There was a thought-provoking comment in a Globe & Mail story on the Ukraine’s importance to the global grain trade:
One thing I don’t see in this article: to what extent is Ukraine dependant on Crimean ports for its grain exports?
There’s a very good infographic published by Lloyd’s List … most of the shipping is from western ports around Odessa, but there are quite a few busy ports in the Crimea. Lloyd’s List has a long string of articles about the Crimean situation, but there’s a pay-wall. One purported reprint claims:
“But the situation with the sea ports is much more serious, because the Crimean ports cover nearly 5.4m tonnes of potential shipment volumes, through Sevastopol, Kerch and Feodosia,” said Mr [Rodion] Rybchinskiy [head of the business projects division at APK-Inform, a Russian-owned agricultural consultancy with a Kiev office].
His expectation is that secession after Sunday’s referendum will see grain shipments changed to ports that remain in Ukraine, namely Odessa, Nikolayev and Kherson, which stand to benefit from the situation.
Bloomberg’s Matt Levine highlights the fact that competent traders don’t get cheated:
He then tendered it into the quantitative easing auction at the end of that day, and … oops! The BOE decided to be price-sensitive, for the only time ever,3 because this bond’s price got really out of whack, and because other dealers called the BOE to complain, as you’d expect them to:
By 09:39 (38 minutes after Mr Stevenson began trading in the Bond), a market participant had telephoned the BOE regarding the Bond’s outperformance. Several other market participants telephoned the BOE throughout the day, suggesting that the Bond had been “squeezed”, “rammed”, and that someone “was messing around with” it.
No honor among thieves etc. So the BOE didn’t buy any of the bond that Stevenson was trading, its price got right back into whack, and Stevenson lost a lot of money:
…
One lesson here is, if you’re going to manipulate markets, you should be really sure that your price-insensitive buyer is in fact price-insensitive,4 and a buyer.
Which is exactly what should be happening, but Stevenson’s been banned from the industry anyway, just to prove how rough and tough the regulators are in their desire to protect incompetent traders from facing the consequences of their incompetence. This ensures that there will always be lots of incompetent traders, and hence a need to protect them.
We might soon be getting crowdfunding:
Crowdfunding would be available to Canadian issuers (both reporting issuers and non-reporting issuers), other than investment funds, non-reporting real estate issuers and issuers without a written business plan. Under the exemption, a crowdfunding issuer, its affiliates and others in a common enterprise with the issuer would be permitted to raise an aggregate of $1.5 million within any 12-month period. (The British Columbia proposal limits a crowdfunding issuer to two offerings of a maximum of $150,000 each over any calendar year). Investment by a purchaser under the proposed OSC exemption would be limited to $2,500 per single investment with a $10,000 aggregate limit on all crowdfunding investments for each calendar year.
Investors must receive a disclosure document containing basic information about the offering, the issuer and the funding portal and sign a risk acknowledgement form. If the issuer has incurred expenditures prior to using the exemption, the disclosure document would be required to include annual financial statements and, if specified capital raising ($500,000) or expenditure ($150,000) thresholds have been surpassed by the issuer, the financial statements would haved to be audited. Investors will have a right of action for damages or rescission if any materials made available to them by the issuer, including the disclosure document, contain a misrepresentation, and will have 48 hours prior to the disclosed offering deadline to withdraw their subscription.
I’m sure I’m way behind the curve on this one, but I’ve become aware of a new trend in Toronto real-estate:
In some cases, the eye-popping amounts that some home buyers are flinging around in order to win bidding wars in Toronto these days lead to an inevitable question.
“I wonder what it will get appraised for,” speculate the real estate agents who keep an eye on the action.
In other words, a bidder who pays $150,000 above an asking price of, say, $700,000 or $800,000 better hope that an appraiser won’t balk at the selling price if the buyer hopes to have a mortgage and mortgage insurance.
Mr. Fleming says bidders who are tempted to overpay in their desperation to obtain a house can run into difficulty if the property appraiser estimates that the house is worth far less. He says deals don’t often fall through but buyers should be aware of the pitfalls. “I think it very rarely happens. But if you don’t have the minimum required, you end up having to go to the bank of mom and dad.”
A buddy of mine recently sold her condominium for about $150,000. She got one lowball and two acceptable offers … both of the acceptable offers were conditional on financing and were void when the CMHC turned down the banks’ applications for insurance. She’s sold it now, thanks to the purchaser’s Bank of Mom and Dad.
