CBA - Commonwealth Bank of Australia

[stefan]

Wow, what happened? I once predicted a pullback on CBA but I didn't really follow it. Down 3.6% today!

Happy trading

Stefan

[GreatPig]

Stefan,

As I indicated in the reversal pattern thread yesterday, CBA seemed to have formed a double top. All it needed was a drop down through the support line at around $30.80 and that would be it.

Seems to have done that now, with the current price being $29.77.

Cheers,
GP

[ghotib]

There were announcements on Friday (after the market closed?) that NTA for the last 4 years has been revised down. Would that start a selloff?

[stefan]

I'd say investors are very cautious with banks after the NAB correction. The slightest hint of trouble leads to a selloff. Anyway, I guess it won't be all too bad for now. Depends on what follows...

[stefan]

Well, as far as I can see, the reason for the pullback is that CBA has gone ex dividend. Didn't realize that earlier today. So just forget about it. Nothing bad had happened. They are paying $1.04 in dividend and so the stock has pulled back that much.

I therefore re initiate my short term buy for NAB as well...

Happy trading

Stefan

[clowboy]

Hey,

Any thoughts on CBA or the banking sector in general?

[Bingo]

I think that the banking sector will find it hard to maintain its' profit growth. However, the yields are good and profit and dividends will still rise albeit at a slower rate, so unless interest rates have a significant rise they still seem to be excellent to hold. That is you receive a good fully franked dividend and a steady capital gain.

It is interesting to follow the paper reports. Not long ago it was all about the banking sector has had its day and it was time to sell. The bank share prices are up about 7% since then and now I read in the Financial Review to-day that bank shares may rise because as the weight of NCP reduces in the S&P the banks weights will increase and therefore the institutions will need to buy the banks to maintain their weights. This is obiously true of any sector other than NCP.

All in all I am holding and will continue to do so.

I hold ANZ,CBA,STG and WBC. I also hold the unlisted IMB (Illawarra Bld Soc).

Bingo

[jyotirmoy]

below are the links for the common wealth bank which has the
daily/week/month/quater behaviour
please do check

to have a clear image of the link go to view select text size and select largest
http://routeinfosys.com/ex/CBADAILY.jpg
DAILY AVERAGE LINE

http://routeinfosys.com/ex/CBAWEEK.jpg
BUY INDICATION SINCE 18 JAN 2004 AT 30.79$


http://routeinfosys.com/ex/CBAMONTH.jpg
MONTHELY LINE BEHAVIOUR AS TO WHERE THEY STAND I KNOW THE WORKING HOW LOW IT
CAN GO WHEN FALLS FROM THE HIGH


http://routeinfosys.com/ex/CBAMONTHEXCEL.jpg
MONTHELY AVERAGE BEHAVIOUR SINCE DAY ONE WHERE I KNOW LONG TERM BUY AND SELL


http://routeinfosys.com/ex/CBAQUATER.jpg
QUATER LINE BEHAVIOUR

[RichKid]

below are the links for the common wealth bank which has the
daily/week/month/quater behaviour
please do check

to have a clear image of the link go to view select text size and select largest
http://routeinfosys.com/ex/CBADAILY.jpg
DAILY AVERAGE LINE

http://routeinfosys.com/ex/CBAWEEK.jpg
BUY INDICATION SINCE 18 JAN 2004 AT 30.79$


http://routeinfosys.com/ex/CBAMONTH.jpg
MONTHELY LINE BEHAVIOUR AS TO WHERE THEY STAND I KNOW THE WORKING HOW LOW IT
CAN GO WHEN FALLS FROM THE HIGH


http://routeinfosys.com/ex/CBAMONTHEXCEL.jpg
MONTHELY AVERAGE BEHAVIOUR SINCE DAY ONE WHERE I KNOW LONG TERM BUY AND SELL


http://routeinfosys.com/ex/CBAQUATER.jpg
QUATER LINE BEHAVIOUR

Thanks for those links mate but I'm too thick to figure it all out, could you please explain it to me please? THanks!

