View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

Not for Publication
k.lk

mm SIX
y

March 28, i960

CAPITAL HA.RKBT*BSV^PMENTS
IN~TEIT UNITED"STATE^lNE CANADA
Part I - United States
No large corporate or State and local government issues were
offered to the public during the week ending March 25. The calendar
for this week includes corporate issues totaling $91 million and State
and local government bond issues with total proceeds of $35 million.
A &150 million long-term Federal National Mortgage Association issue
is also scheduled for sale this week.
Bond yields - Yields continued to decline last week for all
categories of outstanding bonds, reaching the lowest level this year.
FNMA secondary market operations - Secondary market offerings
to FNMA and FNMA mortgage purchases continued at advanced levels during
February, with purchases the largest in nearly two years.
April security volume - New public security financing for
both corporations and State and local governments is expected to continue moderate in April. The volume of corporate security financing
is estimated at $725 million, slightly below the volume in March and
one-fifth smaller than in April last year. Large public issues are
expected to total about $300 million.
State and local government bond sales are expected to total
$600 million in April, including a $100 million issue by Triborough
Bridge and Tunnel Authority which is expected to be sold by negotiation.
This volume would be one-eighth larger than the March total, but more
than one-third below the large volume of April 1959.
Stock prices - Stock prices increased last week. Standard
and Poor's index of 500 common stocks closed at 55.98 on March 25, 2
per cent higher than a week earlier. Trading activity increased
slightly with daily volume averaging 2.7 million shares.
More detailed information concerning recent capital market
developments is presented in the attached exhibits.
Developments in the Canadian capital markets are presented
in'Part II at the end of this report.
Capital Markets' Section,
Division of Kesearch and Statistics,
Board of Governors of the Federal Reserve System.




.

• jxhibit a
HIGH-GRADE

BOND

YIELDS

\ • f

l\ /
A

LOWER-GRADE

BOND

YIELDS




/Vf

U.S. GOVERNMENT

ln-em
oglr

.

11.14

V

"3~

Exhibit B - Tables for Exhibit A
High-grade Bond Yields

Date

State and
local govt.
Aaa 3/

U. S. Govt,
long-term 2/

Corporate
Aaa 1/

Spread between
U. S. Govt, and
State and
Corporate
Aaa
local Aaa

(Per cent)
1954 - Low
195/ - High
1958
1959 - High
Low
i960 - High
LoW
Feb.
Mar.
Har.
Mar.
Mar.

264
11
18
25 pj

(4/23)
(9/27) '
(5/2)
(12/31)
(1/9)
(1/29)
(3/25)

4.54
4.54
4.51
4.48
4.46

2.45(8/6)
3/76 (10/18)
3.07 (4/25)
i . 37 (12/31)
t
3.83 (1/2)
4.42 (1/8)
4.00 (3/25)

1.90 (9/2)
3.45 (8/29)
2.64 (5/1)
3.65 (9/24)_
3.06 (3/26)
3,53 (1/7)
3-32(3/24)

.30
.60
.22
.50
-16
.46
.19

4.22
4.22
4.11
4. 05
A.co

2.85
4.14
3.55
It. 61
4.09
4.61
4.46

3.39
3.40
3.37"
3.35
3.32

.32
•33.
.40
.43
.46

•

.30
.47
.34
.92
.53
.69
.68
.83
.82
.74
.70

Lower-grade Bond Yields

Date

Corporate
Baa 1/

State and
local govt.
Baa 3/

r

Spraac

|Corporate

|^S

r. ..
. .

