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BT Financial Monthly Market Chart: February 2010. Global share markets were mixed in February. For the latest market figures, check out the February 2010 BT chart pack.
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BT Monthly Markets Chart Pack – February 2010
An overview of movements in global financial markets
2
Global share markets were mixed in February...
Global share markets proved to be a mixed bag in February as concerns over the debt levels of some European countries, particularly Greece, countered a speech by US Federal Reserve Chairman, Ben Bernanke, in which he said that US interest rates will remain low for some time yet. Share markets were higher in the UK (+3.2%) and the US (+2.9%) but lower in Europe (-1.7%) and Japan (-0.7%).
The Australian share market made good gains in February, with the S&P/ASX 200 Accumulation Index closing the month 2.1% higher. The result came after stronger jobs numbers and better-than-expected bank earnings overshadowed concerns that the Euro-zone’s sovereign debt problems will stall the global recovery.
3
Global shares measured by the MSCI World ex-Australia (net dividends) Index in A$.Source: BT Financial Group, MSCI
Impact of major market events on global shares since 1987
…but continue to perform well over the long-term, despite some major market events
700
1,200
1,700
2,200
2,700
3,200
3,700
4,200
4,700
5,200
5,700
6,200
Feb-88 Feb-90 Feb-92 Feb-94 Feb-96 Feb-98 Feb-00 Feb-02 Feb-04 Feb-06 Feb-08 Feb-10
Jan 91Gulf War
Feb 94Bond Market Crash
Aug 97Asian Currency Crisis
Jul 98Russian Bond Crisis
Jul 01Tech Wreck
Sep 01Attack on Twin Towers
Jun 07US Sub-prime Crisis
Nov 89Fall of the Berlin Wall Mar 03
Troops enter Iraq
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Source: BT Financial Group, Premium Data
S&P/ASX 200 Accumulation Index – year to 28 February 2010
The Australian share market closed 2.1% higher in February
21,000
22,500
24,000
25,500
27,000
28,500
30,000
31,500
33,000
34,500
36,000
28/02/2009 28/04/2009 28/06/2009 28/08/2009 28/10/2009 28/12/2009 28/02/2010
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Key Australian economic news – February
The RBA raised interest rates by 0.25% following its early March meeting, taking the official cash rate to 4.00%. The move comes after three consecutive months of rates rises at the end of last year.
The Westpac/Melbourne Institute’s consumer sentiment survey fell 2.6% in February, despite the RBA’s decision to leave interest rates on hold that month.
The Australian economy added 52,700 jobs in January – the most for any month in three years – which pushed the local unemployment rate down to just 5.3%.
After jumping 1.5% in November, retail trade fell 0.7% in December to close the year 2.1% higher.
Housing finance dropped by 2.7% in December but still ended the year 19.5% higher thanks in part to the Government’s first home owner’s grant.
Source: BT Financial Group
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The Australian dollar rose against the US dollar in February
The Australian dollar (A$) rose against the US dollar in February, gaining 1.2% on the back of stronger commodity prices and expectations that the Reserve Bank will continue to raise interest rates over the near-term.
The A$ is now up 49% against the US$ since hitting a low of US$0.6012 cents
back in October 2008.
At the end of February:
A$1 bought US$0.8948 +1.2%
€0.6568 +2.9%
¥79.46 -0.5%
Source: BT Financial Group
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Currency markets – A$ per US dollar
Source: BT Financial Group. Figures at 28 February 2010
0.6300
0.6600
0.6900
0.7200
0.7500
0.7800
0.8100
0.8400
0.8700
0.9000
0.9300
0.9600
0.9900
Feb-05 Aug-05 Feb-06 Aug-06 Feb-07 Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10
The Australian dollar versus the US dollar…
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Currency markets – A$ per Euro
the Euro…
0.4900
0.5050
0.5200
0.5350
0.5500
0.5650
0.5800
0.5950
0.6100
0.6250
0.6400
0.6550
0.6700
Feb-05 Aug-05 Feb-06 Aug-06 Feb-07 Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10
Source: BT Financial Group. Figures at 28 February 2010
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and the Yen
55
60
65
70
75
80
85
90
95
100
105
110
Feb-05 Aug-05 Feb-06 Aug-06 Feb-07 Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10
Currency markets – A$ per Yen
Source: BT Financial Group. Figures at 28 February 2010
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Official world interest rate movements – February
Interest rates in the major economies remained unchanged in February. The Reserve Bank of Australia raised the official cash rate by 0.25% (to 4.00%) in early March.
