The banks want to lock in cheap money before rates rise, this will allow them to make greater profits when rates reach 5%.
2 year term deposits of 3%
5 year term deposits of 4%
The market is anticipating a lot higher interest rates than 4% to be offering that rate now.
Why would you invest in the ASX 200 at 2.5% dividend or 3.55% dividend which is highly volatile when you can make 3% to 4% in the banks. Another rate rise will likely cause a larger fall in the ASX.
Profit margins will fall resulting in lower dividends as the return on investment for bank savings increase.
I believe the market is on the knife edge of a large sell off. Its about time.
market revaluation 75 cents., page-103
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$2.20 |
Change
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Mkt cap ! $2.525B | |||
| Open | High | Low | Value | Volume |
| $2.19 | $2.22 | $2.18 | $5.466M | 2.485M |
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| No. | Vol. | Price($) |
|---|---|---|
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| Price($) | Vol. | No. |
|---|---|---|
| $2.20 | 3452 | 1 |
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