ANALYSIS AND COMMENTS MARKET SUMMARY


FINANCIAL MARKET SUMMARY

Selected financial instruments
		Outstanding at end	Transactions during	Other changes during	Outstanding at end
		Sep Qtr 2010	Dec Qtr 2010	Dec Qtr 2010	Dec Qtr 2010
		$b	$b	$b	$b
Currency and deposits
	Currency	53.7	3.3	-	57.0
	Transferable deposits	454.3	-0.7	3.2	456.7
	Other deposits	1 059.8	31.4	-5.4	1 085.8
Short term debt securities
	Bills of exchange	137.3	-5.0	-	132.4
	One name paper	315.9	23.8	-3.3	336.4
Long term debt securities
	Bonds, etc.	1 451.1	32.1	-47.1	1 436.2
Derivatives
	Derivatives	388.1	-65.6	28.3	350.8
Loans and placements
	Short term	269.9	3.9	-1.8	272.0
	Long term	2 251.0	19.2	-	2 270.3
Shares and other equity
	Listed	1 322.6	22.2	55.9	1 400.6
	Unlisted	1 417.0	5.9	25.7	1 448.5
Insurance technical reserves
	Reserves of pension funds and life offices	1 216.3	14.5	25.9	1 256.7
	General insurance prepayments and reserves	84.2	-0.9	-	83.3
- nil or rounded to zero (including null cells)

Currency liabilities increased to $57.0b at the end of December 2010, following transactions of $3.3b during the quarter compared with transactions of $1.0b for September 2010. Deposit liabilities increased to $1,542.5b at the end of December 2010, following transactions of $30.7b during the quarter compared with the transactions of $51.5b in the previous quarter. The major contributor was banks which accepted $27.6b. This was partly offset by net withdrawals from Other Depository Corporations of $5.8b.

Short term debt security liabilities increased to $468.8b at the end of December 2010, following net issuances of $18.8b. Total long term debt security liabilities decreased to $1,436.2b at the end of December 2010, following net issuance of $32.1b during the quarter. Rest of the World issued a net $13.3b, of which $4.0b was issued domestically and $9.4b issued offshore. National general government issued bonds worth $13.2b, of which $13.3b was issued in the domestic market and $0.1b of maturities offshore. Banks had a net issuance of $4.8b, of which $6.0b was issued in the domestic market and $1.1b of maturities offshore. Other Depository Corporations issued bonds worth $4.1b, of which $4.2b was issued domestically and $0.1b of maturities offshore. Private non-financial investment funds had net issuance of $3.0b, of which there were $1.0b of maturities domestically and $4.0b issued offshore.

The value of derivative contracts on issue at the end of December 2010 decreased by $37.3b to $350.8b. The major component of this decrease were valuation increases of $28.3b. This was offset by net settlements which was $65.6b for the quarter of which the major contributors were banks of $30.0b and Rest of world of $15.9b.

Loan liabilities rose to $2,542.3b at the end of December 2010, following transactions of $23.1b during the quarter. Households borrowed $23.3b, banks borrowed $1.8b and central borrowing authorities borrowed $1.3b. The major offset to these increases was by private non-financial investment funds repaying $5.0b and state and local general government repaying $1.7b.

The listed share market increased by $78.0b to $1,400.6b at the end of December 2010, with net issuance of $22.2b and valuation increase of $55.8b. The major contributors were other private non-financial corporations which issued $22.1b. The value of the unlisted share market increased by $31.5b to $1,448.5b at the end of December 2010, with net issuance of $5.9b and valuation increases of $25.6b. Rest of the world issued $9.7b. Non money market investment funds and money market investment funds bought back $2.3b and $2.0b respectively during the quarter.

At the end of December 2010, the insurance technical reserves of life offices and pension funds were $1,254.6b following transactions during the quarter of $14.4b and valuation increases of $25.9b. General insurance prepayments and reserves were $83.3b.