(Per cent)
1954 - Low
• 1957 - High
1958 - Low
1959 - High
Low
i960 - Kirh
Lew

3,44 (12/31)
5.10 (11/29)
4.51 (7/11)
5.32 (12/31)
4.83 (4/17)
5.36 (2/12)
5.22 (3/25)

2.93
4.51
3.64
4.46
3.92
4.46
4.26

Fob. 26
I " r. 4
a
11
r. 15
25 V

5.31
5.31
5.28
5.26
5.22

4.32
4.35
4.31
4.29
4.26

(8/5)
(8/29)
(5/D
(7/2)
(3/26)
(1/7)
(3/24)

-

-52
1.2?
.77
.77'
.56

.96
1.21
.93
-98.
.79

' .71

-95

.77
.?c
. / -77
.73
.76

.

.93
.95
.94
M.94

.

0/ P c i i - r .
rluniy
t : ' l ' v r ^tifc::l fibres. A c - ~ tcra of bonds included is 25-20 y ~ * .
!o:yajc
...v
v:ao
..c
2/
:v;:c of c.lly f c r : . Vh: Lories includes bonds d o c- c l r b o i . 10 >--r_ 0- r : ;
.c-.o
x u.
u : al.l r
o-.
3/ Thursday florae. Only C r : c i cblic-iion bonds rr Inoludcd; cvr.o t » = is 20 yoars.
o.r.
.o
.cr~ : "
T o i . H ^ a a. l r c arc f r individ a c r o a. ta b on d f e e t dates for different series.
: - o — i h rd o :
c
u l c i c rd ny o
ifrn




STOCK

MARKET

1957
FEDERAL

1958

NATIONAL

SECONDARY

MARKET

MORTGAGE
OPERATIONS

/

PURCHASES




1959
ASSOCIATION

1960 ~

Exhibit D - Tables i o Exhibit C
'r

-5-

Stock Market
Stock price
indox 1/

1957-59
I960

- High

Common
stock
yields 2/
(per cent)

Trading
Stock maiket customer credit
volume 2/
Customers1
Bank
(millions
debit bal- loans to
of shares)
ances 4/ "others" iz
(Millions of dollars)

60.51

2,482

3.18

3.6

4,365

3,198

1,167

54.21;

3.51

2.6

4,274

3,129

1,145

58.03

January
February
Mar. 1 1
Mar. 1 8
Mar. 2 5 fiZ

3,554

59.50

Low

3,401

4.66

4.3
l.ii

4,764

39.78

Low

- High

-3.28

1,167

3.2

1,365

3,198

5k. 2L

3.38

3.0

4,274

3,129

3.51

3.2

55.01

3.a

2.6

55.98

3.1*0

2.7

1,373
1,060

55.69

n.a.
n.a.
n.a.

1,145

n.a.
n.a.
n.a.

1,130
1,128

n.a.

n.a.--Not available.
g/ Preliminary.
1/ Standard and Poor's Tmposite index of 500 common stocks, weekly closing prices, 1941-43=10. Monthly data
are averages of dally figures rather than of Fridaya1 only. Hiyha 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 Exoluinge.
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. Occludes 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 banks account for about 70 par cent of loans to others. For further detail see BuilotIn.
Federal National Mortgage Association
E s t i m a t e d O f f erinp.3 t o
Date

Total

Immediate
purchase

Secondary

FN MA
Standby
commitment

(Millions
1959

- Feb.
Mar.
Apr.
May

Market Operations 1/
Sales

Purcliasos
by.

by

l'lirn

PNMA

ol' d o l l a r s )

27.6

49.8

3.2
2.6

36.5

57.8

50.1

. 7.7

39.6

k

73.4
76.6

7.2

38.3

44.4
52.4

41.2

80.6

"e
1.1

June

84.

7.8

49.4

•c

July

109.5

92.5

17.1

62.3

• 3

Aug.

123.1

109.9

13.3

71.7

134.8

101.8

6.5

85.4

6.5

100.3

5.3

92.6

111.4

4.9

92.2

137.9

128.6

135.5

128.6"

9.3
6.9

116.7

lla.3
108.3

Nov.

105.6

Dec.

116.3

i960 - Jan.
Feb.

.3

105.5

Sept.
Oct.

