Summary: Trading margins decline again on average; falls outweigh rises by 2:1; sector trading margin hits new series low, well below lower bound of “normal” trading range; margins of CBAPD, CGFPB, IAGPD largest movers over week.
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The median trading margin of ASX-listed declined again as the number of securities with lower spreads to BBSW outnumbered securities with higher spreads by a ratio of about 2:1. By the end of the week, the median trading margin had declined from 2.41% to 2.30%, a new series low and well below the lower bound of its “normal” ten-year trading range.
Trading margins of most hybrids varied within a range of -23bps to +10bps. Ignoring short-dated securities, the margins of Commonwealth Bank PERLS 7 (code: CBAPD, -47bps), Challenger Capital Notes 2 (code: CGFPB, -32bps) and Insurance Australia Capital Notes (code: IAGPD, +33bps) had the largest (absolute) change over the week.
The current 3-month BBSW rate is just 4bps above zero. Add the trading margin from the above chart or from the tables to this figure for an estimate of the gross return per annum in the absence of BBSW rate changes. The gross return may contain imputation credits. BBSW typically is around 15bps (average since 1990) more than the RBA rate.
ASX-LISTED HYBRIDS (STANDARD)
| COMPANY | CODE | HYBRID TYPE | MATURITY/ CALL DATE | MARGIN INCL. CREDITS | TRADING MARGIN | WEEK CHANGE | WEEK CLOSE | RUNNING YIELD** |
|---|---|---|---|---|---|---|---|---|
| Westpac | WBCPG | Capital Notes 4 | 20-Dec-21 | 4.90% | 2.17% | 0.02% | 100.48 | 4.92% |
| AMP Group | AMPPA | Capital Notes | 22-Dec-21 | 5.10% | 8.78% | 2.37% | 99.84 | 5.17% |
| CBA | CBAPF | PERLS 9 | 20-Feb-22 | 3.90% | 1.55% | 0.17% | 101.45 | 3.90% |
| ANZ Banking Group | ANZPE | Capital Notes 2 | 24-Mar-22 | 3.25% | 0.60% | -0.96% | 101.40 | 3.31% |
| Suncorp | SUNPF | Capital Notes | 17-Jun-22 | 4.10% | 1.58% | 0.13% | 102.06 | 4.07% |
| Nat. Aust. Bank | NABPD | Capital Notes 2 | 7-Jul-22 | 4.95% | 1.46% | 0.24% | 102.70 | 4.87% |
| Westpac | WBCPE | Capital Notes 2 | 23-Sep-22 | 3.05% | 1.24% | -0.14% | 101.92 | 3.04% |
| CBA | CBAPD | PERLS 7 | 15-Dec-22 | 2.80% | 1.48% | -0.47% | 101.80 | 2.80% |
| ANZ | ANZPF | Capital Notes 3 | 24-Mar-23 | 3.60% | 1.58% | -0.16% | 103.16 | 3.60% |
| Challenger | CGFPB | Capital Notes 2 | 22-May-23 | 4.40% | 2.80% | -0.32% | 103.20 | 4.33% |
| Insurance Australia | IAGPD | Capital Notes | 15-Jun-23 | 4.70% | 2.21% | 0.33% | 104.50 | 4.56% |
| ANZ | ANZPG | Capital Notes 4 | 20-Mar-24 | 4.70% | 1.76% | -0.04% | 107.21 | 4.44% |
| CBA | CBAPH | PERLS 11 | 26-Apr-24 | 3.70% | 1.74% | -0.22% | 105.10 | 3.57% |
| Bendigo Bank | BENPG | CPS 4 | 13-Jun-24 | 3.75% | 2.23% | -0.11% | 104.23 | 3.65% |
| Suncorp | SUNPG | Capital Notes 2 | 17-Jun-24 | 3.65% | 2.33% | -0.05% | 103.69 | 3.57% |
| Westpac | WBCPI | Capital Notes 6 | 30-Jul-24 | 3.70% | 1.90% | -0.10% | 105.11 | 3.57% |
