I have put small bids (long) on the following six banks and listed them in preference -
ANZ, NAB,CBA,WBC, MQG, BEN.
the reasons -
* the margins on loans should be good, given the cheaper rate at which the banks are now able to obtain money from o'seas...
.
* the ongoing strong residential construction and investment activity...... also higher real estate prices means larger loans, and more income from interest received.....
* the banks are reasonably priced given the current abnormally low interest rate environment....
* one of the reasons given for the banks recent dip in share prices was that for international investors a short Australian banks was a proxy short on china...... so now that news now coming out of china is more positive (as also reflected in the shanghi composite) there is less downward pressure on the banks share prices......
* our markets are in strong upward trend ie. - favourable for longs and all of the banks are showing strong upward momentum also...
the only reason I can think of which is against my current bids is that I am "chasing them" - bidding close to the market price and not at any low point of a trading band...
would others like to tell me where I have got it wrong here ?????