'

86.1

•fei t n $ 0 0 0
—,>n h n 5 , 0 .
1/ D t . r p o e t u p . d p i c p l b l n e o t e mrR..n i v l e , e c u i e o p e i m ,
v o e r o n . n i l r n i a n n c s f h otnrn n o v d x l s v f r m u s
d n o n o o o h r or.go O f r n s a e n o n a o a p l n l n r c l n d r n t e p r o f o
l c u t , r t e hire. f e i g r w u t f p l o t o o o e v d u i g h o l d r m
n l o n p o o i g that n i e e u e n r h v n i e n r n n A I m d a e p r h n c n r c c v r
olr rpnn
nA x o t uoilf o t n t . n m e i t u o a e o t a t o o e
e l t n . m r « ,fd w i h t e n l o m « d l v r t F M w t i 45 d y . A a a d y o m t e t c n
z n i r o t n ;i h c h t l r u t e i e o N A i h n
an
t n b c m i m n ot a t r l t n t p o o e mrrpol o h u i g n t y t u d r e n t u t o , " i h t e s l e m n
r c o n n o r p n d oty.f, n o s n o e n e o r v c l n h o h e l r i t
u v l y d l v r w t i o e your. P r h n n I c u e t o e u d r b t I m U f t p r h s a d r t n b
iol eie ihn n
u e n o n l d h o n e o h m o i t n u c a e n rady
o-mtnr o i n t l
orlmit n - n f .
U1
\soac
FRASER nrtgrams. Data cvclvde F1A activity under Special . s l t n * and Management and
Lqiaig Po
iudtn

Digitized for


Exhibit E
Long-term Corporate and State and Local Government
Security Offerings and Placements
(In millions of dollars)

I960
January
February
Maich

New capital
Corporate 1/
State and local 2/
I960
1
1959
1
1958
1
1959
1
1958
840
745
631

1,55^

899
791
874

i,i4o
597
887

July
August
September

531
718
.709

October
November
December

887
862
936

862
518
920

2,216
2,564
1,958
2,688

3,139
2,623
2,760
2,300

L,780
6,738
9,427

5:8

g/728

1,107
54o
l,llk

April
May
June

1st
2nd
3rd
4th

quarter
quarter
quarter
quarter

e/&06
e/7.50
e/725

S/1.9U6

1st half
Three quarters
Year

728

10,823

638
858

fis
&/6oo

646
.

931

593
1,006

812
953
511
798
895
551

IS
468

806
403
651 '

593
513

456
474
435

g/hkk
e/1,803

2,142 .
2,531
1,549

2,276
2,244
1,860

e/I,55O

1,365

4,67]
6,223
2/7,773

4,520
6,380
7,746

Excluding finance companies 4/
1st
2nd
3rd
4th

quarter
quarter
quarter
quarter

Year

2,011
2,1*09
1,695
2,549

2,899
2,586
2,731
2,213

8,665

10,429

1/ Securities and Exchange Commission estimates of net proceeds.
2/ Investment Bankers Association of America estimates of principal amounts.
3/ Includes $718.3 million AT&T convertible debenture issue.
U/ Total aew capital tissues excluding offerings of sales and consumer finance
companies.




H.lU

Exhibit F
Other Security Offerings 1/
(In millions of dollars)
Long-tern
Foreign government 2/
Federal agency j
M
| 1959
I960
| 1959
1 1958
I960
1

