insto - Australian financial markets

If there was any doubt that 2009 was the year that the domestic bond market had got its groove back, it was well and truly erased in the third quarter, reports Jonathan Shapiro.

Conditions continued to improve, increasing the confidence of both issuers and investors.

From July to September, over A$30 billion of non-government bonds were printed, making it the busiest period of the year, exceeding Q2 total issuance by A$10 million and more than double the amount issued in the third quarter of 2008.

Shifts in the debt landscape and attitudes of lenders should ensure the debt capital markets get a long run on the catwalk. Jonathan Shapiro casts his eye over the passing parade.
 

With a fair chunk of 2009 still to run, the booming global markets for corporate bonds have categorically smashed all records.

Origin Energy has become the latest Australian corporate to be assigned a first time credit rating from Moody's Investor Services.

The agency has assigned a ‘Baa1’ senior unsecured rating to the integrated energy and gas retail company.

Corporate Australia's balance sheets are now showing virtually no vestige of the credit crunch, but they are by no means home and hosed.

US stocks surged on Monday as M&A activity bounced back to life.

The S&P500 gained 1.8 per cent following three consecutive negative sessions after news of multi-billion takeovers in the biotech and technology sectors boosted sentiment. Financial stocks were among the days top performers, gaining about 3.4 per cent.

US stocks reached new year highs as economic data supported Fed chairman Ben Bernanke's declaration that the recession is likely to be over.

Speaking at a Q&A session, Bernanke said that the recession has ended from a technical point, helping the S&P to gain 0.31 per cent.

US bonds traded lower on the stronger economic data. The 10yr yield increased 3bps to 3.44 per cent as monthly retail sales rose 2.7 per cent, regional manufacturing improved and producer prices rebounded.

Stocks staged a mild comeback on Tuesday after upbeat macro-economic data from the US and Europe boosted sentiment.

US stocks fell on Friday as lower than expected consumer sentiment data disappointed the market.

The S&P500 closed 0.9 per cent lower at 1,005, down 0.6 per cent for the week as Michigan’s Consumer Sentiment declined in July, the second consecutive monthly fall and its lowest reading since March. It marked the S&P500’s first weekly fall in five weeks.

The early part of the week saw A$650 million of corporate bonds issued in three separate deals. While the amount appears modest, it’s a relative landslide given the dearth of corporate bond issuance in recent years.