Full text of H.16 Capital Market Developments : October 26, 1959
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Not for Publication DECONTROLLED AFTER SIX MONTHS H.lii October 26, 1959* CAPITAL MARKET DEVELOPMENTS (Including Monthly Review of Sources and Usesi of Funds of"Financial Intermediaries) The volume of large public security financing for new capital continues to be substantial. During the week ending October 23, corporations sold large issues totaling $85 million; a Public Housing Authority issue for $102 million and a foreign government offering for $20 million were also sold. The calendar for this week includes large corporate issues with aggregate proceeds of $110 million and State and local government issues totaling $90 million. Bond; yields - Bond yields declined last week for all categories of outstanding bonds, except those for high-grade corporate bonds, which remained stable. A new Aa-rated first mortgage electric utility bond issue was offered to investors last week to yield U.95 per cent, 15 basis points higher than the yield for a comparable offering made a month earlier. * It should be noted that the recent issue carried a 5-year refunding restriction, while the earlier issue had no such restriction. Mortgage recordings - Total nonfarm mortgage recordings remained at a record seasonally adjusted annual rate of $33-b billion in July, one-fifth above a year earlier and two-fifths above the low of late 1957 and early 1958. Conventional recordings in August continued to represent about three-fourths of the total. The mortgage recordings series, based on moitgages of $20,000 or less primarily on 1- to U-family properties, serves as an indicator of trends in home financing. By excluding mortgages of nore than #20,000., this indicator has understated the volume and type of Lome financing'to a minor but increasing extent in the past few years. These over-^20,000 mortgages, nearly all of the conventional type, have become somewhat ' more frequent recently as property values have risen and lending t e m s have been liberalized. But tne degree of understatement, while tending upward, may still be only a few percentage points of the total. Stock prices - Stock prices, as measured by Standard and Poor's index of 500 common stocks, declined last week, closing at 56.56 on October 23. Trading activity increased, averaging 2.8 million shares a day. Institutional investors - In August, savings inflow at life insurance companies and savings and loan associations continued to increase more rapidly than a year earlier, with the former being U per cent larger and the latter one-eighth larger. In contrast, the increase in deposits at mutual savings banks was again smaller (two-fifths less). Combined growth at these savings institutions—as measured by the increase in life insurance company assets, share.capital at savings and loan associations and deposits at mutual savings banks—amounting to $1:68 million, showed little change this August from that of a year earlier. Growth for the first eight months this year, totaling $9.2 billion, was 5 per cent larger with life insurance company assets and savings aind loan share capital each increasing one-eighth more and mutual savings bank deposits increasing two-fifths less than a year ago. The investment pattern of these savings institutions showed little change in August from that of other recent months this year. As in most months, funds invested in mortgages were