Bloomberg News

Australia Plans First Series of Japan Investor Meetings in Tokyo

October 31, 2011

Oct. 31 (Bloomberg) -- The Australian Office of Financial Management will meet about 20 institutions in Tokyo next week in its first series of investor meetings in Japan.

Officials from the Australian government’s funding arm are planning to hold discussions with fund managers, securities firms, insurance companies and banks over four days beginning Nov. 7, said Rob Nicholl, head of the AOFM. Kokusai Asset Management Co., which runs Asia’s biggest bond fund, and Daiwa Asset Management Co. are among the three largest investors in Australia’s sovereign debt, Bloomberg data show.

“We will be updating our current investors on Australia’s economic fundamentals as well as our issuance program and developments in the sovereign bond market,” Nicholl said. “We will also be meeting with potential new investors.”

Australian sovereign bonds offered a 9.1 percent return over the past 12 months, trailing gains in debt issued by only the U.K. and New Zealand among 26 markets tracked by Bloomberg/EFFAS indexes. Investors bought the nation’s securities amid concern about fiscal crises in the U.S. and Europe and as Prime Minister Julia Gillard pledged to return Australia’s budget to surplus by 2013.

The AOFM will also discuss the sale on Oct. 20 of its longest-maturity government bond since 1984. Eighty percent of the 2027 bonds sold were scooped up by domestic investors, according to Citigroup Inc., which helped manage the offering. The note yielded 4.87 percent as of 2:45 p.m. in Sydney and is the only security to offer more than the Reserve Bank of Australia’s 4.75 percent benchmark interest rate.

“A number of Japanese institutions are natural long-bond investors and so we felt that the 2027 line should gain a fair amount of interest,” Nicholl said. “During the past months of extreme international market volatility, we have seen strong demand for our bonds hold up despite the fluctuations in our currency. We can continue to see steady growing interest in the Australian market.”

--Editors: Benjamin Purvis, Naoto Hosoda

To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net


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