[dj_ajay]

I think you will be safe with CBA and ANZ. :D

[DTM]

Took a trade on CBA with calls when it hit my support line yesterday and gave a nice 30 cents move at the end of the day. It doesn't look like a strong movement up so will look at getting out today.

[DTM]

And sold out catching a 60 cents move. Gotta love the short term stuff.

Might miss more of an upmove but things are so choppy.

[DTM]

Another view of CBA from a different chart.

CBA seems to have hit long term resistance of $37.75. Can it break through? I doubt it but will wait for tomorrow/next week to confirm this before going short on it.

Having problems posting the chart. Will do it later.

[Julia]

I like the banks. As Bingo said, there's steady growth, good income and franking. I have ANZ, CBA, MBL, plus the smaller but nonetheless good yielding Bendigo Bank, Suncorp and Wide Bay.


Julia

[Rockon2]

DTM.. :)

did the same trick with wbc today,, i'm happy :)

[DTM]

I like the banks. As Bingo said, there's steady growth, good income and franking. I have ANZ, CBA, MBL, plus the smaller but nonetheless good yielding Bendigo Bank, Suncorp and Wide Bay.


Julia

Banks are looking toppy to me right now and won't be suprised if they drop a lot this month. It also feels like that banks have been rerated downwards by institutions the way some of them have been selling. :2twocents

[DTM]

DTM.. :)

did the same trick with wbc today,, i'm happy :)

Well done, nice ranging movement there.

[Kauri]

Thought this was worth a short today...

[Fab]

I like the bank too specially using warrants as leverage. You get all the above mentioned plus leverage.
My only issue at the moment is that I have some CBAIM4 (macquarie issue) and even thought the dividend was due on the 05/04/07 it has not been paid to my account yet. How come an issuer can defer dividend payment, it is not the only time it happens to me with macquarie bank. ABN amro and other warrant issuer all pay on time

[nevieboy]

I like the bank too specially using warrants as leverage. You get all the above mentioned plus leverage.
My only issue at the moment is that I have some CBAIM4 (macquarie issue) and even thought the dividend was due on the 05/04/07 it has not been paid to my account yet. How come an issuer can defer dividend payment, it is not the only time it happens to me with macquarie bank. ABN amro and other warrant issuer all pay on time

Hi Fab.Did you receive your dividend payment yet?
I also am waiting. Nothing as yet.
Cheers Nevieboy.

[josjes]

What's going on with CBA ? It's been on a down trend without a pause since last week (probably 8 days in a row). Compared with the other 3 big banks it has underperformed substantially. They all made a bounce in the last 2 days, but CBA is just refusing to join them. I am thinking CBA was the most overvalued of the 4 is that why it's been harshly dealt with ? Or perhaps the market figures out that it has got more skeleton in the closet by the Centro fiasco ?? Anyone knows the story behind ?

[The Mint Man]

Who knows mate, in a market like this.:confused:
Look at MQG, perfectly good company that has even said that they have hardly, if any, exposure to the US credit crisis but has that saved them, No! If your in for the longer term probably best to ride it out, good companies like this don't stay down forever and will in all likelyhood come back strong once the market/s get this period out of the system.

Cheers:D

[ROE]

I'm skeptical with Aussies banks at a moment because they are too clean with sub-prime .... there maybe be some sub-prime hidden some where in deep dark corner of their book that no one uncover it yet :D.

Every other bank got hit except aussie banks

[josjes]

All three other banks are green and up 1-1.5%. Except CBA again down 1.5%. If anyone knows about rumours in the market , I guess they have some skeleton in closet with sub-prime write-down ?

[ShareIt]

All three other banks are green and up 1-1.5%. Except CBA again down 1.5%. If anyone knows about rumours in the market , I guess they have some skeleton in closet with sub-prime write-down ?

Not sure, but my indicators are showing a possible reversal.... spinning top, positive divergence on the macd... could see an up day tomorrow

[kerosam]

Hi shareit,

thanks for your thoughts.

