Aust bank’s shares up Bitcoin hits new milestone
AUSTRALIA’s largest bank, Commonwealth Bank, is expected to report a small drop in first-half profit this week, but that hasn’t deterred investors from pouring into its shares and turning it into one of the world’s most expensive banks.
The stock has jumped more than 20 per cent since November, outperforming a 12 per cent rise in the wider market, with the help of investors fleeing China’s battered markets and those switching to equities on expectations of interest rate cuts.
As the market’s second-largest stock, it is benefiting from an outsized share of the money pouring into Australian equities from home and abroad, say analysts and investors.
As a result, Commonwealth Bank is now trading just off its all-time high, valuing it at 21 times forward earnings per share, or nearly double Wall Street giant JPMorgan’s earnings multiple and more than triple HSBC’s.
Its market capitalisation is now roughly double its nearest rival, National Australia Bank.
For investors fleeing China’s stuttering market amid a prolonged property crisis and looking for safe, liquid places to put their money, Australian banks, and in particular CBA as the largest and most wellknown, are an easy pick, said Matthew Haupt, a portfolio manager at Wilson Asset Management.
“Australian banks have been massive beneficiaries of the pull back from China,” he said.
“As people reduce their MSCI Asia exposure, Australian banks are an obvious choice.”
BITCOIN hit the $US50,000 ($F112,000) level for the first time in more than two years as the world’s largest cryptocurrency was buoyed by expectations of interest rate cuts later this year and last month’s regulatory nod for U.S. exchange-traded funds designed to track its price.
The cryptocurrency has risen 16.3 per cent so far this year, on Monday touching its highest since December 27, 2021.
At 12:56 p.m. EST (1756 GMT), bitcoin was up 4.96 per cent on the day at $US49,899 ($F111,958m), having oscillated around the $US50,000 level.
“$50,000 is a significant milestone for bitcoin after the launch of spot ETFs last month not only failed to elicit a move above this key psychological level but led to a 20 per cent selloff,” said Antoni Trenchev, co-founder of crypto lending platform Nexo.
Crypto stocks also enjoyed a boost on Monday, with crypto exchange Coinbase up 4.9 per cent and crypto miners Riot Platforms and Marathon Digital up 10.8 per cent and 11.9 per cent, respectively.