- Firstly, watch out for a webinar invite today, I will be discussing where to now for key commodities as volatility continue to rise in the sector – Live @ Thursday 7th October at 11.30am AEST with two analysts, Peter O’Connor & Michael Clark
The ASX200 kicked off the week with a bang even though many of us enjoyed a long weekend – a sunny one in Sydney. It’s not often you see CBA rally over 5% in one day but a heavily oversubscribed $6bn buyback, which represents 3.8% of the banks issued capital, was enough to the send the stock within a few percent of its all time high, there were a couple of simple but important points for investors to consider & enjoy:
- We feel the CBA board is working hard for its shareholders looking for the “most efficient and value enhancing strategy to distribute CBA’s surplus capital & franking credits”.
- The buyback was scaled back by a whopping 79.4% due to strong demand for the offer which was completed at a buy back price of $88.52 per share comprised of a $21.66 capital component plus a fully franked dividend of $66.96. For those in a zero tax environment, it’s worth $117.32 inclusive of franking credits, but only for the ~20% that was taken up.
- As outlined over recent weeks MM believes the Australian Banking Sector can drag the ASX200 to fresh all -time highs over the coming weeks / months.
The average gain of the other members of the “Big 4” was over 2% which adds significant weight to the sectors combined tailwind for the index.
MM remains bullish Westpac (WBC) looking for 8-10% upside
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