I looked at the daily & weekly chart (see attached) and still find trending down. Daily chart support was 48.70 but breached today (though she closed higher than 48.70)... weekly chart shows next support could be 46.82... & a possible bounce off that 46.82. :o

:2twocents

[Awesomandy]

Just a general reminder... be very careful if you are trying to catch a faling knife. :)

Although, fundamentally, I really can't see any major changes as of recent times to suggest why CBA should underperform so much when compared to its peers. I think some value is starting to appear.

[Bill M]

I just thought I'd add a comment about CBA. I bought CBA in 1996 for $10.40 a share. In all those years they have paid me handsome dividends and I have never sold. Today as you people know they are $49.40 per share.

Well that is very nice dividends for 12 years and my share price has gone up 460%.

The only thing I can say is that at these prices CBA is a good deal. I've seen many corrections and the Asian crisis since I bought them and they still keep producing bigger and and better than ever.

At today's lows of around $47 odd I nearly bought in again but then it bounced upwards and closed up in the green. I buy when it is ridiculously low.

As a long term investment CBA is one of the best companies on the ASX. Don't worry about short term charts and falling knifes CBA will always give you your dividends and perform in the long run. My personal opinion only but the facts are there just check the prices I bought on 27/05/1996. I will NEVER sell them, good luck.

[ShareIt]

Hi shareit,

thanks for your thoughts.

I looked at the daily & weekly chart (see attached) and still find trending down. Daily chart support was 48.70 but breached today (though she closed higher than 48.70)... weekly chart shows next support could be 46.82... & a possible bounce off that 46.82. :o

:2twocents

Well what do you know... CBA opened 2.5% up.... guess the indicators proved right :-) Overall, the trend is still down, but I look to make trades off 2days holding.

[kengaikl]

I just thought I'd add a comment about CBA. I bought CBA in 1996 for $10.40 a share. In all those years they have paid me handsome dividends and I have never sold. Today as you people know they are $49.40 per share.

Well that is very nice dividends for 12 years and my share price has gone up 460%.

The only thing I can say is that at these prices CBA is a good deal. I've seen many corrections and the Asian crisis since I bought them and they still keep producing bigger and and better than ever.

At today's lows of around $47 odd I nearly bought in again but then it bounced upwards and closed up in the green. I buy when it is ridiculously low.

As a long term investment CBA is one of the best companies on the ASX. Don't worry about short term charts and falling knifes CBA will always give you your dividends and perform in the long run. My personal opinion only but the facts are there just check the prices I bought on 27/05/1996. I will NEVER sell them, good luck.

Your the only person that make any sense in this forum. Everyone has such a short term view of things. People like you are the ones who make serious money on the share market not those who just look at trand lines or what ever. If all investors were like you there wouldnt be all this market turmoil. Fear creates fear right??

[Bill M]

Your the only person that make any sense in this forum. Everyone has such a short term view of things. People like you are the ones who make serious money on the share market not those who just look at trand lines or what ever. If all investors were like you there wouldnt be all this market turmoil. Fear creates fear right??

Thank you for your kind words kengaikl. I just thought I would further add that when I bought the original parcel the fully franked dividends were about 6%. Over the years the dividends went up every year. In the last 12 Months the CBA dividend was $2.56 per share, that is a fully franked dividend of 24.2% on the original outlay. To me that's what sharemarket investing is all about building wealth by buying great companies, cheers.;)

[nitpra]

Past is past. At the moment there seems to be some fear about cba. One broker has mentioned cba will write off some bad load (dont know how much )
when report in few weeks time. In the current environment anything regarding subprime there is a fear. For short trading (2-3 days ) it looks ok but again dont get caught, the announcement may appear any time.

[vishalt]

CBA reports in 2 weeks so we will see.

Who is the mysterious broker who said that? I've been also suspecting that our banks have been having it too good that there was something fishy happening.

Anyway if CBA does get crushed its a bargain, massive dividend + it really is blowing away the competition posed by the other four majors.

