : 22.88 Evaluated at bid price : 23.16 Bid-YTW : 6.28 % |
| CM.PR.G | Perpetual-Discount | -1.09 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-03-30 Maturity Price : 21.57 Evaluated at bid price : 21.86 Bid-YTW : 6.17 % |
| POW.PR.B | Perpetual-Discount | -1.07 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-03-30 Maturity Price : 21.22 Evaluated at bid price : 21.22 Bid-YTW : 6.33 % |
| MFC.PR.B | Perpetual-Discount | -1.05 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-03-30 Maturity Price : 18.83 Evaluated at bid price : 18.83 Bid-YTW : 6.23 % |
| SLF.PR.F | FixedReset | -1.04 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-30 Maturity Price : 25.00 Evaluated at bid price : 27.67 Bid-YTW : 3.37 % |
| BMO.PR.J | Perpetual-Discount | -1.02 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-03-30 Maturity Price : 19.41 Evaluated at bid price : 19.41 Bid-YTW : 5.88 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TRI.PR.B | Floater | 153,500 | Nesbitt crossed 150,000 at 23.95. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-03-30 Maturity Price : 23.66 Evaluated at bid price : 23.93 Bid-YTW : 1.61 % |
| TD.PR.K | FixedReset | 127,322 | CIBC bought 27,000 from National at 28.25; RBC bought 10,000 from GMP at 28.20. RBC then crossed 50,000 at 28.28. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-08-30 Maturity Price : 25.00 Evaluated at bid price : 28.22 Bid-YTW : 3.40 % |
| RY.PR.R | FixedReset | 86,776 | Nesbitt bought 50,000 from National at 28.15. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-26 Maturity Price : 25.00 Evaluated at bid price : 28.11 Bid-YTW : 3.14 % |
| BNS.PR.T | FixedReset | 86,655 | RBC crossed 10,000 at 28.30; Nesbitt bought two blocks of 11,000 each from anonymous at 28.25. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-05-25 Maturity Price : 25.00 Evaluated at bid price : 28.10 Bid-YTW : 3.36 % |
| RY.PR.X | FixedReset | 61,439 | RBC bought 10,000 from Scotia at 28.23. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-09-23 Maturity Price : 25.00 Evaluated at bid price : 28.24 Bid-YTW : 3.33 % |
| TRP.PR.A | FixedReset | 55,703 | YTW SCENARIO Maturity Type : Call Maturity Date : 2015-01-30 Maturity Price : 25.00 Evaluated at bid price : 25.70 Bid-YTW : 3.97 % |
| There were 71 other index-included issues trading in excess of 10,000 shares. | |||