Back to top

Analyst Blog

In an effort to gain from rising demand for assets, The Goldman Sachs Group, Inc. (GS - Analyst Report) is expanding its fixed income business in Australia. Goldman intends to make its Sydney division a global center for dealing in the high-yielding bonds of the country.

Goldman plans to add approximately 10 staff members to its unit in Sydney, representing a 50% hike from the current levels. The U.S. banking giant has already started the hiring process.

The expansion method involves sales and trading of government and corporate bonds of Australia, along with some interest income generating products. The company has set up a specialist sales desk to serve offshore investors including hedge funds, sovereign wealth funds as well as central banks.

Australian dollar-denominated assets have high global demand. Recently, foreign holdings of Australian debt have stayed close to record highs. The Swiss and Russian central banks and others foreign banks have expanded profoundly in Australia as Europe’s debt crisis has worsened. Further, Australian bonds offer an alternative to the low rate financial products globally.

However, Goldman will face tough competition from Deutsche Bank AG (DB - Analyst Report) which dominates the trading business and is nicknamed by many as the “Flows Monster.”

We believe the planned expansion of Goldman would substantially augment fixed income business revenues and partially mitigate the impact of a low interest rate environment that the bank has been facing in most countries throughout the world.

Goldman currently carries a Zacks Rank #3 (Hold). Other banking stocks that are performing better include Duff & Phelps Corporation and EverBank Financial Corp. (EVER - Snapshot Report). Both these carry a Zacks Rank #1 (Strong Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%
NUSTAR GP H… NSH 41.14 +2.59%