Yesterday I mentioned redemptions in property funds in the UK and the suspension of redemptions in the Standard Life fund. Standard Life has company!
Three of the U.K.’s largest real estate funds have frozen almost 9.1 billion pounds ($12 billion) of assets after Britain’s shock vote to leave the European Union sparked a flurry of redemptions.
M&G Investments, Aviva Investors and Standard Life Investments halted withdrawals because they don’t have enough cash to immediately repay investors. About 24.5 billion pounds is allocated to U.K. real estate funds, according to the Investment Association.
…
The rush by private investors to withdraw money prompted M&G, which held 7.7 percent in cash before the vote, to suspend its 4.4 billion-pound Property Portfolio fund and Aviva Investors to freeze its 1.8 billion-pound Property Trust on Tuesday. Standard Life halted trading on its 2.9 billion-pound U.K. real estate fund on Monday. The cash position for Aviva and Standard Life’s funds at the end of May was 9.3 percent and 13.1 percent respectively, documents showed.
There has been concern for a long time about the effects of having a very liquid layer of ETFs representing investments in highly illiquid assets, so it will be interesting to see how this plays out. Have investors been over-paying for liquidity? Will the regulators develop so many liquidity rules that the sector cannot function?
The federal Bombardier bail-out is on hold:
Canadian Prime Minister Justin Trudeau’s government doesn’t expect to reach an aid deal with aircraft manufacturer Bombardier Inc. before the fall, according to officials familiar with the talks.
…
Innovation Minister Navdeep Bains, the government’s point-person in negotiations, is due to meet with Bombardier executives next week at the Farnborough International Airshow. Negotiations, however, remain stalled and Trudeau’s team expects no developments this summer, believing Bombardier has a year or more before it faces a serious cash crunch, the officials said, speaking on condition of anonymity as the talks are private.
Some analysts are attempting to come to grips with the effect of self-driving cars:
But what if by 2030 more people are willing to embrace self-driving cars? All the legal and regulatory issues have been ironed out and people have grown comfortable with the idea of riding rather than driving. Under this scenario, 30 percent of cars belong to shared autonomous fleets. Another 23 percent of privately owned cars are fully autonomous. Only 47 percent of the cars are private conventional vehicles.
This shift to higher-occupancy, longer-lasting vehicles would result in an 8.6 percent decline in vehicle sales (compared to the baseline 16.5 million units that would be needed to meet organic demand in 2030 if nothing changed.)
In the most extreme scenario, the number of cars on the road would fall by half because more people would rely on shared, autonomous vehicles rather than privately owned vehicles. (Call Uber for a ride, and a robot car would pick you up, or take a train to the city, and hop in a driverless cab for the last mile. Even families could share one autonomous car.)
Those shared vehicles would rack up miles faster, however, so they would need to be replaced sooner. The net result for automakers: a 26 percent drop in vehicle demand.
| 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 | -0.1264 % | 1,654.2 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1264 % | 3,021.9 |
| Floater | 4.93 % | 4.70 % | 92,178 | 16.07 | 4 | -0.1264 % | 1,741.5 |
| OpRet | 4.86 % | 2.17 % | 37,869 | 0.16 | 1 | -0.0396 % | 2,839.1 |
| SplitShare | 5.14 % | 5.63 % | 94,382 | 4.61 | 5 | -0.0404 % | 3,349.6 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0404 % | 2,613.5 |
| Perpetual-Premium | 5.50 % | -6.20 % | 81,051 | 0.09 | 12 | 0.1074 % | 2,654.4 |
| Perpetual-Discount | 5.33 % | 5.35 % | 101,325 | 14.90 | 26 | 0.0642 % | 2,769.5 |
| FixedReset | 5.15 % | 4.39 % | 150,785 | 7.18 | 88 | -0.4042 % | 1,966.0 |
| Deemed-Retractible | 5.07 % | 5.11 % | 128,812 | 4.88 | 33 | 0.1612 % | 2,735.1 |
| FloatingReset | 3.01 % | 5.09 % | 33,455 | 5.16 | 11 | -0.5871 % | 2,081.2 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| TRP.PR.H | FloatingReset | -8.50 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-05 Maturity Price : 9.15 Evaluated at bid price : 9.15 Bid-YTW : 4.87 % |
| TRP.PR.A | FixedReset | -3.45 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-05 Maturity Price : 14.00 Evaluated at bid price : 14.00 Bid-YTW : 4.74 % |
| TRP.PR.C | FixedReset | -3.32 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-05 Maturity Price : 11.65 Evaluated at bid price : 11.65 Bid-YTW : 4.60 % |
| TRP.PR.B | FixedReset | -2.91 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-05 Maturity Price : 11.01 Evaluated at bid price : 11.01 Bid-YTW : 4.35 % |
| IAG.PR.G | FixedReset | -2.61 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 18.31 Bid-YTW : 7.92 % |
| MFC.PR.I | FixedReset | -2.13 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 19.31 Bid-YTW : 7.24 % |
