ANALYSIS AND COMMENTS MARKET SUMMARY


FINANCIAL MARKET SUMMARY

Selected financial instruments
		Outstanding at end	Transactions during	Other changes during	Outstanding at end
		Dec Qtr 2010	Mar Qtr 2011	Mar Qtr 2011	Mar Qtr 2011
		$b	$b	$b	$b
Currency and deposits
	Currency	56.9	-3.3	-	53.7
	Transferable deposits	538.4	-2.0	-0.1	536.2
	Other deposits	1 014.0	49.4	1.2	1 064.5
Short term debt securities
	Bills of exchange	132.4	-2.8	-	129.6
	One name paper	336.5	-10.9	0.8	326.5
Long term debt securities
	Bonds, etc.	1 430.9	37.0	-9.1	1 458.9
Derivatives
	Derivatives	349.5	-48.8	31.7	332.4
Loans and placements
	Short term	276.3	6.2	-1.1	281.4
	Long term	2 256.0	41.6	-2.0	2 295.6
Shares and other equity
	Listed	1 400.6	8.5	8.4	1 417.5
	Unlisted	1 453.4	2.9	18.6	1 474.9
Insurance technical reserves
	Reserves of pension funds and life offices	1 268.6	19.8	14.0	1 302.4
	General insurance prepayments and reserves	83.3	1.8	-	85.1
- nil or rounded to zero (including null cells)

Currency liabilities decreased to $53.7b at the end of March 2011, following transactions of -$3.3b during the quarter compared with transactions of $3.3 for December 2010. Deposit liabilities increased to $1,600.7b at the end of March 2011, following transactions of $47.4b during the quarter compared with the transactions of $40.3b in the previous quarter. The major contributor was banks which accepted $31.3b and Other depository corporations which accepted $14.2b.

Short term debt security liabilities decreased to $456.1b at the end of March 2011, following net redemption of $13.7b. Total long term debt security liabilities increased to $1,458.9b at the end of March 2011, following net issuance of $37.0b during the quarter. National general government issued bonds worth $13.3b, of which $13.2b was issued domestically and $0.1b was issued offshore. Central borrowing authorities issued bonds worth $8.6b, of which $9.6b was issued in the domestic market and $1.0b of offshore bonds matured. Banks had a net issuance of $5.1b, of which $4.6b was issued domestically and $0.6b was issued offshore. Rest of World issued a net $4.7b, of which $5.1b was issued in the domestic market and $0.4b of offshore bonds matured. Other private non-financial corporations had a net issuance of $3.8b, of which $0.9b issued domestically and $3.0b was issued offshore.

The value of derivative contracts on issue at the end of March 2011 decreased by $17.1b to $332.4b. The major component of this decrease was net settlements which were $48.8b for the quarter of which the major contributors were banks of $22.3b and Rest of world of $10.2b. This was offset by valuation increases of $31.7b.

Loan liabilities rose to $2,577.0b at the end of March 2011, following transactions of $47.8b during the quarter. Households borrowed $22.5b, central borrowing authorities borrowed $9.6b, state and local general government borrowed $6.9b, and other private non-financial corporations borrowed $6.1b The major offset to these increases was by other financial corporations repaying $1.0b.

The listed share market increased by $16.9b to $1,417.5b at the end of March 2011, with net issuance of $8.5b and valuation increase of $8.4b. The major contributors were other private non-financial corporations which issued $10.7b and life insurance corporations which issued $3.8b. The value of the unlisted share market increased by $21.5b to $1,474.9b at the end of March 2011, with net issuance of $2.9b and valuation increases of $18.6b. Rest of the world issued $10.8b. Non money market investment funds and money market investment funds bought back $4.7b and $1.9b respectively during the quarter.

At the end of March 2011, the insurance technical reserves of life offices and pension funds were $1,302.4b following transactions during the quarter of $19.8b and valuation increases of $14.0b. General insurance prepayments and reserves were $85.1b.