gold, page-29784

Buying any stock is all about the future directions (valuation) and not how much they have made today (past). Clearly a higher capital ratio impinge on growth as the have to retain more net cash as buffer for their loan books. Secondly, they are restricted to a small % of total loans to the rapidly growing property investment loan book so growth in loan is impinged again. Thirdly a levy will take more of that net profit away.

No doubt the banks are rock solid because they will pass on the cost to their mortgagee as they have been consistently doing these past few years. However their growth potential will make their current valuation stretched hence there isn't an urgent need to jam for the entry in this crowded sector. I see banks can only fall in valuation under the present conditions pulling ASX index points down.

The market breadth is an entirely different thing once again. I may take a quick look on the chart to see if more of the ASX200 makeup are rising or falling. As the say 'Sell in may and go away'.