The Australian Economy and Financial Markets Chart Pack January 2015 The Australian Economy and Financial Markets Contents Graphs World Economy Australian GDP Growth and Inflation Household Sector Business Sector Credit and Money Factors of Production and Labour Market Regions and Industry Government Commodity Prices Balance of Payments and External Position Interest Rates Share Markets Bond Issuance Equity Raisings and Business Financing Exchange Rates Banking Indicators 1–3 4 5–6 7–8 9 10–11 12–13 14 15 16–17 18–22 23–24 25 26 27–28 29–30 World Economy GDP Growth – China and India GDP Growth – World Year-ended % % Major trading partners* 6 4 Year-ended % China 6 4 World** 2 2 0 0 -2 -2 % 10 10 India* -4 2002 2005 2008 2011 2014 -4 5 5 0 2002 2005 * Weighted using Australian export shares * ** PPP-weighted; accounts for 87 per cent of world GDP Sources: CEIC Data; RBA 2008 2011 2014 0 GDP at factor cost Sources: ABS; CEIC Data; IMF; RBA; Thomson Reuters GDP Growth – Advanced Economies Year-ended % US 4 Euro area GDP Growth – East Asia % % 4 10 Year-ended % 10 Middle-income* 0 0 5 5 -4 0 0 Japan -4 High-income** -8 -12 2002 Source: 2005 Thomson Reuters 2008 2011 2014 -8 -5 -12 -10 -5 2002 2005 2008 2011 * Indonesia, Malaysia, Philippines and Thailand; PPP-weighted ** Hong Kong, Singapore, South Korea and Taiwan; PPP-weighted 2014 -10 Sources: CEIC Data; IMF; RBA Chart Pack | January 2015 1 World Economy Inflation – China and India Core Inflation* – Advanced Economies Year-ended % % US** 2 2 1 Year-ended % % India CPI 8 8 India WPI 1 4 Euro area 0 4 0 Japan -1 -1 -2 2002 * ** 2005 2008 2011 2014 -2 0 -4 2002 2005 % 2014 -4 Inflation – East Asia % Year-ended % Euro area 10 US 6 8 8 4 4 6 Japan 2002 % Middle-income* 10 Source: 2011 Thomson Reuters Unemployment Rate – Advanced Economies 2 2008 Sources: CEIC Data; RBA Excluding food and energy, and for the euro area also excluding alcohol and tobacco Core price index for personal consumption expenditures Source: 0 China CPI 2005 Thomson Reuters 2008 High-income** 0 2011 2014 0 2 -4 2002 2005 2008 2011 * Indonesia, Malaysia, Philippines and Thailand; PPP-weighted ** Hong Kong, Singapore, South Korea and Taiwan; PPP-weighted 2014 -4 Sources: CEIC Data; IMF; RBA; Thomson Reuters Chart Pack | January 2015 2 World Economy China – Activity Indicators index Manufacturing PMI* Industrial production 20 45 10 Fixed asset investment 20 15 10 * 2010 2014 2010 M(m²) Log scale 140 120 120 60 100 30 2014 0 80 2006 Diffusion index; average of the official and HSBC 2010 * RBA estimates ** Trend 2014 2010 2014 15 Sources: CEIC Data; RBA; WIND Information Sources: CEIC Data; RBA China – Credit and Money Supply Growth Year-ended % Floor space sold** 2007 average = 100 % Real retail sales 30 0 2006 Prices % 55 % China – New Residential Property* index Year-ended growth China – Output Indicators % index 30 200 2006 average = 100 index Credit 30 200 Plate glass Electricity generation 20 20 150 10 100 150 M2 money supply 10 0 2006 Source: 2008 CEIC Data 2010 2012 2014 0 Crude steel 100 Cement 50 2006 2010 2014 2010 2014 50 Sources: CEIC Data; RBA Chart Pack | January 2015 3 Australian GDP Growth and Inflation GDP Growth % % Year-ended Consumer Price Inflation* % 5 4 4 2 2 0 0 Quarterly -2 1994 Source: 1998 2002 2006 2010 5 Year-ended 4 4 3 3 2 2 1 1 0 -2 2014 % (seasonally adjusted) -1 ABS 0 Quarterly 1994 * 1998 2002 2006 2010 -1 2014 Excluding interest charges prior to the September quarter 1998 and adjusted for the tax changes of 1999–2000 Sources: ABS; RBA Underlying Inflation* % % Weighted median 5 5 4 3 3 2 2 CPI excl volatile items 1 1 0 1994 * 1998 2002 2006 2010 0 2014 Excluding