substantially larger than in the corresponding months of 1958. The increase in mortgage holdings by life insurance companies was one-fourth larger, for savings and loan associations nearly one-third larger, but for mutual savings banks one-fifth smaller. (Early in the year these savings banks also increased their mortgage holdings more rapidly than a year earlierj however since May the increases have been smaller.) The increase in business security portfolios was small during August. For the first time this year the increase in business security holdings of life insurance companies was sharply smaller (two-fifths less) than in the similar month of 1958. In contrast, savings banks have generally reduced their holdings thus far this year. The increase in life "insurance company holdings of U. S. Government securities was more than twice as large as a year earlier with most of the increase occurring in Treasury bills, while the increase in those held by savings and loan associations was four-fifths smaller. Holdings of Governments by mutual savings banks declined further in August; they had risen slightly in August 1958. More detailed information concerning recent capital market developments is presented in the attached exhibits. Capital Markets Section, Division of Research and Statistics, Board of Governors of the Federal Reserve System, HIGH-GRADE BOND YIELDS -x_/J 2.0 LOWER-GRADE BOND YIELDS Exhibit b H.Ik Tables for Exhibit A High-grade Hond Yields Date U. S. Govt, long-term 2/ Corporate Aaa 1/ Spread between U. S. Govt, and Corporate State and Aaa local Aaa State and local govt. Aaa J/ (Per cent) 1954 - Low 1957 - High 1958 - High Low 1959 - High Low Sept. 25 Oct. 2 Oct. 9 Oct. 16 Oct. 23 £/ 2.85 4.14 4.13 3.55 4.57 4.09 (4/23) (9/27) (10/10) (5/2) (10/9) (1/9) 2.45 3.76 3.84 3.07 4.30 3.83 (0/6) (10/18) (12/26) (4/25) (9/18) (1/2) 4.27 4.21 4.14 4.13 4.06 4.54 4.57 4.57 4.56 4.56 1.90 3.45 3.31 2.64 3.65 3.06 (9/2) (8/29) (9/11) (5/1) (9/24) (3/26) 3.65 3.64 3.61 3.58 3.53 .30 .60 .51 .22 .50 .16 .30 .47 .72 .34 .92 .53 .27 .36 .43 .43 .50 .62 .57 .53 .55 .53 Lower-grade Bond Yields Date Corporate Baa 1/ State and local govt. Baa]/ Spread between Aaa and Baa State and Corporate local govt. (Per cent) 1954 - Low 1957 - High 1958 - High Low 1959 - High Low 3.44 5.10 4.96 4.51 5.29 4.83 Sept. 25 Oct. 2 Oct. 9 Oct. 16 Oct. 23 2/ 5.22 5.26 5.28 5.29 5.28 (12/31) (11/29) (1/3) (7/11) (10/16) (4/17) 2.93(8/5) 4.51 (8/29) 4.34 (9/11) 3.64 (5/1) 4.46 (7/2) 3.92 (3/26) 4.41 4.44 4.41 4.40 4.34 .52 1.27 1.28 .77 .77 .56 .96 1.21 1.11 .68 .69 .71 .73 .72 .79 .80 .80 .82 .81 .79 •qJ Preliminary. 1/ Weekly average of daily figures. Average term of bonds included is 25-26 years. 2/ Weekly average of daily figures. The series includes bonds due or callable in 10 years or more. j|/ Thursday figures. Only general obligation bondc are includedj average term is 20 years. Note.—highs and lows are for individual series and may be on different dates for different series. EXHIBIT C STOCK MARKET 1956 "57 MORTGAGE RECORDINGS AND LOANS 1958 1959 Exhibit D - T a b l e s f o r todiibi'L C Stock Market Trading Common Stock Date price volume i n d e x 1/ yields 2/ (per cent) Stock market customer credit y Customers' (millions debit bal- stock of shares) ances 4/ (Millions of 1953-1958 5k.ll - High to dollars) 3.30 4.9 4,1*92 3,285 22.95 6.25 0.9 1,31k 669 60.51 3.08 4,764 3,1)01 Low k.3 2,055 - High 54. 