Kangaroos

Key takeaways

• “Kangaroos” is a colloquial term for Australian equities that make up the All‑Ordinaries Index and for foreign bonds issued in Australia and denominated in Australian dollars (AUD).
• The All‑Ordinaries Index is a market‑capitalization‑weighted benchmark of roughly 500 of the most actively traded Australian companies.
• Kangaroo bonds are AUD‑denominated foreign bonds issued in Australia by non‑Australian issuers seeking access to Australian investors or lower borrowing costs.

What the All‑Ordinaries Index represents

The All‑Ordinaries Index is the primary broad benchmark for the Australian equity market. It was launched on December 31, 1979, with a base value of 500 and includes about 500 of the most actively traded companies listed on the exchange.

How it’s constructed and calculated
* Market‑capitalization weighted: larger companies have a proportionally greater influence on index movements than smaller ones.
* Base and calculation: current index value is proportional to the aggregate market value of member companies relative to that of the base period.
* Inclusion criteria: a stock must represent at least 0.2% of the total market value of domestic equities and have an average monthly turnover of at least 0.5% of its quoted shares.
* Sector composition: financials typically form the largest sector weighting, followed by materials and industrials.

What the index measures (and what it doesn’t)
* Reflects aggregate market performance of included stocks (price movements weighted by market cap).
* Does not include dividends, so it does not represent total shareholder return; dividend reinvestment would produce a different, higher total‑return figure.

Maintenance
* The index is reviewed and updated regularly (monthly), and changes can occur mid‑month for events such as delistings, additions, or corporate actions.

Kangaroo bonds (bond market meaning)

“Kangaroo bond” refers to a bond issued in Australia by a foreign (non‑Australian) entity and denominated in Australian dollars.

Why issuers use kangaroo bonds
* Access to Australian investor demand and diversification of funding sources.
* Potential cost savings when Australian interest rates are lower than the issuer’s domestic rates.

Typical issuers and history
* Issuers include corporations, financial institutions, and governments.
* Historically, issuers from the U.S. and Germany have been significant participants.

Comparable foreign bond types
* Samurai bonds — issued in Japan (JPY)
* Yankee bonds — issued in the United States (USD)
* Maple bonds — issued in Canada (CAD)
* Matador bonds — issued in Spain (EUR)
* Bulldog bonds — issued in the United Kingdom (GBP)

Summary

“Kangaroos” can mean either the stocks in Australia’s All‑Ordinaries Index or AUD‑denominated bonds issued in Australia by foreign entities. The All‑Ordinaries is a market‑cap weighted, broad benchmark measuring price performance of roughly 500 actively traded Australian stocks (excluding dividends). Kangaroo bonds give non‑Australian issuers access to Australian capital and can offer borrowing advantages when local rates are favorable.