interest charges prior to the September quarter 1998 and adjusted for the tax changes of 1999–2000 Sources: ABS; RBA Tradables** 4 % 4 Year-ended 2 Trimmed mean 4 Tradables and Non-tradables Inflation* % 2 0 0 Quarterly (seasonally adjusted) % 1994 1998 Non-tradables*** 2002 2006 2010 % 2014 4 4 2 2 0 0 -2 1994 * 1998 2002 2006 2010 -2 2014 Adjusted for the tax changes of 1999–2000 ** Excluding volatile items (fruit, vegetables & automotive fuel) and tobacco *** Excluding interest charges prior to the September quarter 1998 and deposit & loan facilities prior to the September quarter 2011 Sources: ABS; RBA Chart Pack | January 2015 4 Household Sector Retail Sales Growth % Household Saving Ratio* % Per cent of household disposable income % Values % (year-ended*) 8 8 4 4 15 15 10 10 5 5 0 0 Volumes (year-ended) % % Volumes (quarterly) 0 0 -5 2002 * 2006 -5 2014 2010 -5 1989 Percentage change over year to latest three months Source: ABS * 2004 2009 -5 2014 ABS Private Residential Building Approvals ’000 1999 Net of depreciation Source: Monthly 1994 Consumer Sentiment ’000 Average since 1980 = 100 index index Total 15 15 100 10 100 10 Detached houses 5 Westpac and Melbourne Institute 75 75 5 ANZ-Roy Morgan* Higher-density housing 0 1994 Source: ABS 1999 2004 2009 0 2014 50 1994 1999 2004 2009 2014 50 * Rescaled to have the same average as the Westpac and Melbourne Institute index since 1996 Sources: ANZ-Roy Morgan; RBA; Westpac and Melbourne Institute Chart Pack | January 2015 5 Household Sector Household Wealth and Liabilities* Household Finances* Per cent of household disposable income % Debt % Interest paid 150 14 125 12 100 10 75 8 50 6 25 1994 * 2004 2014 1994 2004 2014 4 600 750 Sydney 650 Canberra Perth Melbourne 150 0 1998 2002 2006 2010 0 2014 Household liabilities exclude the liabilities of unincorporated enterprises; disposable income is after tax and before the deduction of interest payments Housing Loan Approvals $b $b Total 20 20 15 15 Owner-occupiers 10 Adelaide 350 Regional* * 150 Liabilities 10 450 350 2010 300 Financial assets 550 Australia Brisbane 250 450 300 * $’000 750 450 Dwellings Sources: ABS; RBA Housing Prices 550 600 450 Sources: ABS; RBA 650 % Net worth Household sector excludes unincorporated enterprises; disposable income is after tax and before the deduction of interest payments $’000 Per cent of annual household disposable income % 2014 2010 2014 Excludes apartments; measured as areas outside of capital cities in mainland states 250 5 0 5 Investors 2002 2005 2008 2011 2014 0 Sources: ABS; RBA Sources: CoreLogic RP Data; RBA Chart Pack | January 2015 6 Business Sector Private Non-financial Corporation Profits* Share of nominal GDP % % Non-mining 12 12 8 8 Mining 4 4 0 1998 * 2002 2006 2010 0 2014 Gross operating profits; inventory valuation adjusted Business Finances Business credit Per cent of nominal GDP Business conditions* % Interest paid* Per cent of profits** 15 0 0 -15 -15 -30 -30 ppt 17 15 15 0 0 -15 -15 -30 -30 14 40 11 30 2002 2008 2014 2002 2008 * Interest on intermediated debt from Australian-domiciled financial institutions ** Profits are private non-financial gross operating surplus (adjusted for privatisations) and gross mixed income 2014 % Capacity utilisation 84 84 81 81 78 78 Average since 1989 72 1989 * 50 ppt Business confidence* 75 60 ppt 15 % Sources: ABS; RBA % NAB Business Survey ppt 1994 1999 2004 2009 75 72 2014 Net balance; deviation from average since 1989 Sources: NAB; RBA 8 Sources: ABS; APRA; RBA Chart Pack | January 2015 7 Business Sector Capital Expenditure – Mining and Non-mining* Business Investment* Share of nominal GDP % % 18 18 Nominal, financial