UBS is is projecting another massive loss for MFC:
Ongoing low interest rates are making things increasingly difficult for life insurance companies which rely heavily on fixed income investments such as government bonds to cover future policy holder liabilities.
In a note to clients this morning UBS analyst Peter Rozenberg predicted Manulife Financial Corp. will be hardest hit, putting it on track for a loss in the third quarter of $1.48-billion.
CFTC Commissioner Bart Chilton has demonstrated his complete ignorance of the market:
Bart Chilton, a commissioner with the futures regulator, said “mini-flash crashes occur all too often” following a surge in high-frequency trading.
…
“They don’t cause as much of a disruption as that of May 6, but more than once this year, runaway algos have disrupted markets. By that I mean, cost people money,” Chilton said in prepared remarks for an energy conference in Las Vegas.“We should explore ways to hold those who set off runaway robotic trades accountable,” he said.
At least one algorithm is know to have disrupted the oil markets this year. Infinium Capital Management said in August it was the company at the center of a six-month probe by CME Group Inc into why a new trading
program malfunctioned, racking up a million-dollar loss in about a second on February 3.
Some might think that Infinium Capital Management was fined a million bucks by the markets – which went directly into the pockets of the not-so-dumb traders – and that that’s accountability enough. But then the regulators wouldn’t have anything to do.
OSFI’s in a little difficulty:
Auditor General Sheila Fraser said in a report that the Office of the Superintendent of Financial Institutions (OSFI) adequately supervised the banks at present.
“However, the growing volume and complexity of its work is increasing the demands on its human resources,” she wrote, noting an ever larger number of complex financial products.
“This challenge, combined with pressures on training and compensation, could affect the office’s ability to attract and retain qualified staff to maintain its capacity and competency to carry out its supervisory mandate.”
…
Ms. Fraser said that, as of March 10 this year, 10% of positions on large bank supervisory teams and 12% of jobs on the specialist groups that support the teams were vacant. Half the positions have been open for a year.She cited OSFI as saying there “was little flexibility to address unexpected events” and said the time taken to dealing with documents resulted in less time available for detecting and analyzing risks.
A good day overall in the Canadian preferred share market on continued strong volume, with PerpetualDiscounts gaining 13bp, while FixedResets lost 2bp.
| 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 | 0.1648 % | 2,175.9 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1648 % | 3,296.2 |
| Floater | 2.88 % | 3.19 % | 87,838 | 19.24 | 3 | 0.1648 % | 2,349.4 |
| OpRet | 4.93 % | 3.92 % | 99,450 | 0.74 | 9 | 0.0260 % | 2,364.2 |
| SplitShare | 5.83 % | -27.07 % | 65,989 | 0.09 | 2 | 0.8110 % | 2,413.7 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0260 % | 2,161.8 |
| Perpetual-Premium | 5.69 % | 5.03 % | 142,440 | 5.34 | 19 | 0.0741 % | 2,017.8 |
| Perpetual-Discount | 5.41 % | 5.42 % | 247,947 | 14.68 | 58 | 0.1341 % | 2,019.4 |
| FixedReset | 5.27 % | 3.07 % | 338,774 | 3.24 | 47 | -0.0196 % | 2,275.3 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| POW.PR.B | Perpetual-Discount | 1.27 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-10-26 Maturity Price : 23.71 Evaluated at bid price : 24.00 Bid-YTW : 5.61 % |
| BNA.PR.C | SplitShare | 1.57 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2019-01-10 Maturity Price : 25.00 Evaluated at bid price : 22.69 Bid-YTW : 5.91 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| CM.PR.A | OpRet | 181,000 | Called for redemption. Desjardins bought 180,500 from Nesbitt at 24.98. YTW SCENARIO Maturity Type : Soft Maturity Maturity Date : 2011-07-30 Maturity Price : 25.00 Evaluated at bid price : 24.97 Bid-YTW : 5.41 % |
| BNS.PR.P | FixedReset | 95,415 | National crossed 25,000 at 26.51; Nesbitt crossed 50,000 at 26.50. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-05-25 Maturity Price : 25.00 Evaluated at bid price : 26.51 Bid-YTW : 2.46 % |
| CM.PR.K | FixedReset | 84,247 | RBC crossed 75,000 at 27.21. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-08-30 Maturity Price : 25.00 Evaluated at bid price : 27.17 Bid-YTW : 2.86 % |
| POW.PR.D | Perpetual-Discount | 72,425 | RBC crossed 46,800 at 23.10. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-10-26 Maturity Price : 22.76 Evaluated at bid price : 22.96 Bid-YTW : 5.48 % |
| TRP.PR.B | FixedReset | 68,300 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-10-26 Maturity Price : 24.96 Evaluated at bid price : 25.01 Bid-YTW : 3.30 % |
| RY.PR.C | Perpetual-Discount | 66,500 | RBC crossed two blocks of 30,000 each, both at 22.41. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-10-26 Maturity Price : 22.26 Evaluated at bid price : 22.40 Bid-YTW : 5.13 % |
| There were 57 other index-included issues trading in excess of 10,000 shares. | |||