WA’s iron ore port plans come unstuck. What is a hybrid? Our guide to the jargon. Major companies are raising billions of dollars through hybrid issues, which come with a whole new language to learn in order to understand them.
Although notes (Woolworths offer) or convertible preference shares (ANZ CPS3 issue) bear some characteristics of equity and convert to shares after a few years, they still mostly count as bonds, which are different animals. Nothing beats reading the prospectus to find out about a hybrid issue you’re interested in, although most retail investors rarely do more than glance at the investment overview. But there are many terms puzzling to those who are used to shares. Below we provide an explanation to some of them: Unsecured Corporate bond issues feature a range of terms referring to the security offered, should the company hit the wall.
Ratings agencies may back out of Australia. S&P rethink on hybrids after rush of raisings. Jonathan Shapiro and Shaun Drummond Credit ratings agency Standard & Poor’s is reconsidering how it assigns “equity credit” to hybrid securities following a rush of corporate raisings that exploited a loophole to raise cheap funds.
The change could dampen the enthusiasm of corporate treasurers to issue hybrid capital. Companies that have previously issued the part-debt, part-equity securities could be hit as S&P retrospectively reduces their level of equity when calculating their debt. S&P to shift hybrid goal-posts. Origin’s blip exposes regulatory flaws. Origin left out in utility equities rush. Trader bets on BoQ hybrid payoff. Bank property finance faces squeeze: Kelly. Positive signs in Qld property market: banker. ++ Banks fend off bad debt fears. Big four banks slash 6600 jobs in year. ++ Big four increase commercial shares. RBA wary of US ‘fiscal cliff’ RBA slow to act: John Symond. Mark Bouris declares war on big four. China’s economy gathers momentum. Calls to ensure Budget Office has resources.
Obama’s perfect chance to reset his presidency. Wall St votes as Obama faces ‘fiscal cliff’ President Barack Obama, first lady Michelle Obama and their daughters Sasha and Malia, walk from Marine One to board Air Force One at Chicago O’Hare International Airport in Chicago, the day after the presidential election.
Photo: AP Ben Potter Chicago, Illinois House Speaker John Boehner. Photo: AFP A day after Americans voted to re-elect President Barack Obama with a divided Congress and a narrow popular majority, investors cast their vote. The result: 2.4 per cent wiped off the stockmarket savings of Americans in the biggest sell-off since June. Wall Street picks the winner. Hurricane Sandy Fallout: Superstorm Shuts Down New York’s Entertainment Industry. With millions of Northeast residents assessing the damage from Hurricane Sandy on Tuesday, New York’s entertainment industry is counting itself among the casualties.
The storm has shut down much of the industry, affecting not just stir-crazy entertainment seekers but also the city’s 130,000 workers employed by the industry. And with Mayor Bloomberg estimating that subway service may not be restored for another four to five days, options on both sides are going to be undeniably slim. All 40 Broadway theaters remain closed through Tuesday, according to a statement released by Charlotte St. Martin, executive director of the Broadway League.
The trade organization said it expects shows to reopen on Wednesday. The picture is very much the same for cinema, with AMC reporting that all of its movie theaters in the area are closed until at least Wednesday. Aon Benfield: Reinsurance capacity at all-time high. Published Jul 16, 2012 at 8:05 am (Updated Jul 16, 2012 at 8:04 am) Capacity in the reinsurance market, measured by capital, has reached an all-time high of $470 billion at the end of the first quarter of this year, meaning supply continues to outstrip demand globally.
According to Aon Benfield’s latest reinsurance market outlook report, which covers the state of the global reinsurance sector at midyear, the recent injection of capital into the market has helped to keep pressure on rates. More Catastrophe Bonds Issued in First Half of 2012 Than Any Year Since 2007. In the first half of 2012, there have been about $3.6 billion of catastrophe bonds issued — the most since the record-breaking volume issued in the first half of 2007, according to reinsurer Swiss Re.