year, log scale $b Mining 128 128 64 16 16 14 14 12 12 10 10 2004 2009 2014 Machinery andthe equipment Adjusted for second-hand asset transfers between private 1989 * 1994 1999 64 32 32 16 16 8 8 4 4 2 1995 * and other sectors Source: ABS 2005 2015 1995 2005 2015 2 Sample of firms' spending plans; dots represent the survey's most recent estimates for 2014/15 adjusted for historical realised spending Sources: ABS; RBA Private Non-residential Building Approvals Business Investment Components* Share of nominal GDP % $b Non-mining % Per cent of nominal GDP % % Machinery and equipment 8 8 6 6 4 3 3 2 2 1 1 4 Buildings 2 2 Engineering 0 1989 * 1994 1999 2004 2009 Adjusted for second-hand asset transfers between the private and other sectors Source: ABS 0 2014 0 1989 Source: 1994 1999 2004 2009 0 2014 ABS Chart Pack | January 2015 8 Credit and Money Credit and Broad Money Growth Year-ended % Credit* Ratio to nominal GDP % ratio 15 15 1.4 1.4 10 10 1.1 1.1 5 5 0.8 0.8 0 2014 0.5 ratio Broad money Credit 0 1998 2002 2006 2010 Sources: APRA; RBA 1994 * 1999 2004 2009 0.5 2014 Not adjusted for breaks Sources: ABS; APRA; RBA Monetary Aggregates Growth Year-ended % Credit Growth by Sector Year-ended % % 18 18 20 20 12 12 10 10 6 6 0 Housing M3 Business Currency 0 1998 Sources: APRA; RBA 2002 2006 % 0 Personal 2010 0 2014 -10 2002 2006 2010 -10 2014 Sources: APRA; RBA Chart Pack | January 2015 9 Factors of Production and Labour Market Factors of Production Annual growth % % Capital stock* 5 5 3 3 % % Working-age population 2.0 2.0 1.5 1.5 1.0 1.0 13 / 14 83 / 84 * 89 / 90 95 / 96 01 / 02 07 / 08 Wage Price Index Growth % %% Private sector 5 % Public sector 55 5 4 44 4 3 33 3 22 2 11 1 Year-ended 2 Quarterly 1 0 2002 Source: 2008 00 2014 2002 2008 2014 0 ABS Excluding livestock & orchards, dwellings and ownership transfer costs Sources: ABS; RBA Capital Ratios* Unit Labour Costs Growth 1979/80 = 100 index index 200 200 Capital-labour ratio 180 180 160 160 140 140 120 120 Capital-output ratio 100 100 80 83 / 84 * 89 / 90 95 / 96 01 / 02 07 / 08 80 13 / 14 Capital stock excludes livestock & orchards, dwellings and ownership transfer costs Sources: ABS; RBA Non-farm, year-ended % % Unit labour costs 5 5 0 0 % % Average earnings per hour 5 5 0 0 Labour productivity per hour -5 1994 1998 2002 2006 2010 -5 2014 Sources: ABS; RBA Chart Pack | January 2015 10 Factors of Production and Labour Market % Employment and Participation Rates Employment and Hours Worked* % Participation rate 2007 average = 100 index 64 index Employment 64 110 61 110 61 105 58 Average hours worked 58 100 Employment to working-age population 55 1994 Source: 1998 2002 2006 2010 105 Total hours worked 55 2014 ABS 100 95 2008 * 2010 2012 2014 95 Smoothed lines are 13-period Henderson trends Sources: ABS; RBA Unemployment Rate % % 10 Job Vacancies and Advertisements Per cent of labour force % % Advertisements 10 (ANZ survey) 2.0 8 8 6 6 4 4 1.0 2 2014 0.5 2 1994 Source: 1998 ABS 2002 2006 2010 2.0 1.5 1.5 Vacancies* (ABS survey) 1.0 2002 * 2006 2010 0.5 2014 This survey was suspended between May 2008 and November 2009 Sources: ABS; ANZ Chart Pack | January 2015 11 Regions and Industry State Share of Output* % % New South Wales 35 35 30 30 Victoria 25 20 25 20 Queensland 15 15 Western Australia 10 10 South Australia 5 5 Tasmania 0 93 / 94 * 98 / 99 03 / 04 08 / 09 0 13 / 14 Nominal Source: State Final Demand Growth Year-ended % 10 10 Victoria 5 5 0 New South Wales -5 % 15 10 10 5 5 0 0 -5 Western Australia % 10 % Tasmania 8 7 South Australia % 8 7 New South Wales 6 6 5 5 Victoria 4 2 Source: 2010 0 0 Tasmania* -5 -10 1994 * 1999 -5 2004 2009 -10 2014 