January
February
March

77
59
2

196
53

April
May
June

56
50
h2

139
198
120

July
August
September

85
1
36

9
5
17

33
h2
70

58
123
7h

558

992

October
November
December
Year

182

175

190
128
295

233
16
*0
273

April
May
June

563
111
215

July
August
September
October
November
December

196

Year

1958
1,163
251
523

—

—

16U

98
150

—

220
86
707

Short-term
State and local government k/
January
February
March

199

—

2,321

Federal agency 3/
359
500
L89

371
208
li
lU

357
.351
26h

186
675
289

209
161
329

2i
l6
467
399

289
12
*3
369

727
365
665

137
206
330

235
3h3
358

? 31
hlS
2h3

733
U71
288

hSh
llh
137

it,179

3,910

6,01*7

3,098

U79
U63

EZ Preliminary.
y Data presented in this exhibit differ from those In Exhibit E In that refunding issuns, an well as n<sw
capital issues, are included. Long-term securities are defined as those maturing in more than one year.
2/ Includes securities offered in the United States by foreign governments and their subdivisions.and by
international organizations. Source: Securities and Exchange Commission.
3/ Issues not guaranteed by the U. ,S. Goveriwer.l. Source: long-term, Securities and Exchange Commission;
short-term, Federal Reserve.
4/ Principally tax and bond anticipation not*s, warrants or certificates ard Public Housing Authority
not**. In some Instances PHA rotes included may have a come what longer tern than one year. Source: Pond Buyer.




Exhibit G
Large Long-term Public Security Issues for New Capital
(Other than U. S. Treasury) 1/
Proceeds of Large Issues Offered
(Millions of dollars)

Month

Corporate

1959 - February
March
April
May

State and
local government

3U0
215
359
3U2
281+
110
363
199

July
August
September
October
November
December
i960 - January
February

551

35
176
20
50
60
50
98175
20

3#

563
258
635
19it

263
211

ilOO

'

Other 2/

29k

U21
230

163
217
388
283

279

262

.

70
100
320

Large Individual Issues Offered March 1 through 25

Type 3/

Amount
Coupon
(millions
rate or Offering
Maturity
of
net inter- yield
est cost
dollars)

Rating

-

• CORPORATE

States Steamship Co.
Ins. bds.
Imperial Investment Co.,
Ltd.
Coll.tr.bdst .
Coastal Sts. Gas Prod. Co.
S.F. deb.
Gen. Motors Accept. Corp.
Deb.
Gen. Tel. Co. of Fla.
1st mtg. bds.
Chesapeake & Potomac Tel.
Co. of V . Va.
J
Deb.
No. Ind. Pub. Sv. Co.
1st mtg. bds.
Gen. Tel. & Electron. Coxp. Com. stk.
Genesco, Inc.
Com. stk.

20.2

1981

5

5.00

Aaa

. 15.0
20.0
100.0
15.0

1980
I960
1981
1990

6-1/2
6
5
5

6.50
6.00

——

5.05

A

25.0
15.0
57.1
16.8

2000
1990

5
4-7/8

U.88
U.73

Aaa
Aa

18.0
19.2

1961-85
1999/63

5.oh

Ba

STATE AND LOCAL GOVERNMENT
Grand Rapids Expressway,
Mich.
Dade Co. Port Auth., Fla.

Rev.-S.T.
Rev.-Ut.




U.12
U.73

3.00-L15
U.67

A

h.lii

G-2

-9-

Large Individual Issues Offered March 1 through 25 (Cont'd)

Issuer

Type y

Amount
(millions
of
dollars)

|
teturlt

y

Coupon

n^nter1 est cost

Offering
Rating
yield

STATE AND LOCAL GOVERNMENT
(Cont'd)
State of Louisiana
Cook Co., Illinois
State of Delaware
State of California

G.O.
Rev.-S.T.
G.O.
G.O.

15.0 1961-8 It/69
25.0
1961-70
12.a
1961-80
100.0 1 9 6 1 - 8 6 / 8 0 , 8 1

2.80-3.80

3.80
3.aa
3.25
3.95

2.60-3.30
2.90-3.95

1965-90 5-5-1/8
1961-80
5

5.00-5.15
a.75-5.15

2.80-3.a5

A
A
Aa
Aa

OTHER
Metropolitan Toronto,Can. S.F. deb.
Instal. deb.

