Aussie Players Eye Interbank Market For Inflation

Derivative houses in Australia including ABN AMRO and Macquarie Bank are looking to establish an interbank market for inflation-linked derivatives, potentially within the next year.

  • 02 May 2004
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Derivative houses in Australia including ABN AMRO and Macquarie Bank are looking to establish an interbank market for inflation-linked derivatives, potentially within the next year. "I certainly believe that the inflation outlook has shifted globally and [inflation is] becoming much more topical," said Franciso Sarmiento, associate director in structured trading and derivatives at Macquarie, noting that the potential for increased inflation worldwide is on the radar screen for a growing number of end users.

While one-off inflation-linked derivative deals have been around for a few years in Australia, the desire for a deeper market has surfaced. Last year an Australian Financial Markets Association's swap committee was given the mandate to push for the development of inflation-linked products and bring out standardized definitions for consumer price index-linked swaps. At the start of the year, the domestic market adopted the definitions for trade documents. The working group is likely to meet in the next few months to discuss ways to increase the profile of the products. "A lot of the hard work has already been done--it's becoming a matter of saying 'Let's go' and setting up broker screens," said Lloyd Alty, associate director in the interest rate trading group at ABN in Sydney.

Alty noted that within two years of the launch of an inter-dealer market, the derivatives could rival the size of the domestic inflation-linked bond market which has an estimated annual turnover of AUD1 billion (USD745 million).

The next step, according to dealers, is to push for greater end user education and use, which will likely begin with a more corporate bonds linked to inflation. "We'll see more transactions in the next 12 months, and following that I expect to see interbank trading," said Sarmiento.

  • 02 May 2004

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 358,291.38 1348 9.06%
2 JPMorgan 320,704.66 1461 8.11%
3 Bank of America Merrill Lynch 318,128.31 1104 8.04%
4 Goldman Sachs 236,643.87 789 5.98%
5 Barclays 231,197.41 895 5.84%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
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1 HSBC 35,007.57 165 6.53%
2 Deutsche Bank 34,880.53 120 6.51%
3 Bank of America Merrill Lynch 31,805.65 97 5.93%
4 BNP Paribas 27,920.60 169 5.21%
5 SG Corporate & Investment Banking 24,398.89 138 4.55%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
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  • Today
1 JPMorgan 19,745.92 80 8.85%
2 Morgan Stanley 16,334.63 83 7.32%
3 Citi 15,972.34 95 7.16%
4 UBS 15,487.17 60 6.94%
5 Goldman Sachs 14,053.61 76 6.30%