GOVERNMENT SECURITIES – AUSTRALIA

Investors calm as government debt nears $1trn

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Original article by Cecile Lefort
The Australian Financial Review – Page: 25 : 3-Sep-25

Official data shows that the federal government’s debt currently stands at $961bn, while its monthly interest bill is about $2bn. Meanwhile, gross debt has risen from just five per cent of GDP to 37 per cent in the last 15 years, although this compares favourably with the US (124 per cent) and Japan (216 per cent). Robert Thompson from RBC Capital Markets expects federal government debt to top $1bn in early 2026. However, Oliver Levingston from Bank of America says Australia has low debt and low deficits compared with the majority of advanced countries. He adds that Australian government bond yields are highly attractive at present.

CORPORATES
RBC CAPITAL MARKETS, BANK OF AMERICA CORPORATION

ANZ had early warning of probe

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Original article by David Ross
The Australian – Page: 13 & 19 : 27-Nov-24

The ANZ Bank is continuing to attract scrutiny over its role in a $14 billion government bond placement in April 2023. The bank formally informed shareholders in mid-May 2024 that it is being investigated by the Australian Securities & Investments Commission with regard to the bond placement. ASIC had served ANZ with a formal notice of investigation in February, but sources have indicated that the bank’s senior management had been aware of the regulator’s interest in the bond deal in August 2023, when it requested access to documents concerning ANZ’s role in the transaction.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Longo suspects ANZ broke law

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Original article by Ronald Mizen, Jonathan Shapiro
The Australian Financial Review – Page: 1 & 6 : 24-Jul-24

Australian Securities & Investments Commission chairman Joe Longo has responded to claims by ANZ CEO Shayne Elliott regarding the bank’s government bond scandal. Elliott said ANZ does not believe that there was any wrongdoing on its part, and ASIC has simply asked it to "please explain" some "unusual activity" in the bond market in April 2023. However, Longo says it is on the public record that ASIC is investigating the bond trades, adding that this means by definition that the corporate regulator suspects a breach of the law. Longo has also advised that ASIC has established a dedicated insider trading team.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

ASIC warned over ANZ-AOFM probe

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Original article by David Ross
The Australian – Page: 15 & 19 : 23-Jul-24

The Australian Securities & Investments Commission is investigating allegations that ANZ traders manipulated a $14 billion placement of federal government securities in April 2023. ANZ only informed investors in May that it was facing an investigation by ASIC, but documents obtained under a Freedom of Information request show that the Australian Office of Financial Management shared over 20 documents concerning the ANZ with ASIC between Jaunary and May; one of the documents reveals that ASIC demanded information about past risk manager reports on 29 January.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA. DEPT OF THE TREASURY. OFFICE OF FINANCIAL MANAGEMENT

Fed takes a keen interest in RBA’s bond buying

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Original article by Sarah Turner
The Australian Financial Review – Page: 27 : 18-Jun-20

The yield on three-year Australian government bonds has traded within a narrow range of 0.21 per cent to 0.28 per cent since March, when the Reserve Bank commenced a targeted bond-buying program aimed at keeping the yield at around 0.25 per cent. The success of yield curve control in Australia has prompted the US Federal Reserve to assess the strategy, although Stephen Halmarick from the Commonwealth Bank says it is unlikely to adopt this in the near-term. The Federal Reserve’s focus has been on buying a certain amount of bonds each month.

CORPORATES
RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

$A doing its job to help stabilise the economy

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Original article by Sarah Turner, Jonathan Shapiro
The Australian Financial Review – Page: 31 : 22-Apr-20

The Reserve Bank of Australia has bought $47bn worth of federal and state government bonds since 20 March. The central bank has progressively reduced its daily bond purchases from $5bn to just $500m since then, and it will now buy federal government bonds three times a week and state bonds just once a week. Meanwhile, RBA governor Philip Lowe says the Australian dollar fell more sharply than he had expected in March. It reached a low of $US0.5741 and has since recovered to around $US0.63. Lowe says the currency has been a "great shock-absorber" for the domestic economy over the last three decades.

CORPORATES
RESERVE BANK OF AUSTRALIA

Record bond deal shows confidence in Australia: PM

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Original article by Sarah Turner, Vesna Poljak, Jonathan Shapiro
The Australian Financial Review – Page: 29 : 17-Apr-20

The Australian Office of Financial Management has revealed that domestic investors accounted for 68.1 per cent of the federal government’s $13bn bond deal. Banks in turn bought more than 50 per cent of the new bonds, while investment managers accounted for 25 per cent of the issuance. Prime Minister Scott Morrison says the strong support for the bond deal demonstrates that investors are confident that Australia will be able to repay its debt.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY. OFFICE OF FINANCIAL MANAGEMENT, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Reserve Bank now important bond player

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Original article by Sarah Turner
The Australian Financial Review – Page: 31 : 15-Apr-20

Su-Lin Ong of RBC Capital Markets says the federal government has issued some $48bn worth of bonds so far in 2019-20. She estimates that the Reserve Bank of Australia has bought about $36bn worth of these government bonds in the last three weeks, as part of its quantitative easing program. Westpac’s Damien McColough notes that the central bank has emerged as one of the largest bond fund managers in the local market. Meanwhile, Ong says government bond issuance for 2019-20 could potentially top $160bn.

CORPORATES
RBC CAPITAL MARKETS, RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC

Reserve Bank likely to slow bond buying

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 30 : 7-Apr-20

The Reserve Bank of Australia’s quantitative easing program commenced on 20 March, and the central bank initially began purchasing $5bn worth of commonwealth government bonds per day. It has bought some $31bn of such bonds to date, including $10bn in the week ended 3 April. The RBA has been gradually been winding back its bond buying, and Damien McColough of Westpac says that even if its current momentum is maintained it would hold about $80bn worth of government bonds by the end of June. This would constitute about 30 per cent of the government bonds on issue. The RBA has also bought some $5bn worth of state government bonds.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC

Sweden dumps Oz bonds over climate inertia

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Original article by Paul Garvey
The Australian – Page: 4 : 15-Nov-19

Shane Oliver of AMP Capital says the Swedish central bank’s decision to divest bonds issued by the Western Australian and Queensland government is unlikely to have much impact on Australian bond prices. Sveriges Riksbank deputy governor­ Martin Floden has cited Australia’s lack of sufficient action on climate change for the move. The central bank has sold its holdings of bonds issued by the Canadian province of Alberta for the same reason.

CORPORATES
SVERIGES RIKSBANK, AMP CAPITAL INVESTORS LIMITED, INVESTOR GROUP ON CLIMATE CHANGE, S&P GLOBAL RATINGS, WESTERN AUSTRALIA. DEPT OF TREASURY AND FINANCE