Francois Hollande defeated French President Nicolas Sarkozy as voters handed control of the second-biggest European economy to the Socialists for the first time in 17 years.
The 57-year-old Hollande got about 52 percent against about 48 percent for Sarkozy, according to estimates by four pollsters. The campaign isn’t over. France elects its lower house of parliament in five weeks, prompting calls from backers of both candidates to keep fighting.
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While Socialists stand ready to dominate policy making for the first time since 1993 — holding both the presidency and the Cabinet — bond yields suggest Hollande may maintain market confidence. Ten-year French debt yields 124 basis points more than comparable German securities. That’s down from 145 basis points after he won the first round April 22 and lower than the 133 basis points at the start of the year.Concern of a Franco-German cleavage undermining economic policy making in the euro region is “exaggerated,” Morgan Stanley chief economist Joachim Fels wrote in a note today.
Greek politics is a Gordian knot – and that’s scary!
New Democracy leader Antonis Samaras began trying to put together a government after a Greek election that raised fresh questions about the country’s euro membership and triggered the biggest stock-market rout in four years.
Samaras was given three days from today to put together a coalition from an assembly split down the middle on whether to renege on the terms of bailout agreements negotiated since May 2010. New Democracy and the socialist Pasok party, rivals until the country’s crisis threw them into a national government together this year, are two seats short of the 151 seats needed for a parliamentary majority.
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New Democracy led in the election, receiving 19 percent of the vote and 108 seats in the 300-seat Parliament. Syriza got 17 percent to score 52 seats; Pasok came third with 13 percent and 41 seats.
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Should Samaras fail to get the necessary number of seats, the onus on forming a government will fall to bailout opponent Syriza, a coalition of left parties, which has vowed to cancel the bailout terms. After that, Pasok takes the baton.If the nine-day process fails to yield a coalition, President Papoulias may then try to broker a government of national unity. Should that process fail, new elections may be a possibility.
And, in fact, there is now a report that the baton has passed to the anti-austerity Syriza party:
Greek political leaders will meet for a second day today in a bid to form a government, with the mandate for the task being handed to the second-biggest party after New Democracy leader Antonis Samaras said he failed to forge agreement after an election that raised questions about the country’s euro membership.
Samaras gave up his bid after nearly six hours of talks in Athens yesterday. The attempt to form a government will pass to Alexis Tsipras, the head of Syriza, the second biggest party, which has vowed to cancel the bailout terms. Tsipras will see President Karolos Papoulias today at 2 p.m. Athens time.
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As voters across Europe rebel against austerity measures imposed to stamp out the debt crisis, Citigroup Inc. said yesterday the risk of Greece leaving the euro by the end of 2013 has risen as high as 75 percent. The election on May 6 propelled into Parliament a party that wants to put land mines on the border with Turkey and another that wants Germany, the country’s biggest donor, to pay World War II reparations. The benchmark ASE Stock index plunged 6.7 percent in Athens yesterday, its biggest drop in six months.
YLO released its results a day early:
Yellow Media Inc. (YLO-T0.100.0111.11%) reported a first-quarter loss of $2.9-billion as the struggling directory publisher wrote down the value of its assets.
The company also cancelled its annual meeting planned for Tuesday in Montreal after it said the number of shareholder votes received would not be enough to reach quorum.
Farcical, but more to the point is that print revenues declined more than expected and digital substitution was lower than expected.
It was a mixed day for the Canadian preferred share market, with PerpetualPremiums losing 12bp, FixedResets up 3bp and DeemedRetractibles gaining 6bp. Volatility was minimal, with no themes apparent. Volume was quite low.
| 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 | 0.2561 % | 2,512.1 |
| FixedFloater | 4.48 % | 3.84 % | 30,418 | 17.67 | 1 | -2.7064 % | 3,519.7 |
| Floater | 2.87 % | 2.89 % | 55,724 | 19.99 | 3 | 0.2561 % | 2,712.4 |
| OpRet | 4.76 % | 2.69 % | 51,818 | 1.11 | 5 | -0.1452 % | 2,507.5 |
| SplitShare | 5.24 % | 4.74 % | 63,956 | 0.61 | 4 | -0.1432 % | 2,696.3 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1452 % | 2,292.9 |
| Perpetual-Premium | 5.43 % | -2.51 % | 77,625 | 0.15 | 25 | -0.1208 % | 2,231.0 |
| Perpetual-Discount | 5.08 % | 5.11 % | 90,682 | 15.23 | 8 | -0.4312 % | 2,436.2 |
| FixedReset | 5.03 % | 3.02 % | 187,307 | 2.15 | 68 | 0.0349 % | 2,403.1 |
| Deemed-Retractible | 4.94 % | 3.53 % | 180,410 | 1.42 | 45 | 0.0617 % | 2,331.0 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| BAM.PR.G | FixedFloater | -2.71 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-05-07 Maturity Price : 22.12 Evaluated at bid price : 21.21 Bid-YTW : 3.84 % |
| W.PR.H | Perpetual-Premium | -1.55 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2013-01-15 Maturity Price : 25.00 Evaluated at bid price : 25.40 Bid-YTW : 3.64 % |
| BAM.PR.M | Perpetual-Discount | -1.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-05-07 Maturity Price : 22.86 Evaluated at bid price : 23.31 Bid-YTW : 5.13 % |
| BAM.PR.C | Floater | 1.68 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-05-07 Maturity Price : 18.20 Evaluated at bid price : 18.20 Bid-YTW : 2.90 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| BNS.PR.X | FixedReset | 75,501 | Desjardins crossed 75,000 at 26.64. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-25 Maturity Price : 25.00 Evaluated at bid price : 26.63 Bid-YTW : 2.91 % |
| CM.PR.M | FixedReset | 62,600 | TD crossed blocks of 35,000 and 23,600, both at 27.05. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-31 Maturity Price : 25.00 Evaluated at bid price : 27.06 Bid-YTW : 2.75 % |
| RY.PR.Y | FixedReset | 60,301 | RBC crossed 57,000 at 26.80. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-11-24 Maturity Price : 25.00 Evaluated at bid price : 26.81 Bid-YTW : 3.03 % |
| BNS.PR.Z | FixedReset | 54,673 | Desjardins crossed 49,300 at 25.10. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.07 Bid-YTW : 3.16 % |
| BMO.PR.Q | FixedReset | 50,101 | Desjardins sold 47,900 to anonymous at 25.65. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.61 Bid-YTW : 2.91 % |
| GWO.PR.P | Deemed-Retractible | 47,915 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.95 Bid-YTW : 5.08 % |
| There were 17 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| IAG.PR.A | Deemed-Retractible | Quote: 24.15 – 24.90 Spot Rate : 0.7500 Average : 0.4373 YTW SCENARIO |
| BAM.PR.G | FixedFloater | Quote: 21.21 – 21.86 Spot Rate : 0.6500 Average : 0.4013 YTW SCENARIO |
| IAG.PR.E | Deemed-Retractible | Quote: 25.85 – 26.47 Spot Rate : 0.6200 Average : 0.4443 YTW SCENARIO |
| W.PR.H | Perpetual-Premium | Quote: 25.40 – 25.75 Spot Rate : 0.3500 Average : 0.2300 YTW SCENARIO |
| BAM.PR.M | Perpetual-Discount | Quote: 23.31 – 23.64 Spot Rate : 0.3300 Average : 0.2147 YTW SCENARIO |
| CU.PR.B | Perpetual-Premium | Quote: 25.81 – 26.08 Spot Rate : 0.2700 Average : 0.1848 YTW SCENARIO |