34.5
6.9

IT
A

1/ Includes corporate and other security offerings of $15 million and over3
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.
2/ In the case of State and local government securities, G.O. 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.-Kent.,
revenue bonds secured solely by lease payments.




Exhibit H

-10-

Forthcoming Large Long-term Public Security Offerings for New Capital
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues

computation

1959 - Feb. 27
Mar. 31
Apr. 30
May 29
June 30
July 31
Aug. 31
Sept. 30
Oct. 30
Nov. 30
Dec. 31
I960 - Jan. 29
Feb. 29
Mar. 31

During month following
Subsequent to
date shown
date shown
State and
State and
Corporate
Other 2/ Corporate
Other 2/
local govt.
local govt.
198
396
2l|6
287
165
238
198
37U
385
226
210
207
301
299

2 92
550
25h
2h7
lli6
356
385
270
115
295
hh$
210
255
250

279
476
316
332
272
305
517
691
509
271
280
252
372
3hh

20
50
50
25
70
30
15
*
35

181
761
517
761
500
106
h02
170
336
1*85
51*5
310
385
280

20
50
50
25
70
30
hS
35
—

Forthcoming Large Offerings, as of March 25
Type

Amount Approximate date
(millions
of offering
of dollars)

CORPORATE
Louisiana Power & Light Co.
Niagara Mohawk Power Co.
Mid-American Pipeline Co.
Carolina Power
Light Co.
Commonwealth Edison Co.
Alabama Power Co.
National Fuel Gas Co.
Kratter Corp.
Mountain States-Tel. & Tel. Co.
Iowa-Illinois Gas & Electric Co.
, United States Plywood Corp.
-Transcontinental Gas Pipeline Co.
Puget Sound Power & Light Co.
Metropolitan Edison Co.
^Cincinnati Gas & Electric Co.
Commerce Oil Refining Corp.




1st mtg. bds.
Gen. mtg. bds.
Sub. deb. & stk.
1st mtg. bds.
1st mtg. bds.
1st mtg. bds.
S.F. deb.
Pfd. stk.

20.0
50.0
20.5
25.0
30.0
19.5
18.0
26.0

Deb.
1st mtg. bds.
S.F. deb.
1st mtg. bds.
1st mtg. bds.
1st mtg. bds.
1st mtg. bds.
Deb.. bds. & com.

1*0.0
15.0

25.0

35.0
20.0

15.0

30.0
L5.o

Mar.
Mar.
Mar.
Apr.
Apr.

29
30
31
6
7

Apr. 8

Apr. 12
Apr. 12
(rights expire)
Apr. 13
Apr. Ik
Apr. lh
Apr. 21
Apr. 21
Apr. 27
Apr. 29
Indefinite

H.li;

-11-

H-2
Forthcoming Large Offerings, as of March 25 (Cont'd)
Type

Amount
(millions Approximate date
of dollars) of offering

STATE AND LOCAL GOVERNMENT
*Los Angeles Flood Cont. Dist.,Calif.
Chicago Board of Education, 111.
• - t t Public School Bldg. Auth*, Pa.
KSae
Triborough Bridge & Tunnel Auth.
---Philadelphia, Pa.
Cleveland, Ohio
Los Angeles City Sch. Dists., Calif.
-xState of Tennessee
New York City Hsg. Auth., New York
Sacramento Mun. Ut. Dist., Calif.
Ventura Port Dist., Calif.
Jacksonville, Fla.

G.O.
G.O.
G.O.
Rev.-Ut.
G.O.
G.O.
G.O.
G.O.
G.O.
Rev.
Rev.-Ut.
Rev.-Ut.

10.0
25.0
16.0
100.0
29.3
13.3
16.0
15.0
20.5
30.0
10.0
30.0

Mar..29
Mar. 30
Apr. 6
Apr. 19
Apr. 20
Apr. 26
Apr. 26
Apr. 27
Apr. 27
Apr. 28
Apr.
May 10

Deb.

i5o.o

Mar. 29

OTHER
-^Federal National Mortgage Assoc.