It was a fine day for the Canadian preferred share market, with PerpetualDiscounts up 16bp, FixedResets winning 24bp and DeemedRetractibles gaining 4bp. Volatility was average, but comprised exclusively of FixedReset winners. Volume was 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 | -0.2141 % | 2,422.6 |
| FixedFloater | 4.72 % | 4.32 % | 37,106 | 17.70 | 1 | 0.0995 % | 3,594.2 |
| Floater | 3.00 % | 3.11 % | 52,099 | 19.46 | 4 | -0.2141 % | 2,615.8 |
| OpRet | 4.65 % | -0.19 % | 87,881 | 0.25 | 3 | 0.0388 % | 2,685.2 |
| SplitShare | 4.81 % | 4.34 % | 67,069 | 4.31 | 5 | 0.2149 % | 3,082.0 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0388 % | 2,455.3 |
| Perpetual-Premium | 5.64 % | -2.06 % | 90,443 | 0.08 | 11 | 0.0902 % | 2,356.7 |
| Perpetual-Discount | 5.45 % | 5.48 % | 118,912 | 14.52 | 26 | 0.1578 % | 2,441.3 |
| FixedReset | 4.69 % | 3.50 % | 224,184 | 6.81 | 79 | 0.2379 % | 2,514.7 |
| Deemed-Retractible | 5.06 % | 3.04 % | 155,288 | 0.28 | 42 | 0.0434 % | 2,467.9 |
| FloatingReset | 2.57 % | 2.56 % | 192,475 | 7.09 | 5 | 0.0321 % | 2,443.9 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| MFC.PR.F | FixedReset | 1.03 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.53 Bid-YTW : 4.44 % |
| IAG.PR.G | FixedReset | 1.12 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2017-06-30 Maturity Price : 25.00 Evaluated at bid price : 26.07 Bid-YTW : 2.89 % |
| FTS.PR.H | FixedReset | 1.18 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-21 Maturity Price : 21.51 Evaluated at bid price : 21.51 Bid-YTW : 3.63 % |
| SLF.PR.G | FixedReset | 1.45 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.43 Bid-YTW : 4.35 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| RY.PR.Z | FixedReset | 194,190 | RBC crossed 148,700 at 25.50; Scotia crossed 26,300 at the same price. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-21 Maturity Price : 23.31 Evaluated at bid price : 25.50 Bid-YTW : 3.65 % |
| MFC.PR.L | FixedReset | 146,600 | Recent new issue. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.46 Bid-YTW : 4.12 % |
| NA.PR.Q | FixedReset | 145,175 | RBC crossed 55,000 at 25.95, bought three blocks of 10,000 each from TD at 25.94, then another 19,900 from TD at 25.94. TD crossed 30,000 at 25.94. YTW SCENARIO Maturity Type : Call Maturity Date : 2017-11-15 Maturity Price : 25.00 Evaluated at bid price : 25.92 Bid-YTW : 2.85 % |
| RY.PR.W | Perpetual-Discount | 88,300 | Nesbitt crossed 83,200 at 25.08. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-20 Maturity Price : 25.00 Evaluated at bid price : 25.10 Bid-YTW : 4.13 % |
| BNS.PR.T | FixedReset | 79,212 | Scotia crossed two blocks of 36,800 each, both at 25.34. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-25 Maturity Price : 25.00 Evaluated at bid price : 25.35 Bid-YTW : 0.21 % |
| BMO.PR.R | FloatingReset | 64,720 | Scotia crossed 60,000 at 24.80. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.80 Bid-YTW : 2.56 % |
| There were 30 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| IFC.PR.C | FixedReset | Quote: 25.58 – 25.94 Spot Rate : 0.3600 Average : 0.2351 YTW SCENARIO |
| ELF.PR.F | Perpetual-Discount | Quote: 23.35 – 23.88 Spot Rate : 0.5300 Average : 0.4194 YTW SCENARIO |
| MFC.PR.F | FixedReset | Quote: 22.53 – 22.84 Spot Rate : 0.3100 Average : 0.1999 YTW SCENARIO |
| ELF.PR.H | Perpetual-Discount | Quote: 24.32 – 24.60 Spot Rate : 0.2800 Average : 0.1973 YTW SCENARIO |
| ELF.PR.G | Perpetual-Discount | Quote: 21.58 – 21.98 Spot Rate : 0.4000 Average : 0.3274 YTW SCENARIO |
| RY.PR.C | Deemed-Retractible | Quote: 25.66 – 25.88 Spot Rate : 0.2200 Average : 0.1582 YTW SCENARIO |