Adjusted for the purchase and sale of ferries in 2002 Sources: ABS; RBA 3 Western Australia 2006 5 4 Queensland 3 10 South Australia 5 Trend -5 15 Queensland % State Unemployment Rates 0 % -5 ABS % 2014 2006 2010 2014 2 ABS Chart Pack | January 2015 12 Regions and Industry Industry Share of Output* % Manufacturing % 14 40 20 6 6 Mining Agriculture 10 1999 2004 2 2014 2009 20 10 0 93 / 94 98 / 99 03 / 04 08 / 09 * Nominal gross value added * Nominal ** Includes: information media and telecommunications; rental, hiring and real estate services; professional, scientific and technical services; administrative and support services ** Includes: information media and telecommunications; rental, hiring and real estate services; professional, scientific and technical services; administrative and support services Source: 30 Construction Agriculture 1994 Mining Manufacturing Retail and Other business wholesale trade services** 10 Financial and insurance services Construction 40 Financial and insurance services 30 Retail and wholesale trade 2 % Other business services** 14 10 Industry Share of Business Investment* % ABS Source: 0 13 / 14 ABS Employment Growth by Industry Cumulative change since February 2011 ’000 300 ’000 300 Household services 200 Business services Construction 100 Public administration 200 100 Mining 0 0 Retail and wholesale trade -100 2012 * 2014 Other* Manufacturing 2012 2014 -100 Includes agriculture, forestry & fishing; transport, postal & warehousing; and electricity, gas, water & waste services Source: ABS Chart Pack | January 2015 13 Government Australian Government Budget Balance* Per cent of nominal GDP % State Budget Balances* % 2 2 1 1 0 0 -1 -1 -2 -2 -3 -3 -4 -4 -5 81 / 82 * 87 / 88 93 / 94 99 / 00 05 / 06 11 / 12 -5 17 / 18 Per cent of nominal GDP % 1.0 1.0 0.5 0.5 0.0 0.0 -0.5 -0.5 -1.0 -1.0 -1.5 82 / 83 * Underlying cash balance; MYEFO 2014/15 Source: Public Construction Work Done % 92 / 93 97 / 98 02 / 03 07 / 08 ABS Per cent of nominal GDP % 3 % Non-financial public sector Total 30 30 20 2 20 Australian Government 2 Engineering 1 1 10 10 0 0 Building 0 1989 Source: 1994 ABS 1999 2004 2009 -1.5 12 / 13 Non-financial Public Sector Net Debt* % 3 87 / 88 Underlying cash balance Source: Australian Treasury Per cent of nominal GDP % State and local general governments 0 2014 -10 93 / 94 * 98 / 99 03 / 04 08 / 09 -10 13 / 14 Estimates as at the 2014/15 Budget Source: Australian Treasury Chart Pack | January 2015 14 Commodity Prices Base Metals, Rural and Oil Prices RBA Index of Commodity Prices SDR, 2012/13 average = 100 index index Weekly index US$/b Base metals* 120 120 220 150 100 100 190 80 80 160 100 60 60 130 75 40 40 100 50 20 2014 70 Rural* 20 1989 Source: 1994 1999 2004 2009 2006 * RBA 2010 2014 Brent oil 2006 2010 125 2014 25 RBA Index of Commodity Prices sub-indices; SDR terms; 2005 average = 100 Sources: Bloomberg; RBA Terms of Trade* Bulk Commodity Prices Free on board basis US$/t Iron ore Thermal coal (LHS) (LHS) Coking coal US$/t index (RHS) 170 350 Average Australian export price 2012/13 average = 100 index 100 100 80 80 60 60 40 40 Spot price* 130 250 90 150 50 2010 * 2012 2014 2012 2014 2012 2014 50 Iron ore fines, Newcastle thermal coal and premium hard coking coal Sources: ABS; AFR; Bloomberg; Citigroup; IHS Energy Publishing; Macquarie Bank; RBA; Thomson Reuters 20 1954 * 1969 1984 1999 20 2014 Annual data are used prior to 1960 Sources: ABS; RBA Chart Pack | January 2015 15 Balance of Payments and External Position Export Volumes Bulk Commodity Exports Quarterly, 2012/13 prices, log scale $b Resources $b Services 40 12 Rural 20 6 Manufacturing 10 2000 2007 2014 2000 2007 