*—Included in table for first -ime.
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
Yields on New and Outstanding
Electric Power Bonds, Rated Aa and A 1/

—12—

Date

1952 - 1958
High
Low
1959 - January
February
March
April
May
June
July 9
10
15
30
Aug. 5
20
Sept. 18
Oct. 22
23
28
29
30
Nov. 25
Dec. 8
9
10
1960 - Jan. 7
Feb. 25
26
Mar. 15
16
18

Aa-rated offering yields
A-rated offering yields
Amount above
Amount above
Actual
% Actual
seasoned yields
seasoned yields
(per cent)
(per cent)
(basis points)
(basis points)

a

5.00 (9/11/57)
2.93 (3/31/51)

87
-3

3

l

U.97
*a.95

10
17
37
29

U.93

31

4.85
U.80
L95S/
5.15
5.15

5.08
5.30

5.08
5.10

h2
k2
63

kh

k6
32
17

123
-15

*lt.75^/

23

*4.67

18
25
15
19

5.10
5.00

19
13

5.65

60

5.25

510
.*

35
50

5.15
S.kh z
5.3oi/

51
50
28

%k
22
I6
1
16
ho

5.50 (11/7/57)
3.00 (3/17/54)

1:2b/
5.10

5.oo

*—Single observation, not an average.
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. Monthly averages so marked include one or
more issues with such a provision. Other issues have no such provision.
3/ Includes one issue which provides for a 7-year period during which the
issue may not be called for refunding at a lower coupon rate.




March 28, I960

-13-

Fart II - Canada
Canadian short money rates declined substantially during the
week to the lowest levels since early 1959* Rising bond prices brought
modest reductions in intermediate bond yields. Stock prices on the Toronto
and Montreal exchanges showed some recovery during the week.
Money market conditions. For the seventh straight week, the short
Treasury bill yield declined by 61 basis points from U.02 per cent the
previous week to 3»Ul per cent at last Thursday's tender. During the week,
the Bank of Canada increased its bill holdings by SU3 million and the
chartered banks increased their holdings by $9 million3 on the other side,
the public reduced its holdings by $32 million. The yield on the 6-month
bill declined from U.26 per cent a week earlier to 3.65 per cent on Thursday.
The rate on day-to-day loans eased from L per cent to 3-1/2 per, cent at
last Wednesday's closing.
The sharp drop in the 3-month bill rate slightly reduced the
spread between Canadian and United States bill yields from 0.£8 per cent
a week ago to 0.55 per cent on March 2U (see Table). However, the discount
on the forward Canadian dollar declined from 0.U8 per cent per annum to
0.2U per cent per annum. As a result, a slight incentive in favor of z
the Canadian bill emerged last Thursday.
Bond market developments. Canadian bond yields declined during
the week for all issues except the 35-year bond which rose slightly.
The spreads between comparable Canadian and United States securities
(Thursday yields for bills and Wednesday closing yields for bonds) were
as follows (figures in parenthesis refer to the previous week):
0.55 per
0.53 per
1.11 per
1.20 per
1.61 per

cent
cent
cent
cent
cent

on
on
on
on
on

a 91-day bill (0.58)
a 182-day bill (0.70)
an 8-year bond (0.98)
a 20-year bond (1.22)
a 35-year bond (1.5U)

Press reports state that the Province of Nova Scotia plan to
borrow $10 million in the United States in mid-April on a 20-year debenture.
Budget outlook. The Canadian Tax Foundation, a nongovernmental
organization, has estimated that the Government's deficit would be about
$U00 million in the fiscal year I960 which ends on March 30 (i960);
with no change in taxes, the Government's budget for the coming fiscal
year 1961 would be almost in balance, or with a deficit of only about
$50 million. This, calculation is based upon the Main Estimates of
expenditures tabled in Parliament earlier this month. It shows a 3 per
cent increase in expenditures and a 19 per cent increase in revenues,
resulting largely from higher levels of economic activity.