37 3.3k 2.1 4,443 3,250 1,332 1,210 Low 1959 Bank loans "others" 5 / 1,317 1,373 1,180 August 59.10 3.13 2.4 4,528 3,269 1,259 September 57.05 3.26 2.7 4,443 3,250 1,193 Oct. 2 57.20 3.21+ 2.7 1,193 Oct. 9 57.00 3.25 2.4 n.a. Oct. 16 57.33 3.22 2.3 n.a. n.a. 1,180 Oct. 23 e / 56.56 3.28 2.8 n.a. n.a. n.a. 1,195 n.a,--Not available. g/ Preliminary. 1/ Standard and Poor's Tmposite index of 500.common stocks, weekly closing prices, 1941-43=10. Monthly date, are averages of daily figures rather than of Fridays1 only. Highs and lows are for Fridays' data only, 2/ Standard and Poor's composite stock yield based on Wednesday data converted to weekly closing prices by Federal Reserve. Yields shown are for dates on which price index reached its high or low. 3/ Averages of daily trading volume on the New York Stock Exoluvnge. 4/ End of month figures for member firms of the New York Stock Exchange which carry margin accounts; excludes balances secured.by U. S. Government obligations. 5/ Wednesday figures for weekly reporting member banks. Excludes loans for purchasing or carrying U. S. Government securities • prior to July 1, 1959, such-loans are excluded only at banks in New York and Chicago. Weekly reporting hanks account for about 70 per cent of loans to others. For further detail see Bulletin. N o n f a r m M o r t g a g e R e c o r d i n g s a n d L o a n s 1/ Unadjusted Total Bate ^Seasonally adjusted - Aug. 2,413 Sept. Oct. 2,488 2,567 Nov. 2,652 Dec. 2,629 2/ Unadjusted 2,535 2,#6 FHA 371 1,80 2,857 : 501 2,62? 2,432 457 5io -VA Conv. 156 2,007 189 1,927 2,116 239 216 257 1,759 1,861 1,491 2,631 2,353 2,215 585 5o6 276 Feb. 238 1,500 Mar. 2,683 2,586 530 261 1,796 Apr. 2,683 2,776 490 231 2,055 May 2,757 2,780 2,768 478 212 2,079 2,97k 221 2,233 3,100 521 524 227 2,871 504 202 2,349 2,165 2,677 July 2,787 - Aug. n.a.—Not available. 1/ Total recordings data are estimates based on reports from about 450 areas and include mortgages of $20,000 or less secured by^nonfarm real estate, primarily residential properties. FHA-insured loans represent gross amount of insurance written, and VA-guaranteed loans the gross amount of loans closed,on 1-4 family houses. Conventional data are derived as a residual, although total recordings and VA and FHA loans uro not strictly comparable in concept or timing, 2f Three-month moving average, seasonally adjusted by Federal Reserve. Source: Federal Home Loan Bank Board, Federal Housing Administration and Veterans Administration. 1 Exhibit E H.Xlt Long-term Corporate and State and Local Government Security Offerings and Placements (In millions of dollars) New capital 1959 Corporate 1/ f 1958 1 January Februaxy March 81+0 7k5 631 1,553^ April May June 899 791 87k lylltO #7 887 July August September October November December 1st 2nd 3rd kth quarter quarter quarter quarter 1st half Three quarters Year S e/800 728 5°o 2,216 . 2,56k e/1,888 3,139 2,623 2,760 2,300 . >,780 e/6,668 5,762 8,522 10,823 1959 1,060 1,065 1,320 636 856 61*5 765 1,1*53 931 : 592 981 1,003 924 973 1# l,llk 862 518 920 1957 . 1,090 789 1,476 3,kk5 3,1149 2,899 2,951. 6,59k 9,k?3 12,W State and local 2/ 1 195b 1 1957 .m 812 71*2 572 506 798 895 551 765 51*6 393 566 •. 516 g/k88 806 1*03 651 529 581* 1*31 e/600 1*56 k7k 1*35 698 633 698 2,138 2,50k a/1,571 2,276 2,2l|l* 1,860 1,365 1,820 1*,520 3,52k 5,069 7,099 / 2/6,213 % 2,029 Excluding finance companies k/ 1st 2nd 3rd kth quarter quarter quarter quarter 2,011 . 