Monday 4th May 2015
NEWS TICKER: FRIDAY, MAY IST: MYOB will return on Monday next to the ASX, selling 228.3mshares at $3.65 in the company’s IPO. The company raised AUD833.1m, giving it an implied market capitalisation of AUD2.13bn. Bain Capital will retain 58% of the firm’s stock. “We saw a significant level of participation from eligible retail noteholders in the offer, with approximately 57% of holders exchanging their notes into shares. We see this wide range of investor interest as a strong vote of confidence in MYOB.” MYOB chairman Justin Milne says. ASX trading in MYOB shares is set to begin on 4 May under the code MYO. MYOB was listed on exchange from 1999 to 2009 – The volume of US municipal bonds soared by 42.1% in April, according to Thomson Reuters’ data; the ninth straight monthly gain. Issuers brought $37.76bn to market in 1,210 issues, up from $26.58bn in 939 issues in April 2014. Low interest rates, and the reluctance of the US Federal Reserve to raise rates over the near term has resulted in a dash by municipal issuers anxious to secure low cost funding as many refinance their debts. Other than refinancing, new issuance per se looks to be tailing off. New money transactions declined by 5.6% to $12.68bn from $13.43bn, while combined refunding and new money transactions increased 42.5% to $7.17bn from $5.03bn in April last year. Negotiated bond sales increased 62.4% to $28.97bn from $17.84bn, competitive deals rose 15.4% to $8.62bn from $7.47 billion and private placements plunged 87.2% to $162mn from $1.26bn. Sales of revenue bonds increased 49.9% to $22.84bn in 421 deals from $15.24bn in 306 deals. General obligation bond volume jumped 29.9% to $14.73bn in 788 issues from $11.34bn in 633 issues. Tax-exempt deals were up 42.4% to $33.88bn, while taxable deals were 24% higher to $3.30bn.Fixed-rate issues increased to $36.75bn in 1,167 issues from $24.85bn in 891 issues the previous year. The volume of deals with bond insurance more than doubled in par amount wrapped to $2.54bn in 161 deals from $1.06bn in 104 transactions. California claimed the top spot among states with $21.47bn of issuance thus far in 2015, up from its No. 2 ranking in the same period of last year with $12.03bn. Texas dropped from first to second with $17.85bn, an increase from $12.31bn the year before. New York remained in third place with $11.91bn so far this year, up from $10.29bn year to date - This morning Lloyds Banking Group said that in Q1 it had made a net profit of £913m and underlying profit was up 21% on the same period last year, to £2.2bn. Moreover, the group said that it was raising its net interest income target above the original target of 2.55%. Graham Spooner, investment research analyst at The Share Centre, says: “These results are good news for investors as they are ahead of forecasts and demonstrate a continued improvement in the company’s performance. The part UK government owned bank additionally reported that it has been benefitting from a resurgent British economy which has led to reduced bad loans and fuelled demand for mortgages. Lloyds announced its first dividend in February since being bailed out and investors should acknowledge that the increasing signs of recovery will boost hopes for a significant dividend growth in the near future. Analysts have become a little more positive on the group and its long term restructuring plans, which appear to be happening faster than expectations. However … the sector [remains] under pressure, as a result of regulatory issues and ahead of the next government sale.” - The Straits Times Index (STI) ended 0.24 points or 0.01% higher to 3487.39, taking the year-to-date performance to +3.63%. The top active stocks today were SingTel, which declined 0.23%, OCBC Bank, which declined 1.84%, DBS, which gained 0.19%, UOB, which gained 0.29% and Keppel Corp, with a 1.02% fall. The FTSE ST Mid Cap Index gained 0.47%, while the FTSE ST Small Cap Index rose 0.18%. The outperforming sectors today were represented by the FTSE ST Real Estate Holding and Development Index, which rose 1.00%. The two biggest stocks of the Index - Hongkong Land Holdings and Global Logistic Properties – ended 2.02% higher and 2.23% higher respectively. The underperforming sector was the FTSE ST Consumer Goods Index, which slipped 1.04%. Wilmar International shares remained unchanged and Thai Beverage declined 3.38%.

Revamped accounting rule to gradually affect US banks

Wednesday, 04 January 2012
Revamped accounting rule to gradually affect US banks Fitch Ratings says a new accounting rule change requiring banks to book losses on loans sooner will have a gradual affect on US bank income statements. In theory, the suggested change would give banks more time to replenish capital cushions by setting aside reserves as a result of projected loan losses, insulating investors. However, the ratings agency does not believe the proposed changes will have anymaterial  impact on the ratings of US banks. http://www.ftseglobalmarkets.com/

Fitch Ratings says a new accounting rule change requiring banks to book losses on loans sooner will have a gradual affect on US bank income statements. In theory, the suggested change would give banks more time to replenish capital cushions by setting aside reserves as a result of projected loan losses, insulating investors. However, the ratings agency does not believe the proposed changes will have anymaterial  impact on the ratings of US banks.

The United States’ Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) agreed in late December 2011 on a draft proposal that would supersede banks' incurred loan loss approach with a speedier "expected loss" one. Under the model, banks will be required to book projected losses spanning the next 12 months instead of recording losses after they have actually occurred. A formal proposal is expected in 2012.

Ratings agency Fitch believes that if the rule implemented, it would bring greater clarity to bank financial statements as it is forward looking and recognition of exposure is certainly encouraged. Moreover, says Fitch, while changes in accounting for the financial industry coupled with regulatory reform heighten uncertainty, banks have been aggressive in responding earlier to reform suggestions as they have been afforded ample time to do so.



Meanwhile, the has FASB agreed to keep unchanged balance sheet offsetting rules, effectively preserving the single largest balance sheet difference between financial institutions filing under the IFRS framework and US GAAP. However, new common disclosure rules for both regimes provide the necessary information to make adjustments for comparability.

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