Amp Buys Out Bonds
The Age
Wednesday September 2, 1992
The AMP Society, Australia's largest institutional investor, stunned credit markets late yesterday when it bought all of the $800 million of Treasury bonds issued at tender.
The move caught analysts by surprise and sent ripples through an erratic market, but it had little overall effect, with bonds and bills finishing mixed on the day.
AMP said it purchased $400 million of August 1998 bonds at a yield of 8.47 per cent, as well as $400 million of August 2003 bonds at a yield of 8.865 per cent.
It also announced the sale of $530 million of State Government bonds as part of a massive program to restructure its investments. AMP has not bought Commonwealth Government bonds for several years.
Benchmark Commonwealth October 2002 bond yields rose one point to 8.81 per cent, while September 1995 bond yields dipped nine points to 7.67 per cent.
Money markets were firmer. Unofficial cash dropped 30 points to 5.25 per cent, key 90-day paper fell 10 points to 5.95 per cent and 180-day bills nine points to six per cent.
Currency markets continued to consolidate. The Australian dollar lost just nine points to finish at 71.95 US cents.
Dealers said trade was calm until the last hour of the day, when a large sell order pushed the dollar to a low of 71.87 US cents.
``The employment numbers due out on the tenth (next Thursday) is probably the next biggest signal," one dealer said. ``At the moment the market is a little bit bullish, and it is looking for some sort of positive result to move up on.
``There was reasonable volume today, led by interest from local banks. I would say we can expect to stay around 72 US cents tomorrow, with 72.20 US cents being a very important support level technically." The dollar was fairly steady on the cross-rates, and it improved just one point on the Reserve Bank's trade-weighted index to 52.0.
© 1992 The Age
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