[nitpra]

Deutsche Bank:The broker is retaining Hold only because the stock has fallen 18%. This is still a 10% premium to peers and that's a worry. Funding costs and lower wealth management returns are a problem, and increasing bad loans loom as a significant issue. target falls from $54.00 to $51.50. -

[vishalt]

What increasing bad loans? Where did Deutsche get that from? Maybe they are just jealous because their own stock got hammered from 120E to 70E or something.

[The Mint Man]

hey guys,
May be a silly question (had a few;)) but I was just on the CBA site, http://www.commbank.com.au/, and something caught my eye.
In is its page 'tab' (for you tech heads, also known as the 'global metre' I believe) it says 'Commonwealth Bank Group'.
Is this something new or have they always refered to themself as this???:confused: Sounds very Macquarie-esq to me!!!
They will probably even change their stock code to CBG soon too:D:p:

Anyone care to comment?

Cheers:D

EDIT: dont hold, just curious.

[Bill M]

I just thought I'd add a comment about CBA. I bought CBA in 1996 for $10.40 a share. In all those years they have paid me handsome dividends and I have never sold. Today as you people know they are $49.40 per share.

Well that is very nice dividends for 12 years and my share price has gone up 460%.

The only thing I can say is that at these prices CBA is a good deal. I've seen many corrections and the Asian crisis since I bought them and they still keep producing bigger and and better than ever.

At today's lows of around $47 odd I nearly bought in again but then it bounced upwards and closed up in the green. I buy when it is ridiculously low.

As a long term investment CBA is one of the best companies on the ASX. Don't worry about short term charts and falling knifes CBA will always give you your dividends and perform in the long run. My personal opinion only but the facts are there just check the prices I bought on 27/05/1996. I will NEVER sell them, good luck.
Well CBA reported today, increased profits and dividends and at todays prices with dividends to come I bought some more.

[nomore4s]

Well CBA reported today, increased profits and dividends and at todays prices with dividends to come I bought some more.

Will I'm no fundie, I'm a bit surprised at the markets reaction to todays results. Okay results I would've thought considering the current sp weakness and whats been happening to the banks overseas.

I do note though, todays vol is already high for the first hour of trading - nearly as much vol as yesterday already. So while there appears to be sellers around there is also someone willing to buy, will be interesting to see where the close is.

May purchase some more for my long term portfolio as well.

[dhukka]

Obviously the Banking sector is weighing on the market today, CBA's result being a big part of it. They managed to squeeze out eps growth on a fully diluted cash basis of just 3%. Obviously the market was hoping for better.

As expected provisions are on the rise, as shown below, however nowhere near the levels of US banks.


While you guys are sitting on your hands, i'm back into banking stocks this week, bought ANZ , WBC, and picked up CBA @ 51.70 today....



Maybe sitting on your hands wasn't a bad strategy afterall Frank?

[numbercruncher]

I think that was a pretty tame response to a crap result, wait till the masses start defaulting on mortgages and business loans, then itll get Interesting.

Its a funny old world when you earn alot more in deposit with the bank than as a shareholder, and risk free :eek:

[ROE]

I think that was a pretty tame response to a crap result, wait till the masses start defaulting on mortgages and business loans, then itll get Interesting.

Its a funny old world when you earn alot more in deposit with the bank than as a shareholder, and risk free :eek:

it's already started :-) at least in the US

http://business.theage.com.au/subprime-crisis-spreads-to-prime-loans/20080212-1rue.html

[TMC19]

I think that was a pretty tame response to a crap result, wait till the masses start defaulting on mortgages and business loans, then itll get Interesting.

Its a funny old world when you earn alot more in deposit with the bank than as a shareholder, and risk free :eek:

Talk about spreading negativity!! Bloody hell...

You think shipping 7% of the stock price was a tame respones to coming in a little bit short on consensus numbers. CBA's first-half cash PROFIT rose 8 per cent to a record $2.385 billion, Ok so the shakedown in markets and the higher cost of borrowing from credit markets shaved $100 million from its expected pre-tax result. Its not going broke anytime soon and its not even a drop in the ocean to the write downs the American banks had to make.

