There is talk of a merger between the TMX and the London Stock Exchange:
London Stock Exchange Group Plc is in advanced talks to purchase TMX Group Inc., owner of the Toronto Stock Exchange, to create the world’s eighth-largest exchange operator by market value.
LSE plans to issue stock according to a ratio that is similar to the companies’ relative market values, according to e-mailed statements. LSE would control 56 percent of the combined entity given its market capitalization of 2.42 billion British pounds ($3.89 billion) and TMX’s C$3 billion ($3.01 billion), according to data compiled by Bloomberg.
…
The exchanges will have headquarters in London and Toronto and maintain their current regulators, according to their e- mailed statements. Management of the merged company will be drawn from “a balance of leaders from both organizations,” the statements said.Trading of TMX Group was halted, according to exchange data sent at 4:24 p.m. Toronto time today. The company is scheduled to report quarterly financial results tomorrow.
The guy who owns The Tea Emporium in First Canadian Place must be ecstatic.
DBRS has commented on the SEC’s Credit Rating Standardization Study:
This provision requires the Commission to study the feasibility and desirability of standardizing credit rating terminology and standardizing and streamlining certain quantitative measures under four broad topics.[Footnote] Within one year of enactment of the Dodd-Frank Act, the Commission must submit to Congress a report containing the findings of the study and the Commission’s recommendations, if any, with respect to the study.
DBRS suggests that credit rating standardization is neither desirable nor feasible. In short, DBRS endorses the views expressed by the American Securitization Forum on this matter.
Footnote: The four broad areas are: (1) standardizing credit ratings terminology, so that all credit rating agencies issue credit ratings using identical terms; (2) standardizing the market stress conditions under which ratings are evaluated; (3) requiring a quantitative correspondence between credit ratings and a range of default probabilities and loss expectations under standardized conditions of economic stress; and (4) standardizing credit rating terminology across asset classes, so that named ratings correspond to a standard range of default probabilities and expected losses independent of asset class and issuing entity.
I haven’t been following this at all, but the whole project seems ill-advised to me at first glance. As an investor, I want a broad range of opinions, particularly in relation to market stress and economic stress. The whole point seems to be to quantify your guesses down to four decimal places; the type of project beloved of bureaucracy.
Robert Shiller doubts the ‘better living through better regulation’ story:
Robert Shiller, the Yale professor who correctly predicted the 1987 stock market collapse and the recent U.S. housing market meltdown, said Canada’s robust financial health compared to other nations is largely due to a random run-up in oil prices in the midst of the global financial crisis.
“It’s a major export for Canada and it went to US$140 a barrel in 2008, right when Canada needed it,” Prof. Shiller said in an interview Tuesday.
…
“It seems that if the country didn’t have that boost from oil, it would have done worse than the United States,” Prof. Shiller said.
The market came down a bit after yesterday’s euphoric response to the OSFI ruling, with PerpetualDiscounts flat, FixedResets down 29bp and DeemedRetractibles down 31bp. Volume was heavy.
| 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 | -0.1070 % | 2,396.5 |
| FixedFloater | 4.79 % | 3.50 % | 22,073 | 19.08 | 1 | 0.0000 % | 3,553.1 |
| Floater | 2.50 % | 2.29 % | 43,689 | 21.53 | 4 | -0.1070 % | 2,587.6 |
| OpRet | 4.82 % | 3.79 % | 64,667 | 2.24 | 8 | -0.1447 % | 2,383.5 |
| SplitShare | 5.30 % | 1.69 % | 314,722 | 0.83 | 4 | 0.0600 % | 2,466.3 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1447 % | 2,179.5 |
| Perpetual-Premium | 5.74 % | 5.36 % | 118,719 | 2.54 | 9 | 0.0088 % | 2,033.8 |
| Perpetual-Discount | 5.55 % | 5.62 % | 128,750 | 14.43 | 15 | 0.0000 % | 2,108.5 |
| FixedReset | 5.24 % | 3.76 % | 169,672 | 3.06 | 54 | -0.2907 % | 2,260.5 |
| Deemed-Retractible | 5.22 % | 5.26 % | 432,187 | 8.28 | 53 | -0.3085 % | 2,074.8 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| CM.PR.J | Deemed-Retractible | -1.63 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.56 Bid-YTW : 5.24 % |
| MFC.PR.B | Deemed-Retractible | -1.52 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.65 Bid-YTW : 5.99 % |
| RY.PR.F | Deemed-Retractible | -1.46 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.66 Bid-YTW : 5.10 % |
| RY.PR.D | Deemed-Retractible | -1.17 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.64 Bid-YTW : 5.16 % |
| GWO.PR.J | FixedReset | -1.11 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-01-30 Maturity Price : 25.00 Evaluated at bid price : 26.75 Bid-YTW : 3.73 % |
| RY.PR.G | Deemed-Retractible | -1.04 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.68 Bid-YTW : 5.14 % |
| SLF.PR.A | Deemed-Retractible | -1.02 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.25 Bid-YTW : 5.71 % |
| HSB.PR.C | Deemed-Retractible | 1.49 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.51 Bid-YTW : 5.44 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| BAM.PR.X | FixedReset | 206,559 | New issue settled today YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-02-08 Maturity Price : 22.99 Evaluated at bid price : 24.70 Bid-YTW : 4.55 % |
| BMO.PR.O | FixedReset | 199,060 | Nesbitt crossed 50,000 at 27.76; Desjardins crossed 135,000 at the same price. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-06-24 Maturity Price : 25.00 Evaluated at bid price : 27.62 Bid-YTW : 3.20 % |
| TCA.PR.Y | Perpetual-Premium | 139,750 | Nesbitt crossed blocks of 110,000 and 26,500, both at 50.50. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-04 Maturity Price : 50.00 Evaluated at bid price : 50.45 Bid-YTW : 5.36 % |
| BNS.PR.M | Deemed-Retractible | 131,195 | Nesbitt crossed 25,000 at 23.85 and 12,300 at 23.86, followed by another 50,000 at 23.85. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.84 Bid-YTW : 5.10 % |
| BMO.PR.N | FixedReset | 91,668 | Desjardins crossed three blocks, two of 20,000 and one of 50,000, all at 27.55. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-27 Maturity Price : 25.00 Evaluated at bid price : 27.51 Bid-YTW : 3.04 % |
| NA.PR.N | FixedReset | 49,500 | Desjardins crossed blocks of 29,300 and 19,000, both at 26.40. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-09-14 Maturity Price : 25.00 Evaluated at bid price : 26.33 Bid-YTW : 3.16 % |
| There were 59 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| MFC.PR.B | Deemed-Retractible | Quote: 22.65 – 23.12 Spot Rate : 0.4700 Average : 0.3030 YTW SCENARIO |
| TRP.PR.A | FixedReset | Quote: 26.10 – 26.45 Spot Rate : 0.3500 Average : 0.2348 YTW SCENARIO |
| IAG.PR.F | Deemed-Retractible | Quote: 25.50 – 25.74 Spot Rate : 0.2400 Average : 0.1351 YTW SCENARIO |
| RY.PR.G | Deemed-Retractible | Quote: 23.68 – 23.90 Spot Rate : 0.2200 Average : 0.1246 YTW SCENARIO |
| CM.PR.J | Deemed-Retractible | Quote: 23.56 – 23.81 Spot Rate : 0.2500 Average : 0.1546 YTW SCENARIO |
| TD.PR.G | FixedReset | Quote: 26.78 – 27.07 Spot Rate : 0.2900 Average : 0.1994 YTW SCENARIO |