The European crisis has come to a satisfactory conclusion: central bureaucrats will gain power:
The European Union’s push to unify bank oversight moved to the euro area after two days of talks in Brussels, putting the European Central Bank at the center of Spain’s efforts to extract its government from its financial- industry rescue.
Euro-area leaders asked for proposals this year to unify banking supervision and soup up the ECB’s powers. They referred to a clause in the EU treaty that allows them to give the ECB prudential oversight of banks and other non-insurance financial companies.
The move paves the way for the European Commission, the EU’s regulatory arm, to augment its proposals on deposit insurance, capital requirements and how to handle failing banks.
Speaking of regulatory mission-creep:
Last week, the Canadian Securities Administrators published for public comment a consultation paper on the potential regulation of proxy advisory firms. The move follows a similar path taken by the U.S. Securities and Exchange Commission, which has spent two years considering ways to regulate proxy advisers.
…
But as shareholder activism has grown, and as mutual funds have been required to step up disclosure of how they vote on corporate matters, the institutional community has increasingly leaned on proxy advisers to help them make their thousands of voting decisions.
That’s not quite right. It is the regulatory requirement to have a solid basis for the vote and to maintain records of that basis that has caused the growth of proxy advisory companies. Very nice and proper in theory, but a PM with – say – 50 stocks can’t do it and won’t do it. There’s only maybe one or two votes a year (tops) that have any meaning anyway. It’s a lot cheaper to hire a proxy advisory company and – presto! – box ticked.
It was a good day for the Canadian preferred share market, with PerpetualPremiums and DeemedRetractibles both up 16bp, while FixedResets gained 8bp. Lots of volatility heavily skewed towards SLF on the upside. Volume was below average.
| 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 | 0.4035 % | 2,299.4 |
| FixedFloater | 4.58 % | 3.97 % | 21,427 | 17.33 | 1 | -0.3367 % | 3,438.4 |
| Floater | 3.16 % | 3.16 % | 74,548 | 19.32 | 3 | 0.4035 % | 2,482.7 |
| OpRet | 4.79 % | 2.57 % | 35,425 | 0.98 | 5 | 0.0771 % | 2,520.2 |
| SplitShare | 5.25 % | -9.11 % | 42,109 | 0.47 | 4 | 0.1289 % | 2,729.1 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0771 % | 2,304.5 |
| Perpetual-Premium | 5.43 % | 3.92 % | 83,196 | 0.58 | 27 | 0.1555 % | 2,243.2 |
| Perpetual-Discount | 5.02 % | 5.01 % | 116,967 | 15.36 | 7 | 0.1062 % | 2,474.2 |
| FixedReset | 5.04 % | 3.15 % | 192,552 | 7.74 | 71 | 0.0839 % | 2,400.1 |
| Deemed-Retractible | 5.01 % | 3.90 % | 139,551 | 2.91 | 45 | 0.1613 % | 2,313.6 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| IAG.PR.A | Deemed-Retractible | -1.28 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.10 Bid-YTW : 5.67 % |
| CM.PR.D | Perpetual-Premium | 1.01 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2012-07-29 Maturity Price : 25.00 Evaluated at bid price : 25.96 Bid-YTW : -41.15 % |
| SLF.PR.E | Deemed-Retractible | 1.05 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.16 Bid-YTW : 6.12 % |
| SLF.PR.C | Deemed-Retractible | 1.06 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.99 Bid-YTW : 6.16 % |
| SLF.PR.D | Deemed-Retractible | 1.15 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.07 Bid-YTW : 6.11 % |
| SLF.PR.H | FixedReset | 1.35 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.77 Bid-YTW : 3.76 % |
| MFC.PR.C | Deemed-Retractible | 2.02 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.74 Bid-YTW : 5.79 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| BMO.PR.H | Deemed-Retractible | 155,729 | RBC crossed blocks of 73,000 and 75,000, both at 25.75. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-02-25 Maturity Price : 25.00 Evaluated at bid price : 25.71 Bid-YTW : 1.71 % |
| IAG.PR.F | Deemed-Retractible | 112,736 | RBC crossed blocks of 74,400 shares, 20,000 and 14,600, all at 25.70. YTW SCENARIO Maturity Type : Call Maturity Date : 2019-03-31 Maturity Price : 25.00 Evaluated at bid price : 25.70 Bid-YTW : 5.44 % |
| IAG.PR.G | FixedReset | 63,625 | Recent new issue. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.06 Bid-YTW : 4.23 % |
| TD.PR.G | FixedReset | 59,303 | TD crossed 51,000 shares at 26.85. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-30 Maturity Price : 25.00 Evaluated at bid price : 26.81 Bid-YTW : 2.75 % |
| PWF.PR.G | Perpetual-Premium | 55,175 | TD crossed 49,000 at 25.46. YTW SCENARIO Maturity Type : Call Maturity Date : 2012-07-29 Maturity Price : 25.00 Evaluated at bid price : 25.45 Bid-YTW : -4.30 % |
| BNS.PR.Q | FixedReset | 51,065 | Nesbitt crossed 35,000 at 25.25. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.32 Bid-YTW : 3.04 % |
| There were 24 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| MFC.PR.F | FixedReset | Quote: 23.52 – 23.99 Spot Rate : 0.4700 Average : 0.2657 YTW SCENARIO |
| MFC.PR.B | Deemed-Retractible | Quote: 22.93 – 23.38 Spot Rate : 0.4500 Average : 0.2876 YTW SCENARIO |
| IAG.PR.A | Deemed-Retractible | Quote: 23.10 – 23.60 Spot Rate : 0.5000 Average : 0.3416 YTW SCENARIO |
| MFC.PR.D | FixedReset | Quote: 26.51 – 26.87 Spot Rate : 0.3600 Average : 0.2255 YTW SCENARIO |
| CM.PR.K | FixedReset | Quote: 26.15 – 26.45 Spot Rate : 0.3000 Average : 0.2002 YTW SCENARIO |
| TD.PR.Y | FixedReset | Quote: 25.61 – 25.86 Spot Rate : 0.2500 Average : 0.1550 YTW SCENARIO |