2014 3 Quarterly Mt Iron ore 170 110 150 100 130 90 110 80 90 70 70 60 50 50 30 Sources: ABS; RBA 2004 2009 2014 2004 2009 $b Intermediate Consumption Annual, share of total values % % 30 16 16 8 8 30 China 25 20 Services Capital 4 Japan 15 10 10 South Korea US India Source: ABS 2014 2000 2007 20 15 5 2007 25 EU - 27 4 2000 40 Exports by Destination Import Volumes 2 2014 Sources: ABS; RBA Quarterly, 2012/13 prices, log scale $b Mt Coal 2014 2 0 2001 Source: 2005 2009 5 0 2013 ABS Chart Pack | January 2015 16 Balance of Payments and External Position Current Account Balance Per cent of nominal GDP % Trade balance Net Capital Inflow* % Net income balance 0 -3 -3 -6 -6 Source: 1999 2004 2009 8 Debt 6 4 4 2 2 0 -9 2014 -2 2002 * Net Foreign Liabilities Total 60 45 2006 2010 -4 2014 2014 values are year to September quarter Source: % 0 Equity -4 ABS Per cent of nominal GDP 6 -2 Current account balance 1994 % 8 0 -9 Per cent of nominal GDP % ABS External Position Composition after hedging, quarterly* % $b 60 2 500 45 2 000 30 1 500 1 500 15 1 000 1 000 Gross foreign liabilities $b Gross foreign assets 2 500 Foreign currency Australian dollar 2 000 Debt 30 Equity 15 0 0 -15 1994 Source: ABS 1999 2004 2009 -15 2014 500 500 0 2004 * 2009 2004 2009 0 2014 Hedge ratios inferred from ABS Foreign Currency Exposure surveys Sources: ABS; RBA Chart Pack | January 2015 17 Interest Rates Australian Cash Rate and 90-day Bill Yield % % 90-day bill yield 8 8 7 7 6 % US 5 5 4 4 6 3 Cash rate 5 Euro area 2 4 3 3 1 2 0 2004 2006 3 5 4 2 Policy Interest Rates – G3 % 2008 2010 2012 2014 Sources: AFMAData; RBA 2 2004 * Australian Cash Rate 2012 2014 0 % NZ 8 6 2010 central banks 9 Cash rate 2008 Policy Interest Rates – Selected Advanced Economies % % 9 2006 Since April 2013, the Bank of Japan’s main operating target has been the money base Source: % 1 Japan* 8 6 6 3 6 UK 3 4 0 0 Real cash rate* -3 1994 * 1998 2002 2006 4 Canada 2 2010 Calculated using average of weighted median and trimmed mean inflation Sources: ABS; RBA -3 2014 Sweden 2 Switzerland 0 2004 2006 Source: central banks 2008 2010 2012 2014 0 Chart Pack | January 2015 18 Interest Rates Policy Interest Rates – Asia % Thailand 15 South Korea 10-year Australian Government Bond Yield % % % 5 7 7 4 6 6 3 5 5 2 4 4 1 3 3 0 2 Indonesia 12 Malaysia 9 6 India Taiwan 3 0 2006 Source: 2010 2014 2006 2010 2014 Source: central banks Policy Interest Rates – Emerging Markets % % Brazil 20 2002 20 % 15 Russia* Mexico 10 10 10-year Government Bond Yields 6 5 US 2004 * 2006 2008 2010 4 3 3 Germany 2 1 1 Japan 2012 2014 On 13 September 2013, the Central Bank of the Russian Federation changed its official policy rate to the rate on its one-week open market operations, which was left unchanged at the September 2013 meeting Source: 5 4 Poland 0 % 6 2 South Africa 5 2 2014 2010 RBA 5 15 2006 0 0 2002 Source: 2006 2010 2014 0 Thomson Reuters central banks Chart Pack | January 2015 19 Interest Rates % Spread between Australian 10-year Bond Yield and the Cash Rate US Bond Yields % 4 4 2 2 0 0 -2 -2 -4 -4 3-5 years % % BBB corporates* 9 -6 1994 Source: 1999 2004 2009 -6 2014 9 AAA corporates* 6 6 3 3 Swap 0 1998 * RBA 2002 2006 2010 2014 0 Includes financials and non-financials Sources: Bank of America Merrill Lynch; Bloomberg bps Differential between Australian and US 10-year Government Bond Yields US Bond Spreads bps 500 500 400 400 300 300 200 200 100 100 To US government bonds, 3-5 years bps bps BBB corporates* 800 800 A corporates* 600 600 AAA corporates* 400 400 Swap 200 0 -100 200 0 1994 1999 Sources: Bloomberg; RBA 2004 2009 -100 2014 0 1998 * 2002 2006 2010 2014 0 Includes financials and