As regards the masses defaulting on mortgages and business loans - mate your dreaming. This is an Australian bank that has iterated numerous times that it has no exposure to subprime, it has openly admitted that there will be higher costs in borrowing going forward but to state that masses are going to start defaulting on their mortgages is pure rubbish.

If this is the extent to which the biggest Australian bank has suffered during the subprime mess that has plagued the US banks then happy bloody days.

I'm sure your negativity would be welcome in other threads.

[nomore4s]

Talk about spreading negativity!! Bloody hell...

You think shipping 7% of the stock price was a tame respones to coming in a little bit short on consensus numbers. CBA's first-half cash PROFIT rose 8 per cent to a record $2.385 billion, Ok so the shakedown in markets and the higher cost of borrowing from credit markets shaved $100 million from its expected pre-tax result. Its not going broke anytime soon and its not even a drop in the ocean to the write downs the American banks had to make.

As regards the masses defaulting on mortgages and business loans - mate your dreaming. This is an Australian bank that has iterated numerous times that it has no exposure to subprime, it has openly admitted that there will be higher costs in borrowing going forward but to state that masses are going to start defaulting on their mortgages is pure rubbish.

If this is the extent to which the biggest Australian bank has suffered during the subprime mess that has plagued the US banks then happy bloody days.

I'm sure your negativity would be welcome in other threads.

lol, You'll get used to NC he's a bear through and through.

I am surprised at the sell down today, considering the stock is already well off its highs of a couple of months ago on the back of the sub prime mess. I would have thought prices might have dipped a little today, but 6.5% surprises me. But please bear in mind that I have a very limited understanding of Fundimentals.

Maybe the market has just been too used to the results of the bullmarket of the last few years. Things not looking good if any of the other banks actually release negative eps growth now.

From a chartists point of view most, if not all the major banks have now broken long term supports which doesn't bode well for the financials or the market in general.

With alot of companies now struggling to re-finance and cash flows tightening up the good times could well be over, especially with the market now being alot more critical of companies results.

[justjohn]

CBA isn't the only bank going backwards lately .Along with CBA , SGB & MQG reached 52 week lows today:eek:

[oldblue]

CBA's strength is its massive retail deposit base.
I'm not rushing in just yet but I'm picking that there'll be some good buying in this stock in the weeks/months ahead. :cool:

Disc: Hold ANZ/NBA but not CBA.

[Bill M]

A lot of you are thinking short term. I always ask myself where will CBA be in 5 years time? I think the smart ones know he answer.;)

So here we have the biggest and best bank in Australia posting an increased profit and an increased dividend in probably the hardest times since the Government sold it off but the profits are still there.:confused:

What I don't really understand is that the same people that were buying at $62 ex Div are now selling at $47 cum Div............... In my books, its "Absolute Blockheads".:headshake

Up to you guys and gals, I'll hold and collect my original (read earlier posts) outlay 24% dividends and current dividend of 5.5%.... oh yes and tax paid. My dividend is 8% grossed up, sorry the best deposit rate is only 7% so that doesn't run true.

Good luck with your investments, I'm happy happy happy.:)

[cuttlefish]

I'm short at the moment so don't mind if it slumps a bit further. Technically it looks like its fallen off a cliff today so tomorrow will be interesting. In the current credit climate I would have thought there are real risks to the banks both in terms of increased default rates, but also a slowdown in the housing market and possible margins squeezes as rates climb (not sure if the 'extra' rate rise on top of the RBA rises is just a blatant grab at profits, or an indication that things aren't as rosy as they'd like).

[vishalt]

The selloff is a great accumulation bargain.

Analysts always change their excuses and sentiment and defer market directions to what they feel like so fund managers get in more at lower prices.

$1.13 dividend @ $46?

Yes plz.

[dhukka]

Up to you guys and gals, I'll hold and collect my original (read earlier posts) outlay 24% dividends and current dividend of 5.5%.... oh yes and tax paid. My dividend is 8% grossed up, sorry the best deposit rate is only 7% so that doesn't run true.


