Date: Monday, 21th September 2015
Source: ANZ, 16 September 2015
Since the GFC, the infrastructure debt market in Australia has been overwhelmingly led by the big four banks raising capital from China and Japan. At present, US debt capital market is getting more involved in it, with its longer term debts. However, they may not be for all borrowers given their unfamiliarity to many corporates, currency swap issues and relatively high transaction costs. Although numerous bankers believed it is necessary, they will have some impediments, including pricing, investment from superannuation founds and investors, and refinancing risks.
Source: Macquarie Group, 17 September 2015
High yield credit tends to behave similarly to equities, especially in down markets. Since high yield index ETF and equities have diverged, analysts are wondering whether there would be a recoupling occur. Given the current health of corporate balance sheets, high yield could start becoming attractive again. After the devaluating of RMB, economists have more concerns, including underlying Chinese growth, driver of further EM weakness and a possible restart of currency war.
Source: CNBC, 21 September 2015
Asian stocks outside China declined on Monday, tracking an uninspiring lead from Wall Street, after the Fed’s decision. After a combination of PBOC and Fed moves, the public are closing out their risk positions. China’s Shanghai Composite index gained 0.6% near mid-day, after opening down more than 1% at the open. However, Australia’s S&P ASX 200 index plummeted to its lowest level (down 2.6%) in nearly a week amid a broad-based slump.
Source: NAB, 15 September 2015
While confidence has been beaten up somewhat of late from financial market volatility, the reality on the ground is the Australian economy has continued to improve. In a business survey, the headline growth of non-mining sectors in the national accounts has masked recent improvements in non-mining domestic demand. Since the labor force report is better than expected, analysts believed that the more labor intensive sectors of the economy (mostly non-mining services) are picking up. Markets will be repositioning after the FOMC announcement on Friday morning.
Other Financial Services Working Group Members’ market updates:
Australian Markets Weekly by National Australia Bank
Australian Economic Perspective by Commonwealth Bank
Australian Economic Reports by Westpac Banking Corporation
ANZ Bluenotes by ANZ Bank
Market Insights by Macquarie Group
This brief summarises a range of publicly available news articles in both Chinese and English and AustCham takes no responsibility for the accuracy of the information in these articles. In addition, the views and opinions reflected in these articles are not necessarily representative of AustCham.
AustCham Beijing’s Financial Services Working Group is chaired by Zhongmin Zha (Westpac Banking Corporation). For more details on how to get involved in the AustCham Beijing Financial Services Working Group, please contact Andrew Britz.
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