PwC Capital Markets Flash

Volume 3, Issue 4: February 25, 2010

In this issue:

Let the games begin?

This week, in conjunction with PwC’s sponsorship of the Prospectors and Developers Association of Canada convention, we are pleased to bring you our special mining industry briefing.

Before we delve into the details, we briefly turn to market activity. Since our last Flash, equity and credit markets have trended upward, seemingly immune to recent weak economic data and continued sovereign debt concerns. M&A and capital raising activity continued at a healthy pace with a number of notable IPOs and M&A deals announced this week.

208 KB PwC Capital Markets Flash — February 25, 2010 (208 KB)
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Feb 11, 2010 Crisis Extreme Sept 1, 2008 Pre-Crisis Extreme1 Movement since Dec 10, 2009
CDN$ / US$
$0.944 $0.771 $0.936 $1.091 up green
S&P 500
1,103 677 1,278 1,565 up green
S&P / TSX
11,631 7,567 13,300 15,073 up green
LIBOR2
0.25% 4.82% 2.81% 1.11% --
TED Spread3
0.14% 4.64% 1.10% 0.14% down green
OIS Spread
0.15% 1.85% 0.47% 0.14% down green
S&P / LSTA4
1,453 895 1,293 1,335 up green
CBOE VIX5
20 81 21 10 down green
Baltic Dry Index6
2,707 663 6,691 11,793 up green
WTI Crude Oil7
$77.92 $33.87 $111.55 $146.85 up green

Notes:

  1. Over five-year period.
  2. BBA US LIBOR, three month.
  3. Difference between rates on interbank loans and three month US Treasuries. Indicator of perceived credit risk.
  4. Mirrors market weighted performance of leveraged loans. Tracks returns in leveraged loan market.
  5. An expectation of the market's 30-day volatility, measured by tracking the money calls on companies in the S&P 500. Historically, VIX values greater than 30 are associated with high volatility and values below 20 are associated with low volatility.
  6. An indicator that predicts future economic activity by measuring global shipping supply and demand for commodities, such as building materials and coal.
  7. West Texas Intermediate (WTI), also known as Texas Light Sweet, is a type of crude oil used as a benchmark in oil pricing and the underlying commodity of New York Mercantile Exchange's oil futures contracts.

All dollar amounts are expressed in US dollars, unless otherwise indicated.

Sources: Bloomberg, Capital IQ, TMX Group, The TMX MiG Report, Gamah International, The Financial Post, Toronto Dominion Bank, Scotiabank, TD Securities, National Bank, Moodys, The Gartman Letter, Financial Week, Barrons, The Globe and Mail, National Post, mergermarket, Telephony, PR newswire, Canada Stockwatch, Wall Street Journal, New York Times, FT Alphaville, The Daily Telegraph, The Associated Press, Marketwatch, The Washington Post, BMO Capital Markets, CIBC World Markets - Economics, The Economist, International Trade Suite, Seeking Alpha, TD Newcrest, J), Zero Hedge, Standard and Poors, Reuters Loan Connector, The Economist, Business Standard, RBC Capital Markets, International Monetary Fund, Conference Board of Canada, Torys LLP, William Blair & Company LLC, Financial Times.