News

In late 2023, MUFG – facilitated by KangaNews – hosted its inaugural conference in Sydney focused on transition and access to global capital, as part of the MUFG N0W series of regional events. The scale and scope of the energy transition task means it will shape and even define capital markets in the coming years, in all areas and types of finance.

Australia has plenty of work to do if it is to align capital and collaboration for a just transition to a sustainable, low-carbon future. Speakers at the Australian Sustainable Finance Institute’s conference in Sydney in October called attention to the financial sector’s role, responsibilities and opportunities to support First Nations Australians and amplify their voices in the wake of the failure of the Indigenous Voice to Parliament referendum.

The Reserve Bank of New Zealand provided an update to its liquidity policy review on 5 December, with the banking system regulator now set to include level two liquid assets and a substantial committed liquidity facility in the forthcoming regime. The reserve bank has confirmed that securities issued by New Zealand Local Government Funding Agency and by “highly rated” Kauri borrowers will be included as level two liquid assets.

Long one of the most significant issuers from the supranational, sovereign and agency sector in the Kangaroo and Kauri markets, European Investment Bank picked its moments to print a substantial volume of Australian dollars once again in 2023. Key funding executives from the supranational share their end-of-year views with KangaNews on a range of issues – including seeking tenor in a challenging market, New Zealand dollar prospects and having a major role in financing the EU’s energy transition.

The 2023 Commonwealth Bank of Australia Global Markets Conference brought international investors to Australia at a fascinating juncture for the local economy and the fixed-income asset class. While the general view remains that the central bank hiking cycle is close to played out, the market is also coming to terms with the real consequences of a higher for longer environment. Australia is not fully insulated against cold global winds but it also has reasons for optimism.

In October 2023, KangaNews caught up with Asian Infrastructure Investment Bank’s Beijing-based president, Jin Liqun. He was in Australia to attend the Commonwealth Bank of Australia Global Markets Conference and conduct meetings to update AIIB governor and Australian federal treasurer Jim Chalmers, government officials and local stakeholders on the work of the bank and its future plans.

The Australian Prudential Regulation Authority’s plans to uplift liquidity rules for a swathe of smaller local banks is likely to shake up the sector once more, market participants say. The increased cost of funding liquidity books and likely loss of demand for their wholesale debt instruments may be enough to spark further consolidation among financial institutions with smaller and less established capital markets presence.

New Zealand is well ahead of the game when it comes to net zero transition in power generation, but many other sectors of its economy still have a long way to go to establish long-term sustainable foundations. Recent climate events, meanwhile, make it very clear that the time for delay has long passed. Speakers at the KangaNews-Westpac New Zealand Sustainable Finance Summit, which took place in Auckland in November, discussed the critical issues in the context of making sure the next step is action rather than fatigue.

Australia’s big-four bank funders have enjoyed a notable uplift in domestic capacity for their wholesale issuance that became even more pronounced in 2023. Speaking at a KangaNews-RBC Capital Markets roundtable in Sydney in December, the issuers emphasised the value of a consistent issuance approach even in changeable conditions.

Energy transition will affect every nation, business and individual, and the scale of the task – and the resulting upheaval – is only now starting to become a stark reality. Fitch Ratings and KangaNews gathered Australian and New Zealand capital market participants representing the full power supply chain and the buy side to discuss with Fitch’s analysts what is coming down the pike.