2,109 e/1,588 Year 2,899 2,586 2,731 2,213 10,129 3,237 2,889 2,582 • 2,610 11,518 1/ Securities and Exchange Commission estimates of net proceeds. 2/ Investment Bankers Association of America estimates of principal amounts. 3/ Includes $718.3 million A T M convertible debenture issue. ti/ Total new capital issues excluding offerings of sales and consumer finance companies. Exhibit F H.Ik Other Security Offerings 1/ (In millions of dollars) Long-tern Foreign government 2/ Federal agency 3J~ 1959 I 1958 "1959 I 1950 I 19W 1957 81* 1*9 30 199 175 -- 139 198 120 123 1*8 1+2 __ 523 9 5 17 28 7 30 January February March 77 59 2 196 .53 April May June 56 50 1*2 73 1 July August September — . — 1,163 251 72 — 125 60 — 16k 98 215 — October November December 58 123 7k h 60 1 220 Year 992 507 2,321 100 — State and local government b/ — 572 Federal agency 3/ January February March 190 1*28 295 233 1*60 273 326 1*55 11*7 359 500 1*89 371 208 11*1* 638 1*30 505 April May 563 1*11 216 357 351* 261* 205 337 153 1*86 675 289 209 161 329 336 1*69 501 21*6 1*67 2/325 289 1*23 369 272 272 252 1*37 206 330 221* 370 512 231 1*15 21*3 & 1*51* 111* 137 1,238 255 116 July August September October November December Year 3,910 303 3,271* 727 365 665 3,098 5,543 p/ Preliminary. y Data presented in this exhibit differ from those in Exhibit E in that refunding issues, as well as new capital issues, are included. Long-term securities are defined as those maturing in more than one year. 2 j Includes securities offered in the United States by foreign governments and their subdivisions and by international organizations. Source: Securities and Exchange Commission. 2/ Issues not guaranteed by the U. S. Government. Source: long-term, Securities and Exchange Commission5 short-term, Federal Reserve. h/ Principally tax and bond anticipation notes, warrants or certificates and Public Housing Authority notes. In some instances PMA notes included may have a somewhat longer tern than one year. Source: Bond, Buyer. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Exhibit G H.l4 Large Long-term Public Security Issues for New Capital (Other than U. S. Treasury) 1/ Proceeds of Large Issues Offered (Millions of dollars) Corporate Month 1958 - September October November December 1959 - January February March April May June July August September State and local government Other 2/ 288 172 259 229 335 551 369 563 258 635 194 263 214 825 259 227 305 369 340 215 359 3)42 284 110 363 199 18 209 100 79 174 35 176 20 50 60 50 98 175 Large Individual Issues Offered October 1 through 23" Issuer CORPORATE Boston Edison Co. So. New England Tel. Co. Columbia Gas System, Inc. Northern Natural Gas Co. Boston Edison Co. Philadelphia Elec. Co. American Elec. Pwr. Co. So. Bell Tel. & Tel. Co. Texas Gas Transm. Corp. typo 3/ . Amount Coupon (millions rate or Offering Maturity of net inter- yield dollars) est cost 1st mtg. bds. 15.0 Corn. stk. 16.6 Deb. 25.0 Pfd. stk. 20.0 Com. stk. 15. 4 lstref .mtg.bds, 50.0 Com. stk. 55.5 Deb. 70.0 Pfd. stk. 15.0 Rating Aaa 1989 5 1/4 5.17 198k 5 3/8 5.38 : A 1989 5 1.93 Aaa 1994 5 1/2 5.35 Aaa STATE AND LOCAL GOVERNMENT Itev.-Ut, G.O. G.O. G.O. G.O. G.O. Port of New York Auth. Wayne Co., Mich. Denver, Colorado New York, New York State of New Hampshire Public Housing Authorities OTHER Montreal, Canada Ext.S.F.deb. 25.0 26.0 17.0 18.0 16.0 102.1 20.0 1989 it. 37 1962-68/65 4.08 1970-98 1960-74 1960-88 3.22 1960-2000 3.86 1979 5 5/8 4.31 A 3.50-4.00, A 3.25-3.75H/&a 3.00-3.70 A Aaa 2.60-3.35 Aaa 2.75-3.93 5.63 G-2 Footnotes 1/ Includes corporate and other security offerings of $15 million and over; State and local government security offerings of $10 million and over. 2/ Includes foreign government and International Bank for Reconstruction and Development issues and non-guaranteed issues by Federal agencies. 