Current rate Last movedDirection of last move
Australia 4.00% Mar 2010
US 0% - 0.25% Dec 2008
Europe (ECB) 1.00% May 2009
Japan 0.10% Dec 2008
United Kingdom 0.50% Mar 2009
Source: BT Financial Group
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Source: BT Financial Group
28 February 2010
Global share market returns
1 year 3 years (pa) 5 years (pa)
Global
S&P 500 Index (US) 50.25% -7.75% -1.70%
Nasdaq (US Tech.) 62.45% -2.52% 1.76%
Nikkei 225 (Japan) 33.79% -16.83% -2.92%
Hang Seng (Hong Kong) 60.86% 1.60% 7.74%
DAX (Germany) 45.65% -5.88% 5.17%
CAC (France) 37.24% -12.40% -1.63%
FTSE 100 (UK) 39.80% -4.62% 1.51%
Australia
S&P/ASX 200 Accum. Ind. 44.70% -3.21% 6.68%
S&P/ASX Small Ordinaries 63.05% -8.30% 4.28%
S&P/ASX 300 Listed Prop. 42.60% -24.31% -7.44%
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Short-term asset class performance
Source: S&P/ASX 200 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, Barclays Capital Global Aggregate Bond Index hedged to $A , UBS Bank Bill 0+ years
1-year rolling returns to 28 February 2010 (%) Best performing asset class for the year
2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995
Australian cash
3.48 7.12 6.83 6.16 5.80 5.57 5.03 4.86 4.91 6.35 5.17 5.11 5.49 7.28 7.87 5.98
Australian bonds
3.45 14.45 2.37 4.10 6.79 5.60 2.75 9.63 3.85 12.48 1.54 7.10 13.60 12.49 14.57 -1.31
Australian property
42.60 -58.24 -27.20 33.45 17.42 25.77 14.98 10.23 14.54 14.28 4.68 2.75 25.78 18.74 12.02 -3.19
Australian shares
45.06 -37.26 -0.76 23.77 23.08 29.57 25.77 -14.70 6.28 9.63 18.06 9.21 13.72 11.65 23.83 -7.87
International bonds
10.79 6.22 7.74 5.41 6.16 7.33 6.95 12.24 7.35 11.51 1.10 8.21 11.06 11.00 15.90 2.36
International shares
9.03
-22.15 -16.60 8.93 20.97 8.42 13.37 -32.73 -13.23 0.29 20.20 23.81 41.85 11.82 19.36 -2.81
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Source: S&P/ASX 200 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, Barclays Capital Global Aggregate Bond Index hedged to $A
1-year returns to 28 February 2010 (%)
Short-term asset class performance (cont’d)
9.0
10.8
45.1
42.6
3.5
-22.2
6.2
-37.3
-58.2
14.5
28 February 2009
28 February 2010
Australian bonds
Listed property
Australian shares
Global bonds
Global shares
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Long-term asset class performance
Note: Accumulated returns based on $1,000 invested in December 1984Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, UBS Bank Bill 0+ years
28 February 2010
Australian bonds
Listed property
Australian shares
Cash
Global shares
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Source: BT Financial Group. West Texas Intermediate oil price at 28 February 2010
Oil prices – US$ per barrel
Oil prices closed February 9.3% higher amid reports that global demand will rise throughout 2010
$0
$15
$30
$45
$60
$75
$90
$105
$120
$135
$150
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
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This presentation has been prepared by BT Financial Group Limited (ABN 63 002 916 458) ‘BT’ and is for general information only. Every effort has been made to ensure that it is accurate, however it is not intended to be a complete description of the matters described. The presentation has been prepared without taking into account any personal objectives, financial situation or needs. It does not contain and is not to be taken as containing any securities advice or securities recommendation. Furthermore, it is not intended that it be relied on by recipients for the purpose of making investment decisions and is not a replacement of the requirement for individual research or professional tax advice. BT does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this presentation. Except insofar as liability under any statute cannot be excluded, BT and its directors, employees and consultants do not accept any liability for any error or omission in this presentation or for any resulting loss or damage suffered by the recipient or any other person. Unless otherwise noted, BT is the source of all charts; and all performance figures are calculated using exit to exit prices and assume reinvestment of income, take into account all fees and charges but exclude the entry fee. It is important to note that past performance is not a reliable indicator of future performance.
This document was accompanied by an oral presentation, and is not a complete record of the discussion held.
No part of this presentation should be used elsewhere without prior consent from the author.
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