Selling short on the banks was not a good idea
The Commonwealth Bank yesterday reported a cash profit of $4.77 billion for the first half, down 2.1% on the first half last year.
The bank noted a decrease in home loan arrears and a 3.1% reduction in operating expenses. The Bank’s Tier one capital ratio is a healthy 10.1%. The interim dividend is steady at $2 per share fully franked.
Those who sold and short sold the banks late last week had to take some medicine as the majors all rallied strongly following the release of Mr Hayne QC’s recommendations from the Royal Commission.
One may wonder what all the fuss over the past year has been about given the reaction in the market to the recommendations. Indeed, reading through the recommendations there looks to be some positives for the banks.
On to economics, and the Statistics Office released the retail trade number for December which will have retailers and the Reserve Bank wondering what to do. Retail sales fell, yes fell, 0.4% in December to $27 billion. It was no surprise then that the Reserve Bank maintained the interbank rate at 1.5%.
All major bourses in the Northern hemisphere closed higher overnight, the FT100 taking the yellow jersey with a solid 2.1% gain. This leaves our index futures trading 24 points higher at present.
On another note, those holding cryptocurrencies in the Quadriga digital platform should be concerned as the founder has passed away. The problem being that he died being the only person with the password to gain access to the platform.
Alex Moffat is a director at Joseph Palmer & Sons.
When the experts at Next Investors have a stock pick, it may pay to listen.
The Next Investors have been investing in ASX small cap stocks for years, with their best small cap picks yielding returns of 1,200%, 1,120%, 900% and 678%.
They have just revealed their hand-picked, FY2021 stock portfolio of high conviction long-term investments.
Click the link below to see what they are currently investing in.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.