3/ In the case of State and local government securities, G. 0. denotes general obligations; Rev.-Ut., revenue obligations secured only by income from public utilities; Rev.-Q.Ut., revenue bonds secured only by revenue from quasi-utilities; Rev.-S.T., revenue bonds secured by revenue from specific taxes only; Rev.-Rent., revenue bonds secured solely b> lease payments,. ij/ Is of 1993 not reoffared. Exhibit H H.1U Forthcoming Large Long-term Public Security Offerings for New Capital (Other than U. S. Treasury) 3/ Expected Proceeds from Forthcoming Large Issues Subsequent to During month following date shown date shown State and State and Corporate Other 2/ Corporate Other 2/ local govt. local -govt. Date of computation - Sept. 30 Oct. 31 Nov. 28 Dec. 31 — Jan. 30 Feb. 27 Mar. 31 Apr. 30 May 29 June 30 July 31 Aug. 31 Sept. 30 • 113 20lt 301 210 270 198 396 2U6 287 165 238 198 37k . . 295 258 229 261 551 #2 55o 251 2h7 1U6 356 #5 270 216 326 ltOl 370 365 279 1*76 3h6 332 272 305 517 69k 71 75 hS 20 50 50 25 — 52k 675 683 515 856 1x81 761 517 761 500 1*06 I4O2 U70 71 75 h$ 20 50 50 25 Forthcoming Large Offerings, as of October 23 Type Amount Approximate date (millions of offering of dollars) CORPORATE Hilton Hotels Corp. Florida Power & Light Co. Puget Sound Power & Light Co. Northern Natural Gas Co. Central & South West Corp. American Telephone & Telegraph Co. *Transwestern Pipeline Co. Gulf States Utilities Co. -a-New York Electric & Gas Co. Sub. S . K deb. 1st mtg. bds. 1st mtg. bds. S.F. deb. Com. stk. Ueb. Sub. deb. & stk. 1st mtg. bds. Com. stk. 30.0 20.0 20.0 25.0 13.0 250.0 r #Public Service Electric & Gas Co. Commerce Oil Refining Corp. Sylvania Electric Products, Inc. American Educational Life Ins. Co. Com. stk. Deb., Dds. & com. S.F. deb. Com. stk. 25.0 1*5.0 liO.p 16.0 15.0 25.0 23.8 Oct. 27 Oct. 26 Oct. 29 Oct. 29 Oct. 30 Nov. 17 Nov. 16 Nov. 25 Dec. 7 (rights expire) Dec. Indefinite Indefinite Indefinite STATE AND LOCAL GOVERNMENT Consumers Public Power List., Neb. Los Angeles Flood Control Dist.,Cal. Baltimore Co., Md. Pennsylvania General State Auth. Rev.-Ut. G.O. G.O. Rev.-Rent. 23.3 21.2 20.0 25.0 Oct. Oct. Oct. Oct. 27 27 28 28 H.llj. H-2 Forthcoming Large Offerings, as of October 23 (Cont'd) Issuer Type Amount Approximate date (millions of offering of dollars) STATE AND LOCAL GOVERNMENT (Cont'd) State of Mississippi •H-State of New York -^Philadelphia, Pa. xLos Angeles Sch. Dist.9 California Columbus, Ohio Chesapeake Bay Feriy Commission G.O. G.O. G.O. G.O. G.O. Rev.-Ut. lli.O ,56.0 2k.8 21.5 10.0 190.0 Nov. 10 Nov. 18 Nov. 19 Dec. 1 Dec. 1 Indefinite OTHER None Included in table for first time. 1/ Includes corporate and other issues of $15 million and over; State and local government issues of $10 million and over, 2/ Includes foreign government and International Bank for Reconstruction and Development issues and non-guaranteed issues by Federal agencies. Note. —Deletions for reasons other than sale of issue: None. Exhibit I H.l4 Yields on New and Outstanding Electric Power Bonds, Rated Aa and A 1/ A-rated offering yields Aa-rated offering yields Amount above Amount above Actual Actual seasoned yields (per