8 June 2012

Three new interest bearing securities have been launched recently – by Heritage Bank, Tatts Group and Seek Limited (the web-based jobs search site). While we do not think that any of these three issues are necessarily attractive from an investor’s viewpoint, the new issuance is none the less pleasing. Whites IFM is a strong supporter of the listed income securities market as we believe it offers investors a welcome diversification away from the equities and property markets. Australia has lagged the other developed financial markets – especially the US – in the promotion of a bona fide debt market accessible to retail investors.

There are now more than 60  income securities listed on the ASX which is starting to give the market some momentum. The Commonwealth Government has stated it will issue a listed retail government bond by the end of 2012 which will give further impetus to this market. Traditionally the finance sector (banks and insurance companies) have been the mainstay of the Australian income securities sector so the addition of new corporate entrants such as Tatts and Seek is welcome.

Clients of Whites IFM can access our recommended list for income securities where we take account of the relative merits of the various securities on offer.