Good for you Bill, it must be nice to sit and collect a 24% dividend yield on your intial outlay. I agree over the long term you can expect to continue to reap a nice dividend stream from the banks.


So here we have the biggest and best bank in Australia posting an increased profit and an increased dividend in probably the hardest times since the Government sold it off but the profits are still there.:confused:


However I think this stretching it a bit. The eighties nearly took the likes of Westpac down. All the banks were still in the process of repairing themselves when CBA listed on the ASX in 1991, which incidentally was right at the point of the last Australian recession. As you can see from the chart below, the banks drastically improved their balance sheets in the mid to late 90's.

Sure you could make the argument that funding has not been this restrictive since the eighties however this is hardly the toughest environment CBA has faced...at least not yet.

Also, looking at the graph below you can see that impaired assets have just started to tick up slightly and they will continue to go up. Even if Australia avoids a recession, you can expect that ratio to rise back to the spike level we saw in 2001, the peak of last credit cycle in terms of bad debts.

It's easy to forget what happens at cycle turning points, last time round the banks were well capitalized and absorbed higher levels of impaired assets well. At it's peak, news of bankruptcies happened every week and usually one or more of the major banks had exposure.

That is not to say this time round will be a repeat of 2001, it could be milder or much worse, but we are not hearing about elevated rates of corporate defaults that you usually associate with credit cycle peaks apart from the odd mob of hedge fund idiots that leveraged up too far. Again, at least not yet.

However you can't overlook two basic things that are happening now with the banks. Profits are being squeezed and provisions are being raised. IMHO we are much closer to the beginning of this process than the end. Therefore, even though all the major banks are now yielding over 6.0% based on 2008 forecast dividends, I don't think you need to rush in and buy the banks just yet, you'll get plenty of opportunity down the road at attractive prices.:2twocents

[numbercruncher]

I think a household debt graph would compliment that :)

Worth pointing out that household sizes have been dropping as well ;)


18046

Looks like Peak Debt to me :eek: Might be why the Gov has been urging people to slow spending and save ?

[moneymajix]

Some quotes from the Eureka Report today.


CBA is one of the best-protected banks against the credit crunch with 54% of its funding coming from retail and business deposits. Other banks can be expected to face even bigger increases in funding costs.



The market took a dim view of the result, marking the stock down below $47.50, a 52-week low. CBA has had a steep fall from its recent high of $62.16 in November. Has the market been too hard on CBA? We will know in by early May. The rest of the banking sector operates on a different reporting cycle to CBA, with their financial year ending on September 30. The interim results for ANZ, NAB, St George and Westpac (for the six months to March) are not due for another three months.

The market didn't respond well today and the stock was down below $47.50, a 52-week low.

CBA recent high of $62.16 in November, 2007.

[ShareIt]

I think Technical Analysis reads into this well... As you can see, there was a desending triangle (making lower highs) with a support at around $48.50... that support was clearly broken on high volume, so I believe it will hit around the $44 mark over then next week or so before it finds some decent support...:confused:

[Buffettology]

I think Technical Analysis reads into this well... As you can see, there was a desending triangle (making lower highs) with a support at around $48.50... that support was clearly broken on high volume, so I believe it will hit around the $44 mark over then next week or so before it finds some decent support...:confused:

Definately agree, TA reads into the CBA case extremelly well! Support around $48 which was clearly broken and on high volume as you say and RSI is still above 30 which indicates its not completely oversold yet. Next support a bit above $44.

[Buffettology]

Definately agree, TA reads into the CBA case extremelly well! Support around $48 which was clearly broken and on high volume as you say and RSI is still above 30 which indicates its not completely oversold yet. Next support a bit above $44.

Though, I do note, it appears there is a bullish crossover on MACD.

Though the decending triangle and support broken is far stronger than this signal.

[ShareIt]

Though, I do note, it appears there is a bullish crossover on MACD.

Though the decending triangle and support broken is far stronger than this signal.

