ANALYSIS AND COMMENTS MARKET SUMMARY


FINANCIAL MARKET SUMMARY

Selected financial instruments
		Outstanding at end	Transactions during	Other changes during	Outstanding at end
		Sep Qtr 2011	Dec Qtr 2011	Dec Qtr 2011	Dec Qtr 2011
		$b	$b	$b	$b
Currency and deposits
	Currency	55.9	3.9	-	59.8
	Transferable deposits	595.7	7.2	-3.4	599.5
	Other deposits	1 090.1	-13.7	-2.4	1 074.1
Short term debt securities
	Bills of exchange	126.2	-1.3	-0.3	124.6
	One name paper	349.9	-0.7	-9.1	340.0
Long term debt securities
	Bonds, etc.	1 565.0	10.6	-13.3	1 562.3
Derivatives
	Derivatives	348.5	-5.4	2.6	345.6
Loans and placements
	Short term	343.2	-19.5	-2.0	321.7
	Long term	2 375.8	32.5	-4.8	2 403.5
Shares and other equity
	Listed	1 162.2	16.8	-25.6	1 153.4
	Unlisted	1 447.7	12.3	-20.8	1 439.2
Insurance technical reserves
	Reserves of pension funds and life offices	1 316.5	26.0	-10.9	1 331.5
	General insurance prepayments and reserves	91.1	0.3	-	91.4
- nil or rounded to zero (including null cells)

Currency liabilities increased to $59.8b at the end of December 2011, following transactions of $3.9b during the quarter compared with transactions of $1.8b for September 2011. Deposit liabilities decreased to $1,673.6b at the end of December 2011, following transactions of -$6.5b during the quarter compared with the transactions of $49.1b in the previous quarter. The major contributor was the Central Bank which accepted $10.7b. This was offset by rest of world which decreased $9.8b and other depository corporations which decreased $8.6b.

Short term debt security liabilities decreased to $464.6b at the end of December 2011, following redemptions of $2.0b. Total long term debt security liabilities decreased to $1,562.3b at the end of December 2011, following net issuance of $10.6b during the quarter. National General Government issued bonds worth $17.0b, all of which was issued in the domestic market. Other private non-financial corporations bonds transactions were worth $8.5b, which consisted of $0.6b of domestic bond maturities and $9.1b of offshore bond issuance. Central borrowing authorities bonds transactions were worth $4.6b, of which $5.2b was issued in the domestic market and $0.6b in offshore bond maturities. Rest of world issued bonds worth $2.0b, of which $0.4b was issued domestically and $1.6b was issued offshore. Banks redeemed bonds worth $15.2b, of which $5.4b of domestic bonds and $9.8b of offshore bonds. Securitisers redeemed bonds worth $5.6b, of which $4.6b were issued domestically and $1.1b were issued offshore.

The value of derivative contracts on issue at the end of December 2011 decreased $2.9b to $345.6b. The major component of this decrease was net settlements of $5.4b for the quarter of which the major contributors were national general government of $2.7b, rest of world of $1.8b and banks of $1.7b. This was offset by valuation increases of $2.6b.

Loan liabilities rose to $2,725.2b at the end of December 2011, following transactions of $13.0b during the quarter. Households borrowed $17.9b, other private non-financial corporations borrowed $5.7b, and state and local general government borrowed $3.3b. The major offset to these increases was by banks repaying $10.3b of their liabilities.

The listed share market decreased by $8.8b to $1,153.4b at the end of December 2011, with net issuance of $16.8b and valuation decreases of $25.6b. The major contributors to the issuance were other private non-financial corporations which issued $9.6b and banks which issued of $3.3b. The value of the unlisted share market decreased $8.5b to $1,439.2b at the end of December 2011, with net issuance of $12.3b and valuation decreases of $20.8b. Other private non-financial corporations issued $7.5b and rest of the world issued $6.8b. Non money market investment funds bought back $2.0b during the quarter.

At the end of December 2011, the insurance technical reserves of life offices and pension funds were $1,331.5b following transactions during the quarter of $25.9b and valuation decreases of $10.9b. General insurance prepayments and reserves were $91.4b.