The first half of 2011, by contrast, only saw half as much action, with just $1.8 billion issued in cat bonds. For perspective, 2012 beat that number in just the second quarter, which had $2.1 billion in volume, the second-highest Q2 total on record for an insurance-linked securities (ILS) market that Swiss Re believes will only continue to grow. “We remain optimistic regarding new issuance for 2012,” writes Swiss Re in its insurance-linked securities market update. “It remains clear that sponsors view the ILS market as an important part of their risk management programs, and as a source of multi-year collateralized reinsurance protection. Health cuts prompt states to protest. Here’s to your health insurance. Deep breath . . . the prospect is that Australia’s health system will become stretched too thin.
Photo: Michel OSullivan Rohan Mead Largely hidden by the glare of attention on whether the recent Mid-Year Economic and Fiscal Outlook has Australia on track for a surplus in 2012-13 was more evidence of a deeper, long-term truth – Australia’s rising healthcare costs are unsustainable. The government’s MYEFO announcement that it would index the private health insurance rebate to inflation came with an explicit acknowledgment that the health costs problem is with us now and cannot be avoided.
The government’s proposal, which will reduce its exposure to this particular burden by capping its share of the premiums to a general inflation rate, makes sense in the light of its medium-term fiscal challenges. Harvey Norman first quarter profit tumbles 20pc. Mattel plans makeover for Barbie TOYMAKER Mattel has a problem: Barbie's performance has not been very pretty of late, as kids turn toward gadgets and video games.
Online GST reprieve for local retailers. Federal Finance Minister Penny says said a Labor government would not raise GST because it was a “values issue” owing to its regressive nature.
Pip Freebairn and Michaela Whitbourn The federal government’s GST review is expected to recommend expanding the GST net to catch $4.2 billion in online sales, in a bid to shore up collapsing federal tax revenues. States push for tax revenue for asset sales. States push for retail victory. Harvey Norman first-quarter profit falls to $50.1m. RBA shocks economists with sensible rates decision. Christopher Joye Fortunately for those keen to keep the nation’s cost of living low, which includes all savers, Reserve Bank of Australia governor Glenn Stevens did the right thing on Tuesday by announcing the bank had decided against cutting its target cash rate to record lows.
The cash rate will stay at 3.25 per cent in November, down 1.5 percentage points from a year ago. “Interest rates for borrowers have declined to be clearly below their medium-term averages and savers are facing increased incentives to look for assets with higher returns,” Mr Stevens commented. He said “the stance of monetary policy remained appropriate for the time being” given recent inflation data was “slightly higher than expected” and the global outlook “slightly more positive”. Upgrade to shares, RBA tells savers. Reserve Bank governor Glenn Stevens said past rate cuts were “starting to have some of the expected benefits”. Photo: Andrew Meares Jacob Greber and Philip Baker The Reserve Bank of Australia has signalled that interest rates are so low investors should shun low-earning term deposits in favour of riskier assets such as new housing and shares.
The central bank’s board left the official cash rate at 3.25 per cent yesterday and suggested there were signs the equivalent of six interest rate cuts over the past year were starting to revive the economy. While retailers, builders and industry groups bemoaned the decision, the Reserve Bank made it clear it sees monetary policy as loose enough to prompt borrowers into taking on more risk. Narev must work hard for his money. RBA holds fire on rates. Reserve Bank governor Glenn Stevens said past rate cuts were “starting to have some of the expected benefits”.
Photo: Andrew Meares Jacob Greber and Philip Baker The Reserve Bank of Australia has signalled that interest rates are so low investors should shun low-earning term deposits in favour of riskier assets such as new housing and shares. The central bank’s board left the official cash rate at 3.25 per cent yesterday and suggested there were signs the equivalent of six interest rate cuts over the past year were starting to revive the economy.
While retailers, builders and industry groups bemoaned the decision, the Reserve Bank made it clear it sees monetary policy as loose enough to prompt borrowers into taking on more risk. Reserve Bank governor Glenn Stevens said past rate cuts were “starting to have some of the expected benefits”, including a stronger housing market and higher stock prices. News Corp to update on demerger by year-end. iPad mini: more mini than you may think (continued) A closeup of the iPad mini’s screen, left, versus the 4th generation iPad. Source: www.repairlabs.com John DAVIDSON The display on Apple’s new iPad mini isn’t as chunky as its critics might fear. Sky smartpen is smokin’
John DAVIDSON Sometimes a cigar is just a cigar.