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BT Financial Monthly Markets Chart: April 2010. An overview of movements in global financial markets. Prepared by BT Financial which includes reviews of the global share markets as well as Australian share market, dominant currencies, interest rates and both short and long term asset classes.
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BT Monthly Markets Chart
Pack – April 2010
An overview of movements in global financial markets
2
Global share markets were mostly lower in April...
Global share markets were mostly lower in April, with losses in Europe (-
3.9%), the UK (-2.2%) and Japan (-0.3%) countered by a relatively strong
gain in the US (+1.5%). Headlines throughout the month were dominated by
doubts over Greece’s ability to repay its debt and whether or not other
European nations will be similarly affected, namely Portugal and Spain.
The Australian share market gave back some of last month’s gains in
April, with the S&P/ASX 200 Accumulation Index closing the month 1.4%
lower. The fall came mainly on the back of renewed debt concerns in
Europe, though expectations of higher interest rates both here and in China
(which has the potential to hurt demand for our commodities) were also
negatives.
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 1988
…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
Apr-88 Apr-90 Apr-92 Apr-94 Apr-96 Apr-98 Apr-00 Apr-02 Apr-04 Apr-06 Apr-08 Apr-10
Jan 91
Gulf War
Feb 94
Bond Market Crash
Aug 97
Asian Currency
Crisis
Jul 98
Russian Bond
Crisis
Jul 01
Tech Wreck
Sep 01
Attack on
Twin Towers
Jun 07
US Sub-prime
Crisis
Nov 89
Fall of the
Berlin WallMar 03
Troops enter
Iraq
4
Source: BT Financial Group, Premium Data
S&P/ASX 200 Accumulation Index – year to 30 April 2010
The Australian share market closed 1.4% lower in
April
24,000
25,500
27,000
28,500
30,000
31,500
33,000
34,500
36,000
30/04/2009 30/06/2009 30/08/2009 30/10/2009 30/12/2009 28/02/2010 30/04/2010
5
Key Australian economic news – April
The Reserve Bank of Australia raised interest rates by a further 0.25% following
its early May meeting, taking the official cash rate to 4.50%. It was the Bank’s
sixth rate rise in the past seven meetings.
Australia’s trade balance was in deficit to the tune of A$2.08 billion in March after
a revised deficit of A$1.70 billion (previously A$1.93 billion) in February.
Inflation continued to rise, with the Consumer Price Index jumping 0.9% in the
March quarter. The market had expected a gain of 0.8%.
Westpac’s leading index – a measure of future economic growth – rose by 0.5%
in February, its highest level since July 2008.
Retail trade rose a modest 0.3% in March following a revised fall of 1.2%
(previously 1.4%) in February.
Source: BT Financial Group
6
The Australian dollar continued to rise against the
US dollar in April
The Australian dollar (A$) made only a modest gain against the US dollar in
April, up 0.8% on the back of stronger economic data and expectations of yet
more interest rate hikes by the Reserve Bank.
The A$ is now up 54% against the US$ since hitting a low of US$0.6012 cents in
October 2008 and may yet hit parity with the US currency later this year,
particularly if the differential between our interest rates and theirs continues to
widen.
At the end of April:
A$1 bought US$0.9244 +0.8%
€0.6957 +2.5%
¥86.72 +1.2%
Source: BT Financial Group
7
Currency markets – A$ per US dollar
Source: BT Financial Group. Figures at 30 April 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
Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 Oct-07 Apr-08 Oct-08 Apr-09 Oct-09 Apr-10
The Australian dollar versus the US dollar…
8
Currency markets – A$ per Euro
the Euro…
0.4900
0.5100
0.5300
0.5500
0.5700
0.5900
0.6100
0.6300
0.6500
0.6700
0.6900
0.7100
Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 Oct-07 Apr-08 Oct-08 Apr-09 Oct-09 Apr-10
Source: BT Financial Group. Figures at 30 April 2010
9
and the Yen
55
60
65
70
75
80
85
90
95
100
105
110
Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 Oct-07 Apr-08 Oct-08 Apr-09 Oct-09 Apr-10
Currency markets – A$ per Yen
Source: BT Financial Group. Figures at 30 April 2010
10
Official world interest rate movements – April
Interest rates in the major economies remained unchanged in April. The
Reserve Bank of Australia raised the official cash rate by a further 0.25% (to
4.50%) in early May.
