insto - Australian financial markets

The collapse of one-time investment bank darling Babcock & Brown was back in the spotlight last week with former executives facing questions in the Federal Court. Liquidator Deloitte is looking to find out if directors breached their duty to shareholders before the company’s collapse with debts of $3 billion. At its high point, B&B was valued at $10 billion. The hearing saw former chief executive Phil Green and CFO and CEO Michael Larkin questioned over dividend payments, and whether they had been unlawfully paid.

Australian M&A volumes are down 41 percent for the first half of 2010, according to Dealogic, while global volumes rose 7 percent. In the thin local market, Macquarie Group is ranked number one for M&A among investment banks, thanks to the Telstra/NBN deal, a deal which also helped UBS and Goldman Sachs improve their rankings. Bank of America Merrill Lynch was number one until the NBN deal was announced.

Retail sales rose a modest 0.2 percent and building approvals fell 6.6 percent in May, the ABS said. Economists said the RBA’s six interest rises were to blame. The seasonally-adjusted Australian Industry Group-PricewaterhouseCoopers Australian performance of manufacturing index dropped 3.4 points to 52.9 in June, just above the 50 point level indicating an expansion. The fall was caused by a drop in new orders.

Hamilton City Council issues NZ$25m FRN

The bond pays the three-month BKBM + 0.85 percent

After a data drought, some significant indicators are due this week. May private credit is due Wednesday.  The median market expectation is for a 0.4 percent increase, in a range of 0.1 percent to 0.5 percent. Economists say business credit is stabilising, but housing credit growth is expected to be weak, reflecting Reserve Bank tightening. May retail sales data are due on Thursday, following months of very weak data, which has surprised economists given the strong employment picture.