—

ill—

Stock markets. Prices of Canadian industrial stocks continued
their recovery during the past week from early-March lows, as may be seen
in the following comparison of prices on March 8 and March 2U:
March 8
Toronto industrials
Montreal industrials
New York - Standard and
Poors industrials

March 2U

U76.58
277.2 h'

U93.6U
282.U

57.00

59,77

Newspaper specialists comment that the decline in Canadian stock,
prices during the early months of I960 is more than likely an adjustment
caused by initial enthusiastic predictions for the first half of I960
which are now being painfully revised downward. The press also comments
that stock yields in Canada are higher than they were in May 1958, while
the boom on the European markets has reduced yields there to record lows.
Canadian observers expect that international investors will show a greater
interest in Canadian equities.
During 1959, about four-fifths of the total trading in shares
in Canada took place on the Toronto Exchange, according to the March 21
issue of Investment Dealers1 Digest. Total transactions on the Toronto
Exchange exceeded 763 million shares. The combined Montreal exchanges
accounted for about 15 per cent. In value terms, the Toronto Exchange
handled 66 per cent of total trading and the Montreal exchanges about
32-1/2 per cent.

1j Quotation for March 10.

British Commonwealth Section
Division of International Finance
Board of Governors, of the Federal Reserve System




-15Selected Government of Canada Security Yields
3-month
Treasury
bills]!/

Date
1957 0 High
1958 » Low
1959 - High
Low
I960 - High
Low

Intermediate

Uo08

Longterm
Govt. f
bonds/

Spread between
Canadian & U.S. rates
long-term.
3-mo*t
bon<5/
billsZ/

1.35
3.78

0.87

iio8l
3-31

6.16

5.30'

5.30
kohl

U.5
.U
5.55
5.28

5.L2

0.L7
1.22

5.2U

0.91

k.57

10
17
2h

2.96
0.30
0.90
0.31

1.19

3.25
5olU
Uo3h

Mar. 3

5.37
5.28
5.20
5.19

5.36
5.36
5.29
5.21

1.19
1.21

Uo3U
Uo02
3.U1

f

Discount
on 3-mo.
Canadian
dollar®/

1.22

0.72
0.2U

o.58

0.30
0.U8
0.U8

0.55

0.21*

0.59

:

1.20

0.68

Average yield at weekly tender on Thursday.
Government of Canada 2-3/k per cent of Jane 15, 1967-68*
Government of Canada 3-1/1* per cent of 1979*
g/ U.S. Government 3-1/U per cent of 1978-83. Government of Canada 3-1/4 per
cent of 1979• Bond prices are Wednesday closing quotations.
Spread between Canadian auction rate and composite market yield for the
U.S. bill on the close of business on Thursday.
6/ Spread between 3-oonths forward and spot price of the Canadian dollar,
expressed as per cent per annum, on Thursday,
Canada and the United States: Prices of Industrial Stocks
and Customers Debit Balances
Industrial stock prices
Canada
U
MontStandard
D.B.S.1/ Toronto
real
and Poors
1959 - High
Low
I960 - Jan.

Feb.

286.2

61.2

257 .U

58.3
62.3

267.6
257.9

Week ending
Feb. 5
12
19
26

Customers' debit
balances£/
Canada
U.S.

503.08

298.9

55.8

512.78

305.0
301.2
293.7

173

1#
158

3,388
3,210
3,198

60.2

-

*

506.25

198.39

59.1

59.1
60.0
290.9
288.8
Mar. U
59.2
11
281.3
57 iU
18
281.3
58.5
1/ Dominion Bureau of Statistics index is calculated from Toronto and Montreal
exchange quotations»
2/ In millions of local currency.
Source % Bank of Canada Statistical Summary and Canadian, daily newspapers•




U9U.91
U90.5U
U78.73
U85.81


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102