insto - Australian financial markets

The market capitalisation of the world’s top 30 banks grew by 70 percent over 2009 to US$2.8 trillion, according to a report from the Boston Consulting Group.

BCG’s report, entitled “After the Storm: Creating Value in 2010,” said that while the banking industry staged a remarkable turnaround over 2009, it still faced substantial challenges.

The report says that after bottoming out at US$3.1 trillion in the first quarter of 2008, the market capitalisation of the entire global banking industry more than doubled in ten months to US$6.4 trillion.

Last Thursday, CBA launched its first EUR transaction in 2010 - EUR1bn 4.375pct 10yr senior unsecured EMTN. The deal was also the first 10-year EUR senior trade by a financial institution in 2010.
Pricing:
• With a well oversubscribed orderbook of EUR2.4bn, the transaction was reoffered at Mid-Swap +98bpts, which is at the tight end of whisper guidance of Mid-Swap +105bpts.
• Despite the 7bpts tightening, the orderbook remained sticky losing only EUR100m of orders.
• In the secondary market the bonds tightened a further 4 bpts.
Distribution:
• 152 investors participated.

The numbers for resales of US homes surprised on the upside overnight (23 November US time), increasing by 10.1 per cent in October to a seasonally adjusted annual rate of 6.10 million, the National Association of Realtors estimated. This would make it the highest since February 2007. Commodities, especially gold continued their bull run, pulling up equities markets on both sides of the Atlantic. At the close, the Dow, Nasdaq and S&P 500 were all up by 1.3 to 1.4 per cent.

The global banking industry has recovered half of the market cap lost since the pre-crisis peak of $US9.7 trillion in October 07, reports the Boston Consulting Group. Market cap has doubled in the past seven months from a low of $US3.1 trillion in February 2009 to $US6.2 trillion at the end of September 2009.

One of the oldest arguments in funds management was re-ignited earlier this year when Standard and Poor's released data showing passive index-huggers had clearly out-performed active managers.

The roiling credit and equities markets have been a source of anguish for many super fund members, while the best of the hedge funds have seen opportunity amongst the chaos for quick profits. So how do investors rate such different investment styles and performances?

While many companies are reluctant to admit their potential greenhouse gas costs, the number of institutional investors seeking this information has spiked, repots Bernard Kellerman.

The Carbon Disclosure Project has evolved as the pre-eminent mechanism for communication between companies and investors on climate change and carbon exposure issues. It has been run globally for 7 years, but for the fourth year has been expanded to cover the top 200 Australian and top 50 New Zealand companies.

Robert Dunn, CEO of Opportunity International Australia, takes a business approach to a massive social problem. He spoke to Janette Wajs-Chaczko about delivering financial expertise to 1.8 million of the world’s poorest people.

A succession of billion-dollar-plus Chinese IPOs helped triple the total value of new listings this quarter over the previous period.

Share floats raised the largest amount of new funds for over a year - since Q2 2008, to be precise. The number of IPOs (149) was the highest quarterly total this year but remains well down on historical trends, according to Ernst and Young.

The top 100 enterprises across Asia are starting to flex their considerable – and growing – financial muscle, demanding far better service from their corporate bankers, reports Robert Morgan*

The global banking industry has recovered half of the market cap lost since the pre-crisis peak of $US9.7 trillion in October 07, reports Boston Consulting Group. Market cap has doubled in the past seven months from a low of $US3.1 trillion in February 09 to $US6.2 trillion at the end of September 09.

In other words, the banking sector’s TSR improved by more than 100 percentage points from 2008. (Total shareholder return – or TSR – is the metric preferred by BCG for measuring company performance. In broad terms, TSR consists of capital gains and free-cash-flow yields.) This makes the sector one of the success stories of 2009:

Fig 1: Total shareholder return, 1 Q1–Q3 2009 (%)

Sources: Thomson Reuters Datastream; BCG analysis.
Note: All TSRs were calculated after conversion to US dollars.