The Europeans have been distracted from the G-20:
Finance ministers from Germany, France and the U.K. met in Seoul to discuss Ireland’s debt crisis after bond yields soared on concern the European Union will need to step in with a bailout.
Ministers are monitoring developments and will probably issue a joint statement later today, said Steffen Seibert, a spokesman for German Chancellor Angela Merkel.
The premium investors charge to hold Irish debt over German bunds climbed to a record yesterday and the euro fell to the lowest level against the dollar since September. Yields on 10- year Irish bonds added 31 basis points to 9.07 percent. Bailing out Ireland’s financial system could cost as much as 50 billion euros ($68 billion) under a “stress case” scenario compiled by the finance ministry and central bank.
Germany is the biggest contributor to this year’s 860 billion euros in loans and pledges to stem Europe’s debt crisis. Bonds of the euro area’s so-called peripheral nations have tumbled since EU leaders on Oct. 29 backed Merkel’s demand to set up a permanent rescue system by 2013 that makes bondholders foot part of the cost of any future debt crisis.
Wow! Higher chance of default has brought with it higher yield demands! Who woulda thunk it? It must be those nasty hedge funds and short sellers at the bottom of this.
Charges have been laid in a tipping scandal. What I find most interesting is that the alpha-tipper (ground-zero tipper? primary tipper?), Mitchell Finkelstein, got his information in three of the four transactions by simply poking around in the Davies Ward Phillips Vineberg LLP document management system – I would have thought that material of this nature would be password protected with access logs maintained and reviewed. Who knows? It might have been; the OSC Statement of Allegations doesn’t go into much detail about it, but it’s an interesting question.
The Canadian preferred share market took a loss today on average volume, with PerpetualDiscounts down 18bp and FixedResets losing 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 | 0.1143 % | 2,234.0 |
| FixedFloater | 4.89 % | 3.50 % | 27,188 | 19.16 | 1 | 1.0904 % | 3,441.5 |
| Floater | 2.66 % | 2.34 % | 63,145 | 21.39 | 4 | 0.1143 % | 2,412.2 |
| OpRet | 4.78 % | 2.84 % | 82,077 | 1.86 | 9 | 0.1297 % | 2,402.6 |
| SplitShare | 5.80 % | -26.83 % | 66,640 | 0.09 | 2 | 0.1202 % | 2,425.8 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1297 % | 2,196.9 |
| Perpetual-Premium | 5.63 % | 5.10 % | 162,660 | 2.75 | 24 | -0.1066 % | 2,026.5 |
| Perpetual-Discount | 5.29 % | 5.32 % | 253,831 | 14.92 | 53 | -0.1829 % | 2,063.7 |
| FixedReset | 5.19 % | 2.87 % | 343,632 | 3.20 | 50 | -0.0211 % | 2,296.1 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| IAG.PR.A | Perpetual-Discount | -2.05 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-11-12 Maturity Price : 21.45 Evaluated at bid price : 21.45 Bid-YTW : 5.44 % |
| SLF.PR.E | Perpetual-Discount | -1.44 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-11-12 Maturity Price : 21.27 Evaluated at bid price : 21.27 Bid-YTW : 5.37 % |
| GWO.PR.I | Perpetual-Discount | -1.29 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-11-12 Maturity Price : 21.45 Evaluated at bid price : 21.45 Bid-YTW : 5.32 % |
| BAM.PR.G | FixedFloater | 1.09 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-11-12 Maturity Price : 25.00 Evaluated at bid price : 22.25 Bid-YTW : 3.50 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| MFC.PR.A | OpRet | 76,502 | RBC bought 10,000 from Nesbitt at 25.65, then crossed 63,400 at the same price. YTW SCENARIO Maturity Type : Soft Maturity Maturity Date : 2015-12-18 Maturity Price : 25.00 Evaluated at bid price : 25.59 Bid-YTW : 3.52 % |
| BAM.PR.T | FixedReset | 34,060 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-11-12 Maturity Price : 23.12 Evaluated at bid price : 25.08 Bid-YTW : 4.33 % |
| MFC.PR.C | Perpetual-Discount | 30,145 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-11-12 Maturity Price : 21.05 Evaluated at bid price : 21.05 Bid-YTW : 5.34 % |
| RY.PR.I | FixedReset | 28,316 | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-26 Maturity Price : 25.00 Evaluated at bid price : 26.57 Bid-YTW : 2.92 % |
| BNS.PR.M | Perpetual-Discount | 26,269 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-11-12 Maturity Price : 22.50 Evaluated at bid price : 22.65 Bid-YTW : 5.00 % |
| FTS.PR.H | FixedReset | 25,180 | YTW SCENARIO Maturity Type : Call Maturity Date : 2015-07-01 Maturity Price : 25.00 Evaluated at bid price : 26.01 Bid-YTW : 3.24 % |
| There were 31 other index-included issues trading in excess of 10,000 shares. | |||