cent) (per cent) seasoned yields (basis points) (basis points) Date 1952 - 1958 High Low 5.00 (9/14/57) 2.93 (3/31/51) 1959 - Jan. 7 20 28 Feb. 18 Mar. 11 u 4.60 B 87 -3 4.6o 4.55$/ 22 21 7 1.95 1.95 38 34 5.oo 38 29 26 July 9 10 15 30 Aug. 5 20 Sept. 18 Oct. 23 4.67 18 4.85 5,06 17 13 5.13 27 4.92^ 5.10 5.10 24 19 4 15 1.95 23 11 9 9 13 29 May 1 13 11 20 21 26 June 4 17 k.lgJ 34 31 16 123 -15 ho 4.43 4.43 4.47 Apr, 5.50 (11/7/57) 3.00 (3/17/510 L93 31 4.85 4.80 24 22 4.95^ 16 6 5.10 19 13 5.65 60 5.oo 1/ Covers only 30-year first mortgage bonds, as reported in Moody's Bond Survey. Except where indicated, the actual yield figure and the amount above seasoned yields are averages of offerings during the indicated period and of the differences between these new offering yields and yields on seasoned issues of similar quality for the same day. Average maturity for the seasoned issues varies from 26 to 28 years. 2/ Provides for a 5-year period during which issue may not be called for refunding at a lower coupon rate. Other issues have no such provision. 2 / Provides for a 7-year period during'which issue may not be called for refunding at a lower coupon rate. ^ Exhibit J •KrlU Sources and Uses of Bunds by Life Insurance Companies (In millions of dollars) Cash U. S. Govt. ities 1957 - July Aug. \ Sept. Oct. Nov. Dec. -9 -30 hi -17 22 138 Value of Assets at End of Year 1,29k - Jan. Feb. Mar. Apr. May June July Aug. • Sept. Oct. Nov. Dec. of Assets id of Year - Jan. Feb. Mar. Apr. May June July Aug. Sept. -93 -51 20 -17 7k -20 20 -17 -19 52 123 Uses of Funds 1/ Busi-^ State and ness local govt. Mortsecurgages ities ities Ik 11 7 13 10 10 Total sources Other 163 195 151 170 132 237 87 77 93 6 110 7 2 , 37 7 35 , 271 13,206 221 106 277 208 135 19k 182 128 201 303 133 39% 51 10 23 13 28 35 " 2k 36 19 25 31 13 191 125 lltO 113 116 10k 123 110 139 186 11*6 303 5 -32 -32 13 -92 -181 324 163 198 2hU 212 258 7,026 142,13 3 171 15 -119 11 -70 k7 . 175 k2 7 12 25 -139 111 lilt 60 19 167 lltO 16 117 7lt 53 100 1# 58U 381 167 k29 39k k&9 652 3lt9 . 101 3l7 U50 500 570 lt76 lt39 560 187 879 1,365 7,205 la,615 2,685 37,097 lit,1*52 107,119 °3 280 -71 -185 22 -16 11 13 95 185 223 251 2k2 193 2k2 21k 75 59 30 66 k9 79 23 9k 30 111 1# 136 116 135 157 1/211, 171 - 1 7 It 108 80 97 60 1/208 101 726 lt38 362 185 198 —1*96 728 it9lt ^ 57 -lit -2k 10 3 -15 19 Ilk 1/ Uses of funds represent net changes in assets and therefore reflect net, rather than gross, uses. Source: Institute of Life Insurance. Exhibit K H.Ui Sources and Uses of Funds by Savings and Loan Associations (In millions of dollars) Cash 1957 - July Aug. Sept. Oct. Nov. Dec. Value of Assets at End of Year 19582/ - Jan. Feb. Mar. Apr. May July Aug. Sept. Oct. Nov. Bee. Value of Assets at End of Year 1 9 5 9 ^ Jan. Feb. Mar. Apr. May June July Aug. Sept. Uses of Funds 1/ U. S. MortGovt. gages 2/ ities -320 -103 11 -18 86 431 2,1246 1*07 460 357 416 278 253 -94 59 56 87 60 -5 3>173 40,01*9 19 It 247 335 398 528 582 533 557 57 4 605 465 532 a 2k 26 -5 23 -65 -119 173 209 116 38 177 -297 -70 -78 -108 44 338 2,569 Other assets .44 -19 -1 38 13 81 40 111 147 107 50 37 614 -37 37 47 16 10 125 123 151 79 103 59 -434 2,770 48,138 41,912 1,379 4,847 12 .8 10 102 100 -37 -80 9 1*2 . 