JPMorgan Chase & Co. · NYSE:JPM
JPMorgan Chase & — Corporate Update (January 2010)
17 slides from JPMorgan Chase &'s corporate update, Jan 14, 2010
Slide 1: Securities Lending Market Update
Securities Lending Market Update Outside U.S.: +44 (0)20 7162 0025 Within U.S.: +1 877 491 0064 Conference ID: 853008 January 14, 2010 ©2010 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A.
Slide 2: Agenda
Agenda Market Summary From the Investment Desk From the Lending Desk: Fixed Income From the Lending Desk: Equities Closing Thoughts and Questions 2
Slide 3: Market Summary
Market Summary J.PMorgan
Slide 4: From the Investment Desk
From the Investment Desk J.PMorgan
Slide 5: Investment Desk - Q4 Wrap Up
Investment Desk - Q4 Wrap Up • LIBOR rates continue to tighten further, the spread between 1-Month and 3-Month LIBOR is currently 1.5 basis points with the 3 month Libor-OIS spread (an indicator of credit conditions in the market) at close to pre-crisis levels (Began year at 100bps). • Continued sig
Slide 6: Investment Desk - 2010 Outlook
Investment Desk - 2010 Outlook • We continue to find support for our view that the Fed will remain on hold through Q3 potentially throughout the whole of 2010. • Most recent Fed minutes confirm our view with the Fed clearly remaining cautiously optimistic vis-à-vis the recovery noting "more than one
Slide 7: Investment Desk - Why Equity Repos?
Investment Desk - Why Equity Repos? • For equity lenders, equity collateral offers strong correlation between the lending portfolio and the re-investment portfolio. • Diversification of collateral. • Collateral pricing with exchange traded closing price; margin pressure on market volatility not on c
Slide 8: From the Lending Desk: Fixed Income
From the Lending Desk: Fixed Income
Slide 9: Fixed Income Lending Desk - Market Update
Fixed Income Lending Desk - Market Update • Supply and Demand – record issuance − The US Treasury sold approximately 2.1 trillion gross in notes and bonds for the year 2009, exceeding 2007 and 2008 combined. • Year-end → lack of liquidity; US Treasury general collateral trades as low as (-1.80%) • I
Slide 10: Fixed Income Lending Desk - 2010 Outlook
Fixed Income Lending Desk - 2010 Outlook • Uncertainty over raising the debt ceiling – Debt ceiling was increased by the House of Representatives by $290bn to $12.4tn on December 16. The increase should allow Treasury to issue enough debt to fund the government’s operations & programs until Mid-Febr
Slide 11: From the Lending Desk: Equities
From the Lending Desk: Equities
Slide 12: Equity Lending Desk – Q4 Market Environment
Equity Lending Desk – Q4 Market Environment • The quarter got off to a good start with equity markets hitting 12 month highs in October, however they weakened in November before bouncing back with an end of year rally in December. Although a positive for balances as values increased in line with the
Slide 13: Equity Lending Desk - 2009 Summary
Equity Lending Desk - 2009 Summary A very tough year for equity lending: • Dividend revenue down significantly. • Short covering due to the equity market rally and a lack of big deals. • Long bias at hedge funds. Positives for the business: • The large number of capital raising deals, especially in
Slide 14: Equity Lending Desk – 2010 Outlook
Equity Lending Desk – 2010 Outlook Positive on many fronts: • Analysts predicting an increase in M&A and IPO activity. • Prime brokers reporting that off the back of a good year in 2009 hedge funds will have money to invest and will trade more actively. • Expectations of a continued equity market ra
Slide 15: Closing Thoughts & Questions
Closing Thoughts & Questions
Slide 16: Summary
Summary • 2009 was a challenging year for lending across all assets classes, driven by subdued market activity, few specials, lower M&A, plus large amounts of liquidity from central bank sponsored programs. • As we head into 2010: – Potential for increased M&A, IPO’s and hedge fund activity along wi
Slide 17: J.P. Morgan ACCESS Dashboard: Securities Lending Snapshot
J.P. Morgan ACCESS Dashboard: Securities Lending Snapshot 17