Summary: Trading margins on average reverse course, move higher; rises outweigh falls by 3:1; sector trading margin still below lower bound of “normal” trading range; margins of WBCPE, IAGPD largest movers over week.
Click here for the latest daily trading margins, running yields and charts.
The median trading margin of ASX-listed reversed its course of the past two weeks and moved higher as the number of securities with higher spreads to BBSW outweighed securities with lower spreads by a ratio of 3:1. By the end of the week, the median trading margin had increased from 2.42% to 2.53%, a reading which is still below the lower bound of its “normal” ten-year trading range.
Trading margins of most hybrids varied within a range of -17bps to +24bps. Ignoring short-dated securities, the margins of Westpac Capital Notes 2 (code: WBCPE, +43bps) and Insurance Australia Capital Notes (code: IAGPD, +31bps) had the largest (absolute) changes over the week.
ANZ will redeem its Capital Notes (code: ANZPD) for $100 on 1 September 1. Registered holders on 24 August will receive the final distribution of $0.3655.
The current 3-month BBSW rate is just a couple of basis points 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.
[table “6101” not found /]
[table “6102” not found /]