| HSE.PR.A | FixedReset | -2.00 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-05 Maturity Price : 11.27 Evaluated at bid price : 11.27 Bid-YTW : 5.19 % |
| FTS.PR.M | FixedReset | -1.96 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-05 Maturity Price : 19.00 Evaluated at bid price : 19.00 Bid-YTW : 4.30 % |
| MFC.PR.G | FixedReset | -1.80 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 18.56 Bid-YTW : 7.73 % |
| MFC.PR.K | FixedReset | -1.72 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 16.53 Bid-YTW : 8.88 % |
| MFC.PR.L | FixedReset | -1.66 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 17.20 Bid-YTW : 8.44 % |
| MFC.PR.J | FixedReset | -1.56 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 18.30 Bid-YTW : 7.76 % |
| TRP.PR.D | FixedReset | -1.45 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-05 Maturity Price : 17.00 Evaluated at bid price : 17.00 Bid-YTW : 4.56 % |
| FTS.PR.H | FixedReset | -1.42 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-05 Maturity Price : 13.85 Evaluated at bid price : 13.85 Bid-YTW : 3.84 % |
| NA.PR.S | FixedReset | -1.40 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-05 Maturity Price : 17.60 Evaluated at bid price : 17.60 Bid-YTW : 4.43 % |
| FTS.PR.G | FixedReset | -1.34 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-05 Maturity Price : 16.92 Evaluated at bid price : 16.92 Bid-YTW : 4.22 % |
| BAM.PF.G | FixedReset | -1.22 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-05 Maturity Price : 19.39 Evaluated at bid price : 19.39 Bid-YTW : 4.72 % |
| GWO.PR.M | Deemed-Retractible | -1.20 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2018-03-31 Maturity Price : 25.25 Evaluated at bid price : 25.55 Bid-YTW : 5.11 % |
| TRP.PR.E | FixedReset | -1.20 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-05 Maturity Price : 17.36 Evaluated at bid price : 17.36 Bid-YTW : 4.53 % |
| BAM.PR.T | FixedReset | -1.13 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-05 Maturity Price : 14.90 Evaluated at bid price : 14.90 Bid-YTW : 4.98 % |
| BAM.PF.A | FixedReset | -1.11 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-05 Maturity Price : 18.63 Evaluated at bid price : 18.63 Bid-YTW : 4.84 % |
| BAM.PR.X | FixedReset | -1.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-05 Maturity Price : 13.43 Evaluated at bid price : 13.43 Bid-YTW : 4.61 % |
| NA.PR.W | FixedReset | -1.09 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-05 Maturity Price : 17.21 Evaluated at bid price : 17.21 Bid-YTW : 4.37 % |
| TRP.PR.G | FixedReset | -1.09 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-05 Maturity Price : 18.20 Evaluated at bid price : 18.20 Bid-YTW : 4.99 % |
| MFC.PR.N | FixedReset | -1.05 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 17.95 Bid-YTW : 7.99 % |
| BMO.PR.R | FloatingReset | -1.02 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.40 Bid-YTW : 5.15 % |
| SLF.PR.I | FixedReset | -1.00 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 17.77 Bid-YTW : 8.17 % |
| 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 : 14.16 Bid-YTW : 9.74 % |
| HSE.PR.G | FixedReset | 1.35 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-05 Maturity Price : 19.50 Evaluated at bid price : 19.50 Bid-YTW : 5.42 % |
| BMO.PR.Q | FixedReset | 1.56 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 20.16 Bid-YTW : 5.96 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| BNS.PR.G | FixedReset | 523,184 | YTW SCENARIO Maturity Type : Call Maturity Date : 2021-07-25 Maturity Price : 25.00 Evaluated at bid price : 26.51 Bid-YTW : 4.12 % |
| NA.PR.A | FixedReset | 150,317 | YTW SCENARIO Maturity Type : Call Maturity Date : 2021-08-15 Maturity Price : 25.00 Evaluated at bid price : 25.89 Bid-YTW : 4.71 % |
| RY.PR.M | FixedReset | 83,560 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-05 Maturity Price : 19.35 Evaluated at bid price : 19.35 Bid-YTW : 4.28 % |
| BNS.PR.M | Deemed-Retractible | 80,536 | YTW SCENARIO Maturity Type : Call Maturity Date : 2016-08-26 Maturity Price : 25.00 Evaluated at bid price : 24.98 Bid-YTW : 2.83 % |
| BMO.PR.M | FixedReset | 54,322 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.10 Bid-YTW : 4.32 % |
| TD.PF.C | FixedReset | 48,677 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-05 Maturity Price : 18.29 Evaluated at bid price : 18.29 Bid-YTW : 4.15 % |
| There were 28 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| TRP.PR.H | FloatingReset | Quote: 9.15 – 10.15 Spot Rate : 1.0000 Average : 0.6031 YTW SCENARIO |
| BNS.PR.Y | FixedReset | Quote: 19.60 – 20.00 Spot Rate : 0.4000 Average : 0.2744 YTW SCENARIO |
| FTS.PR.G | FixedReset | Quote: 16.92 – 17.35 Spot Rate : 0.4300 Average : 0.3221 YTW SCENARIO |
| SLF.PR.J | FloatingReset | Quote: 12.54 – 13.10 Spot Rate : 0.5600 Average : 0.4575 YTW SCENARIO |
| GWO.PR.F | Deemed-Retractible | Quote: 25.83 – 26.25 Spot Rate : 0.4200 Average : 0.3252 YTW SCENARIO |
| BMO.PR.R | FloatingReset | Quote: 21.40 – 21.70 Spot Rate : 0.3000 Average : 0.2095 YTW SCENARIO |