Doug Goodwille from Kayne Anderson speaks to Drew Meredith from The Inside Network on market thinkers.
While a surging gold price is on hold as the world adjusts to a Trump presidency, all the factors that saw its price rise more than 50 per during his first term in office – trade disputes, fiscal deficits and geopolitical tensions – are almost certainly guaranteed the second time around.
Which bank is the standout post reporting season?
Bank reporting season is almost done with three of the four major banks have already posted their results. WBC, MQG and ANZ have reported. CBA is the remaining bank left to report.
ANZ reported last Wednesday and whilst it was about 4 percent below market expectations, the market was happy. Albeit because the market was expecting a poor result, shares traded lower on the day. Cash earnings of $3.1bn for 1H22 down 3 percent for 2H21. The bank paid a final dividend of 72c which puts them on a 7.5 percent gross yield. Net interest margin fell to 1.58 percent with the increase in costs disappointing due to wage pressure.
Dr. Peter Gardiner from Plato Investment Management says ANZ is the cheapest of the big banks on most measures, including yield.
“NAB had a solid result. Cash earnings were up 8 percent, and the dividend was a big increase 73c which equates to a 6.2 percent gross yield. Because they’ve turned around their systems significantly, they’ve got really impressive loan turnaround times which allowed them to record loan growth of 5.4 percent.”
One other thing to note from NAB is that AUSTRAC isn’t going to issue a fine but there is an enforceable undertaking to ensure compliance. Gardiner says “Westpac was the best result versus expectations. Cash earnings down 1 percent from 2H21. Their NIM was above expectations with weaker volumes. They were also able to keep costs within targets.”
“The last of the major banks was Macquarie which had a fantastic result, 8 percent above expectations. The interim dividend was $3.50 which equates to a 3.9 percent. But the disappointing thing about their result was with guidance. And as a result, the share price fell to match guidance.”
In an increasing interest rate environment, Gardiner says “NAB has guided for every 25bps increase in interest rates, that would be a 2bps in Net Interest Margin. WBC has guided for the RBA cash rate to hit 1.75 percent by the end of the year.”