non-financials Sources: Bank of America Merrill Lynch; Bloomberg Chart Pack | January 2015 20 Interest Rates % Emerging Market Bond Yields % Australian Bond Yields* % % BBB corporates Europe 20 20 8 15 8 AA corporates Latin America 15 6 10 10 Asia 5 0 6 5 1998 2002 2006 2010 2014 0 Swap 4 4 Australian Government 2 1998 Sources: Bloomberg; RBA; Thomson Reuters * 2002 2006 2010 2 2014 Australian Government yields and swap rates are for 3-year maturity. Corporate bond yields are a weighted average of senior bonds with remaining maturities of 1 to 5 years; they include financial and non-financial corporates. Sources: Bloomberg; RBA; UBS AG, Australia Branch Australian Bond Spreads* Emerging Market Bond Spreads To US government bonds, duration-matched bps bps 1 500 500 1 200 400 900 900 300 600 600 200 300 100 bps 1 500 Europe Latin America 1 200 300 Spread over government yields BBB corporates 1998 2002 2006 Sources: Bloomberg; RBA; Thomson Reuters 2010 2014 0 500 400 300 AA corporates 200 A corporates 100 Swap Asia 0 bps 0 1998 * 2002 2006 2010 0 2014 Swap spreads are for 3-year maturity. Corporate bond spreads are a weighted average of senior bonds with remaining maturities of 1 to 5 years; they include financial and non-financial corporates. Sources: Bloomberg; RBA; UBS AG, Australia Branch Chart Pack | January 2015 21 Interest Rates Australian Housing Lending Rates Australian Fixed Interest Rates Average interest rate on variable-rate loans % % 3-year maturity % % Banks’ indicator rate on new loans 10 10 Actual rate on outstanding loans 8 8 6 6 Cash rate 4 2 1994 1998 2002 2006 4 2010 2 2014 12 Small business 10 10 8 8 6 6 Swap rate Housing 4 2 Sources: ABS; APRA; Perpetual; RBA % 12 1994 1998 Weighted-average outstanding variable rate** 12 Average interest rate on outstanding lending Small business % Overdraft other security* 10 10 8 8 6 6 Cash rate 4 4 Term loan residential security* * Indicator rates ** Including risk margins 2002 2 2014 2006 2010 2 2014 % 10 10 8 8 6 6 % 1998 2010 Australian Business Lending Rates % 12 1994 2006 Sources: Bloomberg; RBA Australian Small Business Interest Rates 2 2002 4 % Large business 8 8 6 6 4 4 2 1998 2002 2006 2010 2 2014 Sources: APRA; RBA Sources: APRA; Canstar; RBA Chart Pack | January 2015 22 Share Markets Australian and World Share Price Indices index 500 400 Log scale, end December 1994 = 100 Major Economies’ Share Price Indices index 500 400 300 300 300 200 200 200 S&P 500 Log scale, end December 1994 = 100 index 400 index 400 US Euro area 300 200 UK 100 MSCI World ASX 200 Japan 100 80 100 100 1998 2002 2006 2010 80 2014 Sources: Bloomberg; MSCI; RBA; Thomson Reuters 40 1998 Log scale, end December 1994 = 100 Resources 400 300 2006 2010 2014 40 Sources: Bloomberg; RBA Australian Share Price Indices index 600 500 2002 Share Price Indices index 600 500 400 300 Financials 200 index 1 500 Log scale, end December 1994 = 100 Emerging Europe 1 000 1 000 Latin America 500 500 China 200 200 All other sectors 100 index 1 500 100 200 World 100 100 Emerging Asia 60 1998 2002 2006 Sources: Bloomberg; RBA; Thomson Reuters 2010 60 2014 40 1998 2002 2006 2010 2014 40 Sources: Bloomberg; MSCI Chart Pack | January 2015 23 Share Markets Trailing P/E Ratios ratio MSCI World excluding Australia ratio Dividend Yields % % MSCI Australia 30 30 6 6 20 20 4 4 10 2 2 MSCI Australia 10 MSCI World excluding Australia 0 1989 1994 1999 2004 2009 0 0 2014 1994 1999 2004 0 2014 2009 Sources: MSCI; Thomson Reuters Sources: MSCI; Thomson Reuters Forward P/E Ratios ratio 1989 ratio MSCI world Forecast Earnings per Share MSCI Australia Index Index 09/10 20 20 08/09 90 11/12 07/08 MSCI Australia 10 