131 102 -41* 131 409 553 654 679 803 1# 607 685 735 661 863 -377 -127 -89 113 -32 169 -39 '55 85 58 41 215 58 163 158 185 203 -303 173 199 160 176 143 -425 3,125 410 427 593 704 750 840 779 728 -53 80 92 153 181 6 296 97 79 106 23 -5 105 21 3k khO Sources of Funds Net change BorrowOther savings ing j / capital -52 252 324 361 378 923 3,821 45,599 -300 -26 1 -183 28 249 -444 -lib Total sources or uses -92 17 1*50 480 % 55,114 353 578 765 780 982 1,090 348 . 722 450 373 484, 356 508 937 62 353 440 501 477 1,073 47,926 434 408 529 420 604 1,090 190 V 394 1,451 -181 -57 -5. 98 63 313 31 118 5,737 100 227 241 262 315 -313 127 210 g/ Preliminary. \J Uses of funds represent net changes in assets and therefore reflect net, rather than> gross, uses. Savings and loan associations do not hold business securities and data on holdings of State and local government bonds, presumed to be small, are not available. 2/ 1957 data adjusted to include mortgage pledged shares as currently reported, V Advances from Home Loan Banks and other borrowing. Federal Savings and Loan Insurance Corporation. Digitized forSource: FRASER Exhibit L H.Ik Sources and Uses of Funds by Mutual Savings Banks (In millions of dollars) Cash U. S. Govt. ities 1957 - July Aug. Sept. Oct. Nov. Dec. -73 -1*2 27 -2k 6 125 Value of Assets at End of Year 890 1958 - Jan. Feb. Mar. Apr. . May June July Aug. Sept. . Oct. Nov. Dec. -60 63 36 -17 -5 Value of Assets at End of Year 1959 - J a n . ^ Feb. Mar. Apr. May July Aug. Sept. h2 -7 11 -17 -136 -136 -26 w1 7,552 -21 -85 -62 -36 -66 11 19 -5 18 v, -27 -8 * -92 -38 -32 101 -2 Uses of Funds 1/ State and Busilocal Mortgovt. Other gages securitiesi/ ities 62 61 55 60 -93 75 k,331 Sources of Funds Total sources or uses 7 -3 2 -3 7 -7 122 111 103 12k 100 111 -29 28 18 -1*1 38 -9 82 166 188 -20 108 299 16 90 206 3k 36 U05 66 76 -18 -5k 72 -106 682 20,951 761 35,166 31,695 3,k73 130 25 20 9 278 23k ll;9 336 93 160 86 86 23 k 97 t 6 ?8 $ k7 8 2 2 -3 -1 -7 165 15U 195 253 193 198 181 195 151 17k 5 -28 29 29 -1*6 k3 -3 26k 152 251 237 1*0 123 309 120 -2li 3k 8 3h -6 k "to 921 7,266 1,973 725 23,039 855 37,779 -96 18 kS -ill 8 k3 -79 3 119 39 62 -lilt 13 -85 -13 -12 -16 6 -31 58 -20 17 -k la -33 10 19 k -1 208 125 175 155 161 11*5 179 156 -58 32 38 -32 1*5 39 -12 33 175 216 330 -10 217 161 32 192 -1*7 13 Net. change in deposits 181 a 102 7 1 88 t 300 88 1U3 267 95 108 1*18 -109 U2 3k,ola 122 113 313 6 120 202 -51A 80 -30 -55 81 3,738 53 103 17 -16 97 -111 86 112 1/ Uses of funds represent net changes in assets and therefore reflect, net rather than gross, uses. 2/ Includes Canadian government and political subdivisions, International Bank for Reconstruction and Development, non-guaranteed Federal agency and other bonds as well as corporate bonds and stocks. y Adjusted to eliminate the effect of a consolidation of a large savings bank with a commercial bank. Digitized forSource.—Nat. FRASER Assoc. of Mutual Savings Banks and Federal Deposit Insurance Corp. October 26, 1959 Appendix 1 MONEY AND CAPITAL MARKET DEVELOPMENTS IN CANADA Yields on the Canadian money market and of Canadian bonds continued to decline last weeko The rate on the 91-day Treasury bill (at mid-September peak of *>#88 per cent) slid below $ per cent for the first time since the end of June. Other money market rates also fell fairly sharply. Several new provincial flotations met with a very good reception and prompted speculation that additional large secondary government issues would soon be attempted* Money market rates - Last Thursday's auction rate on 91-day bills fell for the fifth straight week to reach lj..93 per cent compared with 5*01 per cent the week before = The rate on 182-day