| Bank of Qld | BOQPE | Capital Notes | 15-Aug-24 | 3.75% | 2.23% | -0.18% | 104.75 | 3.64% |
| Macquarie Group | MQGPC | Capital Notes 3 | 16-Dec-24 | 4.00% | 2.29% | -0.03% | 105.40 | 3.85% |
| ANZ | ANZPH | Capital Notes 5 | 20-Mar-25 | 3.80% | 1.92% | -0.12% | 106.34 | 3.62% |
| CBA | CBAPG | PERLS 10 | 15-Apr-25 | 3.40% | 2.04% | -0.13% | 104.80 | 3.29% |
| Westpac | WBCPH | Capital Notes 5 | 22-Sep-25 | 3.20% | 2.15% | -0.11% | 104.09 | 3.12% |
| AMP Group | AMPPB | Capital Notes 2 | 16-Dec-25 | 4.50% | 5.09% | 0.12% | 98.60 | 4.63% |
| Macquarie Bank | MBLPC | Capital Notes 2 | 22-Dec-25 | 4.70% | 2.41% | -0.11% | 108.94 | 4.37% |
| Challenger | CGFPC | Capital Notes 3 | 25-May-26 | 4.60% | 3.38% | -0.19% | 105.70 | 4.42% |
| Nat. Aust. Bank | NABPF | Capital Notes 3 | 17-Jun-26 | 4.00% | 2.19% | -0.13% | 107.99 | 3.76% |
| Suncorp | SUNPH | Capital Notes 3 | 17-Jun-26 | 3.00% | 2.61% | 0.01% | 102.00 | 2.99% |
| Macquarie Group | MQGPD | Capital Notes 4 | 10-Sep-26 | 4.15% | 2.66% | -0.05% | 106.88 | 3.94% |
| CBA | CBAPJ | PERLS 13 | 20-Oct-26 | 2.75% | 2.34% | -0.12% | 102.17 | 2.74% |
| Latitude | LFSPA | Capital Notes | 27-Oct-26 | 4.75% | 5.04% | 0.29% | 99.53 | 4.83% |
| Westpac | WBCPJ | Capital Notes 7 | 22-Mar-27 | 3.40% | 2.35% | -0.10% | 105.39 | 3.27% |
| CBA | CBAPI | PERLS 12 | 20-Apr-27 | 3.00% | 2.30% | -0.24% | 103.80 | 2.94% |
| Bank of Qld | BOQPF | Capital Notes 2 | 14-May-27 | 3.80% | 3.01% | 0.21% | 104.55 | 3.70% |
| Bendigo Bank | BENPH | Capital Notes | 15-Jun-27 | 3.80% | 2.82% | 0.13% | 105.26 | 3.66% |
| Macquarie Group | MQGPE | Capital Notes 5 | 20-Sep-27 | 2.90% | 2.68% | -0.16% | 101.46 | 2.90% |
| Nat. Aust. Bank | NABPH | Capital Notes 5 | 17-Dec-27 | 3.50% | 2.55% | -0.07% | 105.47 | 3.37% |
| ANZ | ANZPI | Capital Notes 6 | 20-Mar-28 | 3.00% | 2.61% | 0.05% | 102.45 | 2.97% |
| Suncorp | SUNPI | Capital Notes 4 | 17-Jun-28 | 2.90% | 2.95% | 0.05% | 100.15 | 2.94% |
| Macquarie Bank | MBLPD | Capital Notes 3 | 7-Dec-28 | 2.90% | 2.75% | -0.06% | 101.39 | 2.91% |
| Westpac | WBCPK | Capital Notes 8 | 21-Sep-29 | 2.90% | 2.68% | -0.05% | 101.90 | 2.89% |
| COMPANY | CODE | HYBRID TYPE | MATURITY/ CALL DATE | MARGIN INCL. CREDITS | TRADING MARGIN | WEEK CHANGE | WEEK CLOSE | RUNNING YIELD** |
|---|---|---|---|---|---|---|---|---|
| Bendigo Bank | BENHB | Perpetual | 21-Oct-54 | 1.00% | 1.01% | 0.00% | 99.70 | 1.05% |
| Challenger | CGFPA | Capital Notes | 25-May-22 | 3.40% | 3.43% | -0.01% | 100.49 | 3.44% |
| Crown | CWNHB | Sub Notes 2 | 23-Apr-75 | 4.00% | 4.91% | -0.07% | 87.50 | 4.64% |
| Nufarm | NFNG | Step Up | Perpetual | 3.90% | 4.46% | -0.03% | 89.00 | 4.50% |
| Ramsay Health Care | RHCPA | Perpetual PS | Perpetual | 4.85% | 4.74% | 0.03% | 103.50 | 4.78% |
| Suncorp-Metway | SBKHB | Income Securities | Perpetual | 0.75% | 0.75% | 0.00% | 99.73 | 0.79% |
** “Clean” running yield. Includes franking credits if present.