Despite a 17 per cent drawdown in the wake of the GFC, Andrew McAuley the CIO at Credit Suisse, says it took just 12 months to for their portfolios to bounce back. Not bad if you consider US equities took six years to regain prior highs and in Australia the... Show More
Key Points - Banks have dramatically improved their capital positions in two main ways – firstly by lending more prudently, and secondly by increasing issuance of securities that create an additional line of defence for bondholders and depositors. - Australian banks are some of the few in the world that offer hybrid... Show More
Today I explain why ANZ was nuts not to fully cut its lending rates in May; why it will be even harder for all banks to pass along the next RBA cut, which could come in July or August; why the cash-flow impact of rate cuts could actually be negative;... Show More
We have a special episode of the Complexity Premia podcast out today on the Game of Thrones-style battle between Presidents Trump and Xi over trade, which is intensifying by the day. This is arguably the first true super-power clash that we have seen since the Cold War. We also discuss... Show More
The latest episode of Coolabah Capital’s Complexity Premia markets/investing podcast is now live over at Apple here or at Podbean here.In the latest episode we discuss: recent developments in financial markets; the consequences of Scott Morrison’s (unsurprising) election victory for investors; the most attractive parts of the corporate capital structure;... Show More
In my column today I reveal that there are some tentative signs that the Aussie housing market may be already turning with a recovery assured by: an RBA rate cut in June; APRA's decision to slash the minimum interest serviceability rate from circa 7.25% to 6.0%, which we estimate will... Show More
As very active capital structure investors, we are constantly engaged in repricing the absolute and relative valuation levels spanning preferred equity, subordinated (or Tier 2) debt, non-preferred senior (or Tier 3) instruments, senior unsecured bonds, cash deposits, super senior covered bonds, and off-balance-sheet asset-backed securities (ABS and RMBS). It sounds... Show More
Investor risk-on behaviour that was clearly on display in the first quarter 2019 continued in April. Risk assets performed strongly across the board, particularly in AUD terms. Weaker AUD boosted returns for investors with offshore unhedged investments. Many risk assets have now recovered the losses incurred during the fourth quarter... Show More
For the last decade central banks have done their best to punish savers by cutting interest rates to record lows and buying up government bonds. This has pushed yields down and starved many investors of a traditional source of steady income. On a positive note, Australia has managed to ride... Show More
Today I write that if the RBA cuts the cash rate by 50bps or more, the housing bust will be over very quickly. We were by far the most accurate house price forecasters between 2012 and 2017 and the first mainstream analysts to call the end of the boom and... Show More