For those readers who wished to subscribe for the soon-to-be-listed ANZ Capital Notes 5 (ASX code: ANZPH but missed out, the fixed interest desk at Bell Potter have a “Plan B” for you. Analyst Damien Potter said the best time to get set is in the early days of trading on the ASX.
He looked at nine hybrid listings from issuers which comprised banks and other financial institutions over the past eighteen months. His analysis of trading data suggested the presence of a temporary window for investors which arose as some investors sold out in the early days of trading. “Typically new ASX-listed debt and hybrid issues take several trading sessions to clear any initial selling pressure.”
While paying transaction costs and a premium to face value was not ideal from an investor’s perspective, selling pressure (supply) kept the price of the hybrid from appreciating much in this period. According to Williamson the price rose an average of 0.2% from the closing price on the first day of trading. However, after the seven trading days he said selling pressure typically dried up “and on average the security price peak is 1.9% above the price at the end of the digestion period.”
The message? Make your decision early. If you are going to act, then act. Sooner is better than later.
Readers interested in ANZ hybrids or hybrids in general can make comparisons using YieldReport’s charts and tables which can be found here.