{"id":9738,"date":"2010-02-17T20:35:06","date_gmt":"2010-02-18T00:35:06","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=9738"},"modified":"2010-02-17T20:35:06","modified_gmt":"2010-02-18T00:35:06","slug":"february-17-2010","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=9738","title":{"rendered":"February 17, 2010"},"content":{"rendered":"

Assiduous Readers will remember that I am rather curious about the social benefits of increasing bank capital. It is all very well to say that more capital is good, but in a world of limited resources, socking away huge amounts of capital and taking it away from productive investment elsewhere is going to have costs as well as benefits. I haven’t seen any econometric analysis of those costs, but JP Morgan is starting the conversation<\/a>:<\/p>\n

Top banks will need an extra $221 billion (139.6 billion pounds) of capital and see annual profits slump by $110 billion if all proposed regulations to reform the industry are brought in, leading analysts said on Wednesday.
\nIf all the initiatives from regulators are implemented it would cut the average return on equity to 5.4 percent from 13.3 percent next year, hurt economic growth and raise costs for bank services, JPMorgan analysts warned.<\/p>\n

“The cumulative impact of all the proposed regulation suggests that there is a real risk that we may move from a system that was under regulated to one that is over regulated and that that could cause a significant increase in lending costs and a negative impact on the economy,” Nick O’Donohue, head of research at JPMorgan, said in a research note.<\/p><\/blockquote>\n

KPMG has issued a TaxNewsFlash titled CRA Narrows GST-Exempt Financial Services<\/a>; one of the items is:<\/p>\n

Investment dealers\u2019 trailer fees<\/b>
\nIn this example, an investment dealer who arranges to purchase units of a mutual fund for an investor receives a \u201ctrailer commission or fee\u201d from the fund manager. The prospectus describes these fees as being paid in recognition of investment advice and ongoing administrative services provided by the dealer to the investors.<\/p>\n

In this situation, the CRA says the services provided by the investment dealer including advice, arranging for the purchase of the units and ongoing administrative services are GST-taxable.<\/p><\/blockquote>\n

Volume picked up again today, but prices were off by a hair, with both PerpetualDiscounts and FixedResets losing 2bp on the day. The day was enlivened by the announcement of a new IAG 5.90% Straight<\/a> after the close.<\/p>\n

