Hands up who’s happy it’s not June!
Witness the record $61.7 billion of redemptions in U.S.-listed bond mutual funds and exchange-traded funds through June 24, according to TrimTabs Investment Research. That sum broke the previous monthly high of $41.8 billion, set in the scary days of October 2008.
“The unprecedented liquidation of bonds this month is a dramatic departure from recent trends,” David Santschi, chief executive officer of TrimTabs, said in a statement. “Before June, bond funds had posted inflows for 21 consecutive months.”
In May, Bill Gross’s Pimco Total Return Fund—the world’s largest—saw its first monthly withdrawals since 2011.
…
Also whipsawing is the otherwise sleepy $3.7 trillion municipal bond market, where the largest exchange-traded fund tracking the sector had its best two days since 2008 after falling to the cheapest price in two years. The $3.4 billion iShares S&P National AMT-Free Municipal Bond Fund, known as MUB, sold at a record 2.86 percent discount to the value of its assets on June 21 after Federal Reserve Chairman Ben Bernanke said the central bank may moderate purchases of federal and mortgage debt in 2013 and stop them around mid-2014.The ratio of the yield of munis to those on Treasuries is about 115 percent, the highest since July 2012.
The factoids regarding US municipals is relevant to the Canadian preferred share market, since the motivation for owning them and the broad outlines of the investor base are similar.
OSC expenses are up 5.5% over last year, but revenue is up only a little more than inflation, at 2%. Some say this shows revenue isn’t growing fast enough.
Does this remind anyone of Toronto?
San Francisco’s median house price is poised to surpass $1 million this year after setting a record in May, the California Association of Realtors estimates. The county is the only one in the state with values to set a new high, said Leslie Appleton-Young, chief economist for the group. A limited supply of houses available for sale has allowed condo developers to step in and lure frustrated buyers such as Boortz.
Tishman Speyer Properties LP’s 655 luxury units in two towers south of the financial district, and the first phase of Lennar Corp. (LEN)’s Hunters Point project at a former naval shipyard with 480 studios and townhomes, are both scheduled to break ground today, according to the companies. The projects will add to 709 condos that were under way in the city at the end of May, according to Mark Co., a San Francisco-based firm specializing in condo marketing, the most since 2008.
Well – maybe this part is different:
Buyers have been making down payments of 35 percent in a market awash in wealth from tech workers and overseas investors, Mark said.
Still, SF’s condo boom is small potatoes by Toronto standards:
In March, active condo listings for sale on the MLS rose 8 per cent over last year to hit a record high for the month. At the same time, condo sales slumped 18 per cent. Compounding this growing supply-demand imbalance is the 55,000 new condo units currently under construction in the city, the majority of which are set to hit the market through the rest of the year and into 2014.
San Francisco has a population of only 800-odd thousand, but still!
Oh, boy! Nowadays an eager young kid can get a Bachelor of Boxtickingology!
York University’s business school has created a new specialty program to train business students to become financial regulators – or at least to work with them from within the banking industry.
The Schulich School of Business said Tuesday it has created a new 12-month specialty stream called regulatory affairs for financial institutions as part of its Masters of Finance program.
It was another day of solid recovery for the Canadian preferred share market, with PerpetualDiscounts (yes! They now outnumber PerpetualPremiums!) winning 36bp, FixedResets gaining 10bp and DeemedRetractibles up 18bp. The performance highlights table is suitably lengthy, markedly skewed towards winners. Volume was very low.
