In 2011, CBA, Westpac, NAB and ANZ were all valued higher than Bank of America. Now BofA has a market cap higher than all four combined.… the royal commission, money laundering, fees for no service, housing market downturn, small business loan defaults, household debt at 186% of income - a new record of which Scott Morrison can be proud and………………… dividend cuts has resulted in a halving of capitalisation values. For the foreseeable future paying out >75% earnings to maintain > 5% div yields is a dream.
Subdued economic activity, accelerating unemployment, collapsing rents and falling property values are all eating into the ability to support debt - a debt build up that has compounded under the Liberal government’s neg gearing policy - a policy maintained and supported at a time when all other Western countries have been encouraging households to deleverage.
Loan default provisioning is now the first call on bank cash - in fact the banks are tapping the market, raising T1 capital in the form of perpetuals. Equity shareholders are moving away … with only the CBA valued at a premium to NAV.
Is the halving of capitalisation values the end of this cycle or is this just the end of the beginning….. I suspect the latter. Next leg down Q4/2020 through to Q1/2021 as the size of loan defaults starts to be realised - CBA down 25% from current levels to around $45 / the remaining three to stabilise just below $10… then we’ll see how the balance sheets look
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Last
$134.97 |
Change
0.200(0.15%) |
Mkt cap ! $225.8B |
Open | High | Low | Value | Volume |
$134.37 | $136.03 | $133.51 | $212.5M | 1.575M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
1 | 1000 | $134.95 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$134.98 | 1713 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
1 | 131 | 134.770 |
1 | 2777 | 134.750 |
1 | 335 | 134.710 |
1 | 94 | 134.700 |
1 | 2777 | 134.640 |
Price($) | Vol. | No. |
---|---|---|
134.980 | 1713 | 1 |
135.010 | 1661 | 1 |
135.030 | 609 | 1 |
135.050 | 2259 | 1 |
135.060 | 606 | 1 |
Last trade - 16.10pm 08/10/2024 (20 minute delay) ? |
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