PerpetualDiscounts now yield 5.85%, equivalent to 8.19% at the standard equivalency factor of 1.4x. Long Corporates<\/a> have eased of to a yield of about 5.9% so the pre-tax interest equivalent spread (also called the Seniority Spread) is now about 230bp, coming in a bit from the 240bp reported February 10<\/a>.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
HIMIPref™ Preferred Indices
These values reflect the December 2008 revision of the HIMIPref™ Indices<\/strong>
Values are provisional and are finalized monthly<\/td>\n<\/tr>\n
Index<\/td>\nMean
Current
Yield
(at bid)<\/td>\n		Median
YTW<\/td>\n		Median
Average
Trading
Value<\/td>\n		Median
Mod Dur
(YTW)<\/td>\n		Issues<\/td>\nDay’s Perf.<\/td>\nIndex Value<\/td>\n<\/tr>\n
Ratchet<\/td>\n2.98 %<\/td>\n3.59 %<\/td>\n28,592<\/td>\n20.29<\/td>\n1<\/td>\n1.0638 %<\/td>\n1,854.7<\/td>\n<\/tr>\n
FixedFloater<\/td>\n5.71 %<\/td>\n3.78 %<\/td>\n38,454<\/td>\n19.23<\/td>\n1<\/td>\n0.0000 %<\/td>\n2,769.5<\/td>\n<\/tr>\n
Floater<\/td>\n1.99 %<\/td>\n1.72 %<\/td>\n46,787<\/td>\n23.23<\/td>\n4<\/td>\n0.8537 %<\/td>\n2,310.3<\/td>\n<\/tr>\n
OpRet<\/td>\n4.83 %<\/td>\n-1.63 %<\/td>\n106,142<\/td>\n0.09<\/td>\n13<\/td>\n0.0737 %<\/td>\n2,326.9<\/td>\n<\/tr>\n
SplitShare<\/td>\n6.29 %<\/td>\n-2.17 %<\/td>\n131,713<\/td>\n0.08<\/td>\n2<\/td>\n0.0000 %<\/td>\n2,134.3<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.0737 %<\/td>\n2,127.7<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.75 %<\/td>\n5.33 %<\/td>\n85,383<\/td>\n1.98<\/td>\n7<\/td>\n0.2999 %<\/td>\n1,902.7<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n5.82 %<\/td>\n5.85 %<\/td>\n167,909<\/td>\n14.10<\/td>\n69<\/td>\n-0.0241 %<\/td>\n1,811.0<\/td>\n<\/tr>\n
FixedReset<\/td>\n5.41 %<\/td>\n3.57 %<\/td>\n305,994<\/td>\n3.76<\/td>\n42<\/td>\n-0.0218 %<\/td>\n2,187.0<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n
Performance Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nChange<\/td>\nNotes<\/td>\n<\/tr>\n
ELF.PR.G<\/td>\nPerpetual-Discount<\/td>\n-1.44 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2040-02-17
\nMaturity Price : 17.82
\nEvaluated at bid price : 17.82
\nBid-YTW : 6.77 %<\/td>\n<\/tr>\n
POW.PR.D<\/td>\nPerpetual-Discount<\/td>\n-1.04 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2040-02-17
\nMaturity Price : 20.92
\nEvaluated at bid price : 20.92
\nBid-YTW : 6.06 %<\/td>\n<\/tr>\n
BAM.PR.E<\/td>\nRatchet<\/td>\n1.06 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2040-02-17
\nMaturity Price : 25.00
\nEvaluated at bid price : 19.00
\nBid-YTW : 3.59 %<\/td>\n<\/tr>\n
RY.PR.H<\/td>\nPerpetual-Premium<\/td>\n1.34 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2040-02-17
\nMaturity Price : 24.65
\nEvaluated at bid price : 24.88
\nBid-YTW : 5.70 %<\/td>\n<\/tr>\n
TRI.PR.B<\/td>\nFloater<\/td>\n1.35 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2040-02-17
\nMaturity Price : 22.28
\nEvaluated at bid price : 22.55
\nBid-YTW : 1.72 %<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n\n\n
Volume Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nShares
Traded<\/td>\n		Notes<\/td>\n<\/tr>\n
MFC.PR.D<\/td>\nFixedReset<\/td>\n113,474<\/td>\nDesjardins crossed 100,000 at 28.19.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-07-19
\nMaturity Price : 25.00
\nEvaluated at bid price : 28.16
\nBid-YTW : 3.79 %<\/td>\n<\/tr>\n
PWF.PR.M<\/td>\nFixedReset<\/td>\n105,385<\/td>\nNational crossed 100,000 at 27.30.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-03-02
\nMaturity Price : 25.00
\nEvaluated at bid price : 27.28
\nBid-YTW : 3.62 %<\/td>\n<\/tr>\n
TRP.PR.A<\/td>\nFixedReset<\/td>\n100,435<\/td>\nNational crossed blocks of 25,000 and 15,000, both at 26.09. RBC crossed 25,000 at the same price.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2015-01-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.04
\nBid-YTW : 3.81 %<\/td>\n<\/tr>\n
TD.PR.M<\/td>\nOpRet<\/td>\n100,341<\/td>\nRBC crossed 98,000 at 26.24.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2010-03-19
\nMaturity Price : 26.00
\nEvaluated at bid price : 26.23
\nBid-YTW : -3.78 %<\/td>\n<\/tr>\n
TD.PR.N<\/td>\nOpRet<\/td>\n92,000<\/td>\nRBC crossed 90,000 at 26.21.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2010-03-19
\nMaturity Price : 26.00
\nEvaluated at bid price : 26.18
\nBid-YTW : -1.63 %<\/td>\n<\/tr>\n
TD.PR.I<\/td>\nFixedReset<\/td>\n71,600<\/td>\nTD crossed 25,000 at 27.85. National crossed 25,000 at 27.90.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-08-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 27.82
\nBid-YTW : 3.64 %<\/td>\n<\/tr>\n
There were 44 other index-included issues trading in excess of 10,000 shares.<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

Assiduous Readers will remember that I am rather curious about the social benefits of increasing bank capital. It is all very well to say that more capital is good, but in a world of limited …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[],"class_list":["post-9738","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/9738","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9738"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/9738\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9738"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9738"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9738"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}