ANALYSIS AND COMMENTS MARKET SUMMARY


FINANCIAL MARKET SUMMARY

Selected financial instruments
		Outstanding at end	Transactions during	Other changes during	Outstanding at end
		Jun Qtr 2010	Sep Qtr 2010	Sep Qtr 2010	Sep Qtr 2010
		$b	$b	$b	$b
Currency and deposits
	Currency	52.7	0.7	-	53.3
	Transferable deposits	431.2	12.5	-3.0	440.8
	Other deposits	1 026.5	35.0	-21.3	1 040.1
Short term debt securities
	Bills of exchange	139.5	-2.2	-	137.3
	One name paper	342.5	-20.1	-4.1	318.2
Long term debt securities
	Bonds, etc.	1 442.2	40.5	-38.6	1 444.1
Derivatives
	Derivatives	342.5	-9.0	55.0	388.5
Loans and placements
	Short term	282.0	-7.5	-4.9	269.5
	Long term	2 205.3	19.0	-9.2	2 215.2
Shares and other equity
	Listed	1 228.1	21.4	85.1	1 334.5
	Unlisted	1 292.7	11.5	8.1	1 312.3
Insurance technical reserves
	Reserves of pension funds and life offices	1 136.6	10.6	37.8	1 185.0
	General insurance prepayments and reserves	77.7	3.1	3.2	84.0
- nil or rounded to zero (including null cells)

Currency liabilities increased to $53.3b at the end of September 2010, following transactions of $0.7b during the quarter compared with transactions of -$0.8b for June 2010. Deposit liabilities increased to $1,480.9b at the end of September 2010, following transactions of $47.5b during the quarter compared with the transactions of $20.6b in the previous quarter. The major contributor was banks which accepted $47.0b. This was partly offset by net withdrawals from the Central bank of $7.8b.

Short term debt security liabilities decreased to $455.5b at the end of September 2010, following net redemptions of $22.3b. Total long term debt security liabilities increased to $1,444.1b at the end of September 2010, following net issuance of $40.5b during the quarter. Banks issued bonds worth of $15.3b of which $11.1b was issued in the domestic market and $4.2b was issued offshore. National general government had net issuance of $8.0b, all of which was issued in the domestic market. Other private non-financial corporations issued bonds worth of $7.9b of which $0.7b was issued domestically and $7.2b offshore. Securitisers had net issuance of $6.4b of which $7.4b was issued in the domestic market and there were $1.0b of maturities offshore. Central borrowing authorities issued bonds worth $3.6b, of which $4.5b was issued domestically and there were $0.8b of maturities offshore.

The value of derivative contracts on issue at the end of September 2010 increased by $46.0b to $388.5b. The major component of this increase were valuation increases of $55.0b. This was offset by net settlements which was $9.0b for the quarter of which the major contributors were Rest of world of $3.8b and banks of $3.3b.

Loan liabilities fell to $2,484.7b at the end of September 2010, following transactions of $11.5b during the quarter. Households borrowed $17.1b, state and local general government borrowed $4.7b and state and local public non-financial corporations borrowed $2.8b. The major offset to these increases was by banks repaying $6.5b and other private non-financial corporations repaying $3.9b.

The listed share market increased by $106.5b to $1,334.5b at the end of September 2010, with net issuance of $21.4b and valuation increase of $85.1b. The major contributors were other private non-financial corporations which issued $17.8b. The value of the unlisted share market increased by $19.6b to $1,312.3b at the end of September 2010, with net issuance of $11.5b and valuation increases of $8.1b. Rest of the world and other private non-financial corporations issued $18.1b and $3.4b respectively, whilst money market investment funds and non-money market investment funds bought back $8.0b and $3.0b respectively during the quarter.

At the end of September 2010, the insurance technical reserves of life offices and pension funds were $1,183.1b following transactions during the quarter of $10.5b and valuation increases of $37.8b. General insurance prepayments and reserves were $84.0b.