Commonwealth Bank hit an all-time intra-session high of $100.20 yesterday, but couldn’t sustain the push and actually lost 5 cents on the day to end at $99.58.
That was under Tuesday’s close of $99.63 and means the recent run of record closes has ended.
Driving the recent rise is the feeling among investors and analysts that the bank will reveal a big dividend for the final six months of the year to June 30.
The CBA paid the largest interim of the big four at $1.50 and analysts believe that could be repeated for this half, or topped. The CBA reveals its full year result in early August.
Some silly analysts are forecasting a buyback or a special dividend because it has what they think is surplus capital.
But that depends on APRA changing its view that the CBA and other banks have enough capital to meet the pressures of higher defaults in the next year as business slows from the post Covid bounce.
As well regulators remain wary about continuing Covid infections and the latest lockdowns and the worsening situation in Melbourne (and parts of regional Victoria) are reminders that the pandemic and its pressures on business haven’t gone away and that many small and medium businesses do not have the protection of the Jobkeeper scheme to fall back on.
For those reasons buybacks by the big banks won’t happen nor a special dividend, but APRA won’t stand in the way of a higher final for the year if the financial performance of the bank allows it (or on higher finals for the ANZ, Westpac and NAB either).
The CBA now has a market valuation closing on $180 billion and is one of the widely-held stocks in the market. It has more than 800,000 shareholders. The shares are up 16% and 88% since bottoming out in the Covid sell-off in March, 2020.
The CBA’s 88% rebound beats the 62% rise in the ASX 200, but ANZ shares have done better, rising 102% from its lows, NAB shares are up 100% and Westpac 95% (but has rebounded solidly in recent months).