14/15 06/07 10 90 12/13 13/14 70 70 10/11 05/06 0 1989 1994 1999 Sources: MSCI; Thomson Reuters 2004 2009 0 2014 50 2006 2008 2010 2012 2014 50 Sources: MSCI; Thomson Reuters Chart Pack | January 2015 24 Bond Issuance Bonds on Issue in Australia $b $b Non-government Bonds on Issue in Australia $b $b Non-government** Financials 400 400 300 300 200 150 150 Asset-backed securities* 100 100 50 50 200 Australian Government* 100 100 State governments 0 1994 1999 2004 2009 0 2014 Non-financial corporates Non-residents 0 1994 * Excludes bonds purchased by the Australian Government * ** Excludes ADIs’ self-securitisations, includes government-guaranteed bonds Sources: ABS; RBA 1999 2004 2009 0 2014 Excludes ADIs’ self-securitisations Sources: ABS; RBA Non-government Bond Issuance $b Domestic issuers* Non-government Bonds on Issue Offshore Gross issuance Australia $b $b Financials Non-resident issuers** 40 All currency denominations $b 40 300 20 300 20 $b $b Offshore 60 60 40 40 20 20 0 2002 2006 2010 0 2014 * Excludes ADIs’ self-securitisations ** Offshore non-resident issuance includes Australian dollar-denominated bonds only Source: 200 Non-financial corporates Asset-backed securities 100 100 Non-residents* 0 1994 * 1998 200 2002 2006 2010 0 2014 Australian dollar-denominated bonds only Sources: ABS; APRA RBA Chart Pack | January 2015 25 Equity Raisings and Business Financing Australian Equity Raisings* $b 6 $b 6 IPOs 4 4 2 2 $b 30 $b 30 Other raisings 20 20 10 10 $b 0 -5 -5 2002 * 2005 2008 Net Non-intermediated Capital Raisings* Non-financial corporates Financials and assetbacked securities** $b 75 75 50 50 25 25 0 0 $b Buybacks 0 -10 $b 2011 2014 -10 -25 All listed companies Sources: ASX; RBA 2004 2009 2014 2004 2009 * Includes equity, hybrids, bonds, and short-term debt ** Excludes ADIs’ self-securitisations; financials include banks and non-bank financials 2014 -25 Sources: APRA; ASX; Austraclear; RBA Australian Net Equity Raisings* $b 30 Business External Funding $b Non-financials corporates Financials** 30 % Net change as a share of GDP Non-intermediated debt Business credit Equity Total % 25 25 15 20 20 10 10 15 15 10 10 5 5 5 5 0 0 0 0 -5 -5 -5 -5 2002 2005 2008 * All listed companies ** Includes banks and non-bank financials 2011 2014 -10 1994 1999 2004 15 2009 -10 2014 Sources: ABS; APRA; ASX; RBA Sources: ASX; RBA Chart Pack | January 2015 26 Exchange Rates Australian Dollar TWI* index index 80 80 Real Official Reserve Assets A$b 80 80 Gross 60 70 A$b 60 70 40 60 60 Nominal 50 40 1984 * 1989 1994 1999 2004 2009 50 2014 40 May 1970 = 100 for nominal; real indexed to equate post-float averages Sources: ABS; RBA; Thomson Reuters; WM/Reuters 20 20 Net* A$b RBA net purchases of foreign exchange** 4 A$b 4 2 2 0 0 -2 -2 A$b RBA foreign exchange market intervention transactions*** 4 Australian Dollar against US Dollar, Euro and Yen yen 40 US$, euro A$b 4 2 2 0 0 -2 -2 -4 1998 * 2002 2006 2010 -4 2014 Excludes foreign exchange swaps ** 200 1.60 Yen per A$ (LHS) 150 1.20 US$ per A$ Euro per A$* 50 1984 * 1989 1994 1999 Source: RBA (RHS) (RHS) 100 Includes market, government and other outright transactions, excludes swap deliveries *** Data up to 30 June 2014; a positive value indicates a purchase of foreign exchange, while a negative value indicates a sale of foreign exchange 0.80 2004 2009 2014 0.40 ECU per A$ until 31 December 1998 Sources: Thomson Reuters; WM/Reuters Chart Pack | January 2015 27 Exchange Rates US Dollar against Euro and Yen yen US$ Selected Asian Currencies against the US Dollar 31 January 2000 = 100 index 250 0.9 140 210 120 (RHS, inverted scale) 170 120 1.7 130 Thailand Malaysia 100 100 India 