I have long been amused that monetary loosening intended to provoke investment in productivity enhancing endeavors has instead had the result of inflating housing bubbles; and now Citibank says there’s another problem:
Worldwide quantitative easing may be making investors richer rather than encouraging business investment, according to Citigroup Inc. (C)
Fulfilling the goals of central bankers such as Federal Reserve Chairman Ben S. Bernanke, ultra-low interest rates and bond purchases are encouraging investors to buy stocks. Policy makers’ intent was that asset prices and wealth would rise, encouraging consumers and businesses to spend more.
The sticking point is the particular equities investors are favoring, Robert Buckland, Citigroup’s London-based chief global equity strategist, said in a Nov. 21 report. His research suggests they tend to choose companies that issue dividends and buy back shares rather than those that invest in the economy.
It was a modest day in the Canadian preferred share market, with PerpetualPremiums up 4bp while FixedResets and DeemedRetractibles both gained 2bp. Volatility was low but entirely comprised of losers. Volume was high.
And that’s it for another month!
| 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 | 0.1600 % | 2,470.7 |
| FixedFloater | 4.18 % | 3.53 % | 27,289 | 18.24 | 1 | 0.3532 % | 3,849.9 |
| Floater | 2.80 % | 3.00 % | 58,323 | 19.66 | 4 | 0.1600 % | 2,667.7 |
| OpRet | 4.61 % | 2.67 % | 49,529 | 0.54 | 4 | -0.2937 % | 2,591.4 |
| SplitShare | 5.45 % | 4.85 % | 66,461 | 4.44 | 3 | 0.0000 % | 2,855.0 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.2937 % | 2,369.6 |
| Perpetual-Premium | 5.25 % | 1.71 % | 72,608 | 0.23 | 30 | 0.0362 % | 2,319.4 |
| Perpetual-Discount | 4.86 % | 4.89 % | 125,232 | 15.58 | 4 | 0.2651 % | 2,618.8 |
| FixedReset | 5.00 % | 2.98 % | 210,799 | 4.17 | 75 | 0.0176 % | 2,446.4 |
| Deemed-Retractible | 4.91 % | 2.39 % | 116,928 | 0.48 | 46 | 0.0178 % | 2,406.4 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| MFC.PR.G | FixedReset | -1.55 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2016-12-19 Maturity Price : 25.00 Evaluated at bid price : 25.40 Bid-YTW : 3.93 % |
| BAM.PR.O | OpRet | -1.47 % | YTW SCENARIO Maturity Type : Option Certainty Maturity Date : 2013-06-30 Maturity Price : 25.00 Evaluated at bid price : 25.51 Bid-YTW : 2.95 % |
| GWO.PR.N | FixedReset | -1.46 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.60 Bid-YTW : 3.68 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| FTS.PR.J | Perpetual-Premium | 186,070 | Recent new issue. YTW SCENARIO Maturity Type : Call Maturity Date : 2021-12-01 Maturity Price : 25.00 Evaluated at bid price : 25.23 Bid-YTW : 4.68 % |
| BMO.PR.P | FixedReset | 185,604 | National crossed blocks of 40,000 shares, 49,800 and 80,000, all at 26.65. YTW SCENARIO Maturity Type : Call Maturity Date : 2015-02-25 Maturity Price : 25.00 Evaluated at bid price : 26.65 Bid-YTW : 2.40 % |
| TD.PR.K | FixedReset | 144,246 | Nesbitt crossed 35,000 at 26.90; RBC crossed 100,000 at the same price. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-31 Maturity Price : 25.00 Evaluated at bid price : 26.85 Bid-YTW : 2.05 % |
| TD.PR.S | FixedReset | 128,253 | RBC crossed 100,000 at 24.72. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.72 Bid-YTW : 3.27 % |
| TD.PR.Q | Deemed-Retractible | 127,800 | Scotia crossed 75,000 at 26.50, then bought blocks of 14,200 shares, 10,800 and 12,400 from Nesbitt at the same price. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-01-31 Maturity Price : 26.00 Evaluated at bid price : 26.45 Bid-YTW : -2.16 % |
| BAM.PF.C | Perpetual-Discount | 106,760 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-11-30 Maturity Price : 24.21 Evaluated at bid price : 24.58 Bid-YTW : 4.94 % |
| There were 41 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| BAM.PR.O | OpRet | Quote: 25.51 – 26.01 Spot Rate : 0.5000 Average : 0.3118 YTW SCENARIO |
| MFC.PR.G | FixedReset | Quote: 25.40 – 25.78 Spot Rate : 0.3800 Average : 0.2113 YTW SCENARIO |
| MFC.PR.A | OpRet | Quote: 25.63 – 26.22 Spot Rate : 0.5900 Average : 0.4486 YTW SCENARIO |
| IAG.PR.F | Deemed-Retractible | Quote: 26.53 – 26.77 Spot Rate : 0.2400 Average : 0.1457 YTW SCENARIO |
| POW.PR.G | Perpetual-Premium | Quote: 26.86 – 27.19 Spot Rate : 0.3300 Average : 0.2468 YTW SCENARIO |
| SLF.PR.E | Deemed-Retractible | Quote: 23.94 – 24.14 Spot Rate : 0.2000 Average : 0.1332 YTW SCENARIO |