Fixed Income Analytics Demystified

In January 2003 data, corporate credit union assets, excluding U. S. Central, reached an all time high of $73.8 billion, up $4.9 billion from December, which is a 7.0% increase, the fastest growth rate since February 2002. (See chart) Other strong one-month growths include $5.1 billion in shares and $5.8 billion in investments. Despite the historical growth seen in January, the increase in assets and shares will likely continue into the following months. Data from the 20 Corporates participating in our First Look program show one-month asset growth of 11% for February 2003.

 
 

In January 2003 data, corporate credit union assets, excluding U. S. Central, reached an all time high of $73.8 billion, up $4.9 billion from December, which is a 7.0% increase, the fastest growth rate since February 2002. (See chart) Other strong one-month growths include $5.1 billion in shares and $5.8 billion in investments. Despite the historical growth seen in January, the increase in assets and shares will likely continue into the following months. Data from the 20 Corporates participating in our First Look program show one-month asset growth of 11% for February 2003.

Corporates had $60 billion in shares at December 2002. Actual 8% share growth in January and an estimated 11% growth in February will bring in about $12 billion in new shares in the first two months of 2003. If credit unions continue to put about 1/3 of their investments into Corporates, it is estimated that they will receive $36 billion of new CU investments in the first two months of 2003 or $54 billion in the first quarter if the same growth trend continues.

So how will corporate credit unions manage all this liquidity? Investment reports show that in January, Corporates poured $7.2 billion into U.S Central Daily Shares, $1.0 billion into privately issued mortgages, $700 million into repurchase agreements and $275 million into foreign banks. With rising share growth in the months ahead, Corporates face the increasing challenge of looking for investment options to give the returns the CUs are looking for.

 

 

 

April 28, 2003


Comments

 
 
 
  • nicely simplified for the non-professional investor
    Anonymous
     
     
     
  • Explanation of Total Return Analysis is not completely accurate... TRA function in Bloomberg may sometimes default to a horizon of 6 months, and incorporates an income return in addition to price return - which is NOT an instantaneous "shock test". Total Return is return from BOTH price & income.
    Anonymous
     
     
     
  • A concise discussion of important concepts. Would be worth expanding on in a conference setting (perhaps the Financial Strategies?) Tell Paul, it's principal, not principle (drives me nuts!).
    Anonymous
     
     
     
  • OAS is useful in comparing the relative values of different securities (Callables, Bullets, MBS/CMOs, etc.), not just callable bonds.
    Anonymous
     
     
     
  • A little more depth on each of the subjects would have been appreciated. Regardless, I did find some parts of the article beneficial.
    Anonymous
     
     
     
  • I think I finally get it.
    Anonymous
     
     
     
  • I nice over-view. It would have been helpful to have a little more detail or even a brief example.
    Anonymous
     
     
     
  • I nice over-view. It would have been helpful to have a little more detail or even a brief example.
    Anonymous