2.1 80 Yen per US$ (LHS) 90 80 2.5 60 50 1984 * 1990 1996 2002 2.9 2014 2008 Nominal TWI index index Yen 120 120 100 100 2002 80 2002 2006 2010 2014 60 2010 2014 40 Bloomberg Chinese Renminbi index 120 2006 yuan 6.0 Nominal effective exchange rate (LHS, 2010 average = 100) 110 6.5 100 7.0 90 7.5 80 Euro US dollar 60 40 Source: March quarter 1999 = 100 60 Indonesia US$ per ECU until 31 December 1998 Sources: Bloomberg; Eurostat 80 140 South Korea 1.3 US$ per euro* index Singapore (RHS, inverted scale) 70 60 8.0 Yuan per US$ 2002 2006 2010 8.5 2014 9.0 Sources: BIS; Bloomberg; RBA Sources: BIS; Bloomberg; Board of Governors of the Federal Reserve System; RBA Chart Pack | January 2015 28 Banking Indicators Bank Profits Profits after tax Major banks* $b Bad and doubtful debt charge $b Major banks* 12 12 Bank Profitability* Institutions operating in Australia Return on shareholders’ equity % % Post-tax and minority interests 20 20 10 6 6 10 Regional banks 0 0 Major banks % $b Regional banks** $b Regional banks** 0.5 0.5 Per cent of average assets 1.5 0.0 1.0 1.0 Regional banks 0.0 1989 * $b Foreign-owned banks*** Foreign-owned banks*** 1.6 $b na -1.6 2007 2011 2007 2011 1994 1999 2004 0.5 0.0 2014 2009 From 2006 data are on an IFRS basis; prior years are on an AGAAP basis; includes St. George and, from 2009, Bankwest Sources: Banks’ Annual and Interim Reports; RBA 1.6 0.0 1.5 Major banks 0.5 0.0 % Change for bad and doubtful debts Major Banks’ Net Interest Margin* Domestic, half-yearly na 0.0 % -1.6 2015 3.0 3.0 2.5 2.5 2.0 2.0 % Actual Actual Analysts' forecasts Analysts' forecasts * ANZ, NAB and Westpac report half yearly to March and September, while CBA reports to June and December ** Suncorp Bank and Bendigo and Adelaide Bank report half yearly to June and December, while Bank of Queensland reports to February and August *** All results are half year to June and December Sources: APRA; Banks’ Annual and Interim Reports; Credit Suisse; Deutsche Bank; Nomura Equity Research; RBA; UBS Securities Australia 1.5 2002 * 2006 2010 1.5 2014 From 2006 data are on an IFRS basis; prior years are on AGAAP basis; excludes St George Bank and Bankwest prior to the first half of 2009 Sources: Banks’ Financial Reports; RBA Chart Pack | January 2015 29 Banking Indicators Banks’ Non-performing Assets Consolidated global operations, share of on-balance sheet assets % % Total* 6 Banks’ Non-performing Assets Domestic books, share of loans by type % % 5 5 4 4 6 Business and other* 4 4 2 3 3 2 2 2 Impaired 0 1994 * 1999 2004 2009 0 2014 Locally incorporated banks 2008 2010 2012 2014 0 APRA Funding Composition of Banks in Australia* Consolidated global operations % 2006 Includes lending to financial businesses, bills and debt securities Source: Capital Ratios* Housing 2004 * APRA 1 Total* 0 Includes assets 90+ days past due that are well secured Source: Personal 1 % Other ADIs Credit unions Share of total funding % % Domestic deposits 50 15 50 15 40 Total 40 Short-term debt** 10 10 Building societies Tier 1 1994 * APRA Equity 10 2004 2014 1994 2004 2014 Per cent of risk-weighted assets; break in March 2008 due to the introduction of Basel II for most ADIs; break in March 2013 due to the introduction of Basel III for all ADIs Source: 20 Long-term debt 5 Tier 2 0 30 20 Common Equity Tier 1 5 30 0 0 10 Securitisation 2004 2006 2008 2010 2012 2014 * Adjusted for movements in foreign exchange rates; tenor of debt is estimated on a residual maturity basis ** Includes deposits and intragroup funding from non-residents 0 Sources: APRA; RBA; Standard & Poor’s Chart Pack | January 2015 30
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