Financial Sector to Meet on Corporate Bond Market

Bond investors and banking executives are to meet with officials from the Treasury Tuesday morning to discuss the development of a blue-chip corporate bond market.

Reports say investors are apparently growing frustrated over this.

Supported by the Australian Securitisation Forum, the meeting will also involve corporations like Westpac and ANZ, who are against “vanilla-style” corporate bonds. Both companies have recently issued its own higher risk shares, following Caltex, which launched its $300 million hybrid note.

Also expected to be present in the meeting are organizations that hold the biggest superannuation funds, where 15 percent of it is invested in corporate bonds.

In a report done by the Australian Financial Centre Forum in 2010, it was suggested that companies look into the corporate bond market and improve investments in retail bonds for funding.
Bigger companies and many investors, however, think that offers in the market are of low quality and low exposure bonds. Some also say that the bond market’s choice to raise offshore funds using corporate bond market is lacking in development.

Analysts say that the bond market should find new sources so corporations can aggressively raise funds and make their assets liquid.

The meeting comes as the government is ready to trade government bonds at the stock market by next year’s end, opening up billions of opportunities for many investors. This was actually being planned for many years now, pending a complicated regulation process.