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
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| 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 | -0.9070 % | 2,555.9 |
| FixedFloater | 4.22 % | 3.55 % | 44,067 | 18.17 | 1 | -1.0110 % | 3,894.8 |
| Floater | 2.75 % | 2.91 % | 78,684 | 19.99 | 4 | -0.9070 % | 2,759.7 |
| OpRet | 4.86 % | 3.34 % | 68,375 | 0.16 | 5 | 0.0704 % | 2,611.7 |
| SplitShare | 4.68 % | 4.26 % | 78,034 | 3.97 | 6 | 0.0731 % | 2,962.7 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0704 % | 2,388.2 |
| Perpetual-Premium | 5.61 % | 3.53 % | 106,302 | 0.08 | 12 | 0.0960 % | 2,275.2 |
| Perpetual-Discount | 5.37 % | 5.39 % | 144,304 | 14.71 | 26 | 0.3579 % | 2,391.3 |
| FixedReset | 4.95 % | 3.47 % | 243,020 | 3.60 | 83 | 0.1038 % | 2,482.0 |
| Deemed-Retractible | 5.05 % | 4.52 % | 178,404 | 4.88 | 44 | 0.1852 % | 2,388.6 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| CIU.PR.C | FixedReset | -9.45 % | A ludicrous quote since no shares traded today and the last trade was at 24.35. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-07-02 Maturity Price : 21.80 Evaluated at bid price : 22.05 Bid-YTW : 3.67 % |
| TRI.PR.B | Floater | -1.66 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-07-02 Maturity Price : 22.88 Evaluated at bid price : 23.15 Bid-YTW : 2.25 % |
| BAM.PR.G | FixedFloater | -1.01 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-07-02 Maturity Price : 22.83 Evaluated at bid price : 22.52 Bid-YTW : 3.55 % |
| SLF.PR.G | FixedReset | 1.07 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.51 Bid-YTW : 3.62 % |
| GWO.PR.I | Deemed-Retractible | 1.11 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.80 Bid-YTW : 5.57 % |
| GWO.PR.R | Deemed-Retractible | 1.13 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.27 Bid-YTW : 5.17 % |
| HSE.PR.A | FixedReset | 1.26 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-07-02 Maturity Price : 23.38 Evaluated at bid price : 24.87 Bid-YTW : 3.56 % |
| BAM.PF.D | Perpetual-Discount | 1.29 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-07-02 Maturity Price : 22.42 Evaluated at bid price : 22.72 Bid-YTW : 5.43 % |
| VNR.PR.A | FixedReset | 1.39 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2017-10-15 Maturity Price : 25.00 Evaluated at bid price : 25.60 Bid-YTW : 4.00 % |
| CU.PR.G | Perpetual-Discount | 1.67 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-07-02 Maturity Price : 22.17 Evaluated at bid price : 22.52 Bid-YTW : 5.05 % |
| BAM.PF.C | Perpetual-Discount | 1.67 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-07-02 Maturity Price : 21.56 Evaluated at bid price : 21.88 Bid-YTW : 5.56 % |
| BNS.PR.K | Deemed-Retractible | 1.84 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2013-08-01 Maturity Price : 25.25 Evaluated at bid price : 25.50 Bid-YTW : -11.49 % |
| GWO.PR.F | Deemed-Retractible | 2.03 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2013-08-01 Maturity Price : 25.00 Evaluated at bid price : 25.13 Bid-YTW : -0.04 % |
| BAM.PR.X | FixedReset | 3.20 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-07-02 Maturity Price : 22.93 Evaluated at bid price : 24.16 Bid-YTW : 3.83 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| PWF.PR.R | Perpetual-Discount | 33,290 | Scotia crossed 27,800 at 25.00. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-07-02 Maturity Price : 24.64 Evaluated at bid price : 25.05 Bid-YTW : 5.57 % |
| ENB.PR.F | FixedReset | 30,540 | National crossed 25,000 at 25.05. YTW SCENARIO Maturity Type : Call Maturity Date : 2018-06-01 Maturity Price : 25.00 Evaluated at bid price : 25.03 Bid-YTW : 4.07 % |
| BNS.PR.R | FixedReset | 28,799 | TD bought 10,000 from CIBC at 25.07. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.07 Bid-YTW : 3.67 % |
| ENB.PR.P | FixedReset | 19,138 | YTW SCENARIO Maturity Type : Call Maturity Date : 2019-03-01 Maturity Price : 25.00 Evaluated at bid price : 25.08 Bid-YTW : 4.02 % |
| TD.PR.S | FixedReset | 16,705 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.06 Bid-YTW : 3.47 % |
| BAM.PF.D | Perpetual-Discount | 16,445 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-07-02 Maturity Price : 22.42 Evaluated at bid price : 22.72 Bid-YTW : 5.43 % |
| There were 15 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| CIU.PR.C | FixedReset | Quote: 22.05 – 25.00 Spot Rate : 2.9500 Average : 1.7846 YTW SCENARIO |
| IAG.PR.F | Deemed-Retractible | Quote: 25.65 – 26.11 Spot Rate : 0.4600 Average : 0.2800 YTW SCENARIO |
| BAM.PF.A | FixedReset | Quote: 25.35 – 25.85 Spot Rate : 0.5000 Average : 0.3525 YTW SCENARIO |
| BNS.PR.T | FixedReset | Quote: 25.55 – 25.87 Spot Rate : 0.3200 Average : 0.2041 YTW SCENARIO |
| TRI.PR.B | Floater | Quote: 23.15 – 23.60 Spot Rate : 0.4500 Average : 0.3392 YTW SCENARIO |
| RY.PR.C | Deemed-Retractible | Quote: 25.19 – 25.46 Spot Rate : 0.2700 Average : 0.1732 YTW SCENARIO |