bills also fell further, declining to 5>*36 per cent compared with £*5>1 per cent a week earlier. Last week8 s average closing rate on day-to-day loans fell very sharply to U»05 per cent compared to 1**63 per cent in the week ending October lU* Bond market developments - In addition to the $20 million City of Montreal issue sold in New York, two large provincial issues were floated in Canada last weeks a $£0 million Ontario issue split into 10 and 20 year maturities yielding 6 o 00 and 6*07 per cent, and a million Newfoundland, issue, placed privately and yielding 6*75 per cent. The Ontario issue was well received and sold at premiums of one-half to three-quarters of a point immediately after subscriptions were closed. The success of these flotations has created expectations of additional large provincial and municipal issues in the near future* Yields on medium- and long-term government bonds eased slightly further for the third consecutive week* At midweek, spreads between comparable Canadian and United States Government securities1 yields weret 0*83 0*87 0*85 1*19 1*09 per per per per per cent cent cent cent cent on on on on on 91-day bills 182-day bill* a 9-year bond a 20-year bond a 36-year bond Stock prices - Canadian stock prices, after drifting to lower levels early last week, made a modest recovery Thursday and Friday. At Friday's close, the industrial average on the Montreal exchange was 12 per cent below the year's high in July and one-third of one per cent above the close the week before* This was the fifth straight week during which the industrial average has remained almost unchanged* Appendix 1-2 Selected Government of Canada Security Yields Date 3-month Treasury billa*/ Intermediate Govt, bondj-/ Longterm Z h / Spread between Canadian & U.JS. rates long-term 3-mo* bonds/ billsz/ 195U-55 - Low 1957 - High 1958 - High Low 1959 - High Low 0.78 lt.08 3.65 0.87 6.16 3.25 2.81 U.81 Uc52 3.31 5.30 U.U5 3.13 U.35 • ZU2 3.78 5.30 U.U1 1.06 0.U7 2.96 0.30 Sept. 30 Oct. 7 lit 21 5.50 5.25 5.oi U.93 5.30 5.27 5.21 5.16 5.30 5.28 5.18 5.16 1.17 1.18 1.11 1.19 1.5U 1.2U Qo75 0.83 , Discount on 3-mo. Canadian dollars/ 1.66 2.19 1.66 1.66 1/ Average yield at weekly tender on Thursday following Wednesday date shown. y Government of Canada 2=3A per cent of June 1$, 1967-68» 5/ Government of Canada 3 - l A per cent of 1979» 5/ UoSo Government 3-l/U per cent of 1978-83• Government of Canada 3-l/U per cent of 1979. £/ Spread between average auction ratesx on Monday preceding Wednesday date shown for the United States) on Thursday following Wednesday date shown for Canada* 6/ Spread between 3-months forward and spot price of the Canadian dollar, expressed as per cent per annum, on Friday following Wednesday date shown* Distribution of Government of Canada Marketable Debt (millions of Canadian dollars, par value) Date Bank of Canada Govt. accounts Chartered banks General public Total 1957 - Sept. 30 Dec. 31 2,L12 2,463 1,381 1,367 2,623 2,6kl 6,133 6,045 12,549 12,516 1958 - Mar. 31 June 30 Sept. 30 Dec. 31 2,438 2,571 2,747 2,670 1,287 1,129 1,221 1,258 2,855 3,333 3,892 3,520 6,134 5,999 5,563 6,073 12,714 13,032 13,423 13,5a 1959 - Mar. 31 June 30 Sept. 30 Oct. 21 2,601 2,677 2,726 2,685 9hh 3,519 3,174 2,834 2,740 6,642 7,166 7,466 7,647 13,706 14,024 14,015 14,016 Source: 1,007 989 9bk Bank ot Canada Statistical Summary<> Not available« Average term of general public holdings Years Mos. 10 7 8 lb 13 11 10 U 12 11 H (n.a.)