Current rate Last moved
Direction of
last move
Australia 4.50% May 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
11
Source: BT Financial Group
30 April 2010
Global share market returns
1 year 3 years (pa) 5 years (pa)
Global
S&P 500 Index (US) 35.96% -7.15% 0.51%
Nasdaq (US Tech.) 43.32% -0.85% 5.07%
Nikkei 225 (Japan) 25.25% -14.03% 0.09%
Hang Seng (Hong Kong) 36.00% 1.28% 8.70%
DAX (Germany) 28.65% -6.09% 7.95%
CAC (France) 20.80% -13.80% -0.49%
FTSE 100 (UK) 30.86% -4.86% 2.95%
Australia
S&P/ASX 200 Accum. Ind. 32.38% -3.81% 8.43%
S&P/ASX Small Ordinaries 39.26% -8.99% 7.16%
S&P/ASX 300 Listed Prop. 38.87% -23.14% -6.52%
12
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 $A , UBS Bank Bill 0+ years
1-year rolling returns to 30 April 2010 (%) Best performing
asset class for the
year
2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995
Australian
cash3.63 6.28 7.10 6.32 5.75 5.61 5.17 4.93 4.71 6.34 5.31 5.07 5.31 7.02 7.80 6.52
Australian
bonds3.29 12.76 3.59 5.01 4.50 7.44 2.64 9.12 4.84 10.30 1.86 6.94 13.99 12.65 12.81 4.73
Australian
property38.87 -57.23 -23.56 33.20 18.04 21.29 11.73 13.25 18.53 11.49 6.70 1.92 29.88 19.11 3.19 6.39
Australian
shares 32.38 -28.82 -5.56 22.18 37.87 22.19 17.96 -6.46 4.05 10.56 6.46 15.90 15.97 15.97 17.01 4.29
International
bonds10.51 7.85 7.43 7.07 3.08 9.79 5.43 12.56 7.84 10.32 0.96 8.71 11.50 11.08 13.20 7.94
International
shares7.36 -22.02 -14.08 6.30 27.70 1.71 12.06 -26.98 -18.30 -4.26 27.91 14.03 55.36 11.05 9.85 7.85
13
Source: S&P/ASX 200 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property
Index, UBS Composite 0+ years index, Lehman Brothers Global Aggregate Bond Index hedged to $A
1-year returns to 30 April 2010 (%)
Short-term asset class performance (cont’d)
7.4
10.5
32.4
38.9
3.3
-22.0
7.9
-28.8
-57.2
12.8
30 April 2009
30 April 2010
Australian bonds
Listed property
Australian shares
Global bonds
Global shares
14
Long-term asset class performance
Note: Accumulated returns based on $1,000 invested in December 1984
Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+
years index, UBS Bank Bill 0+ years
30 April 2010
Australian bonds
Listed property
Australian shares
Cash
Global shares
$0
$1,500
$3,000
$4,500
$6,000
$7,500
$9,000
$10,500
$12,000
$13,500
$15,000
$16,500
$18,000
$19,500
$21,000
$22,500
$24,000
84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
15
Source: BT Financial Group. West Texas Intermediate oil price at 30 April 2010
Oil prices – US$ per barrel
Oil prices rose 2.9% in April on US dollar weakness and
reports that global manufacturing is strengthening
$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
16
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.
For more information, please call BT Customer Relations on 132 135 8:00am to 6:30pm (Sydney time)