Analysts divided on market impact of latest APRA liquid assets update
The latest update from the Australian Prudential Regulation Authority (APRA) on its plans around liquid assets regulation has spurred divergent analyst views, although most do not expect the announcement to be a game changer in terms of spread performance for any asset class. APRA sent a letter outlining more detail on the forthcoming committed liquidity facility (CLF) to all authorised deposit-taking institutions (ADIs) on August 8.
Budget update adds to AOFM task, with bigger tenders likely to result
On August 5, the Australian Office of Financial Management (AOFM) announced a further increase of expected net issuance, to approximately A$60 billion (US$53.3 billion) for 2013/14. The announcement follows a release of updated economic and budget figures by the Australian federal government, which disclosed further deterioration to the country's expected budget position.
Australian non-financial corporate capex faces decline
The non-resources sectors of the Australian economy will not compensate for the substantial negative impact on corporate capital expenditure of the end of the mining investment boom, a report from Standard & Poor's (S&P) suggests. However, economists believe rate cuts by the Reserve Bank of Australia (RBA) have begun to produce shoots of improvement in non-mining sectors.
Improved global markets reopens window for FI Kangaroo issuance
Improved investor confidence and lower market volatility saw two new deals from financial institution (FI) Kangaroo borrowers – Royal Bank of Canada (RBC) and Goldman Sachs – come to the market on July 30. But, leads say, the reopening of the market is not likely to be followed by an immediate flurry of issuance.
Westpac NZ's market return suggests improving market tone
Westpac New Zealand (Westpac) (AA-/Aa3/AA-) reopened the New Zealand domestic market on July 9, ending a month-long hiatus in new public issuance. With final interest topping NZ$500 million, Westpac was able to upsize the three-year floating rate note (FRN) to a final NZ$385 million (US$300.4 million) from an initial NZ$200 million minimum size.