insto - Australian financial markets

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.

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.

US stocks ended a strong quarter on a low after manufacturing data disappointed investors.

The S&P500 fell 0.4 per cent after a Chicago ISM report showed a surprising decline in factory orders. US GDP numbers however were positive, as the US economy was shown to have declined by 0.7 per cent, less than the forecast 1.2 per cent.

The S&P500 index has now gained for the seventh straight month and its 15 per cent quarterly gain is the highest in almost a decade.

Australia’s top retailers are not only squaring up to do battle on in the hardware front. Woolworths and Wesfarmers may be due for a face off in the corporate bond market.

US stocks traded higher on Thursday as data showed that the US economy had contracted by less than expected.

The S&P500 gained 0.28 per cent with Citigroup and AIG among the day’s best performers. Citi gained over 8 per cent after news that fund manager John Paulson had taken a 2 per cent stake in the bank while AIG traded 27 per cent higher following upbeat comments from its chief executive.

Major Australian corporations Woolworths and Wesfamers are to update Australian fixed income fund managers in the coming weeks.

The rally in global equity markets paused for breath after America’s banks reported mixed results.

The S&P500 index closed down 0.1 per cent while the NASDAQ index kept going, gaining for the 11th successive sessions as tech stocks took heart from Apple’s strong earnings.

US credit indices closed wider on the back of more bank earnings numbers. The Markit CDX widened 1.5bps to 125 on light volumes. Bonds traded down with 10yr yields up 6bps to 3.54 per cent.

 
The challenges facing the growth of a domestic corporate bond market have not disappeared, despite a few promising signs.

The stars appear to be aligning for the Australian corporate bond market but so far most discussion has been in abstract terms, or in reaction to a few names that have gone early.

The reality is that there are also a number of factors that have historically worked against the domestic bond market and will continue to work against it.

In a departure from the business model that has served Australia’s largest grocer very well since the 1980s, Woolworths seems to be moving into deals that will see the company vertically integrate with some of its boutique suppliers.

Citi rounded up a week of better than expected fixed quarter earnings for US banks on Friday, but further scrutiny of the banking sector, more corporate earnings and key data releases are expected to put pressure on the market’s recovery this week.