Quite right about the MACD crossover, it's a false signal because a bounded indicator fails to confirm it... RSI is not making higher highs, but rather lower highs.

[numbercruncher]

Falling share price is simply reflecting rapidly growing risk, imho.


THE country's leading banks are thought to have an exposure of almost $5.5 billion to five of the most debt-laden and financially troubled companies, in a sign of the growing pressures corporate borrowers are placing on lenders.

With the Commonwealth Bank still reeling from the market's reaction to the impact of increased bad debt provisions on its first-half profits, new estimates from industry analysts underlined the fallout from a potential loan failure by one or more of the prominent businesses.

The list includes Centro Property Group, which will unveil a short-term financing lifeline from its banks today, the fund manager MFS, the US mortgage lender Countrywide Financial, the investment combine Allco Finance and its offshoot Allco Principals Trust.

Of the $5.45 billion lent to those companies, Commonwealth has provided the most money, $1.7 billion.


http://business.smh.com.au/big-banks-face-55b-risky-debt-exposure/20080214-1sbu.html

[cuttlefish]

One of my reasons for shorting this (via puts now partly closed) is that, apart from the glaring technical situation, and inaddition to the risk of increased defaults, lack of ability to raise capital for lending, possible margin squeezes in rising rate environment and effect of housing/economic downturn on business volumes, the other factor to consider is that the high dividend yield in comparison to other investments is now not looking as attractive comparitively speaking. As interest rates rise there are safer places to put money for a high yield - thus stocks that are primarily yield based investments tend to come down in price the same way that bonds come down in price as rates rise.

Put simply - in the current environment banks are no longer a low risk, high yield investment - they are becoming a higher risk, lower comparitive yield investment as rates rise.

[TMC19]

Falling share price is simply reflecting rapidly growing risk, imho.



http://business.smh.com.au/big-banks-face-55b-risky-debt-exposure/20080214-1sbu.html

YAWN. Nothing new here. The SMH wheeled out the same story in January. Simple media manipulation - playing to the masses. CBA getting coverage for posting a subdued profit and the media jumping on the bandwagon.

[numbercruncher]

YAWN. Nothing new here. The SMH wheeled out the same story in January. Simple media manipulation - playing to the masses. CBA getting coverage for posting a subdued profit and the media jumping on the bandwagon.

Perhaps but combined with dissappointing profits, and with defaults probably rising at a faster percentage clip than new loans, combined with worldwide economic woes .....

CBA is in a great position considering its massive retail deposits (comparitive to others), hence why I bank with them, probably the safest out of all the banks in the land.

If rising interest rates start causing a tide of defaulting across the private and commercial sectors there will be tons more pain.imho.

[wavepicker]

This one has been battered of late. Looks like it maybe coming into a low in the next few days for it's biggest countertrend rally since the decline started. A clear 5 wave decline almost complete as well as a Fib turn date for 18th Feb and another critical one on the 11th March(along with the broader market)
Let's see how it goes the next coupe of days...

[josjes]

Wavepicker, would you care to explain how you get the Fib date of 18 Feb and 11 Mar for CBA ? 18 Feb is its ex-div date for $1.13 so target of $44.2-45 is achievable.

[wavepicker]

Wavepicker, would you care to explain how you get the Fib date of 18 Feb and 11 Mar for CBA ? 18 Feb is its ex-div date for $1.13 so target of $44.2-45 is achievable.


Hello josjes,


Thanks for the Divvy info, had no idea it was due and adds more weight to the analysis.
I have very strong Fib Clusters at both 18th Feb and 11th March. Don't have time to post how those dates were calculated ATM, but will do so perhaps tommorow. The 11th March date seems to coincide nicely the analysis made in the XAO Analysis thread a weeks ago, see links below:

http://www.aussiestockforums.com/forums/showpost.php?p=258027&postcount=2842

http://www.aussiestockforums.com/forums/showpost.php?p=258028&postcount=2843

Cheers

[jet328]

This one has been battered of late. Looks like it maybe coming into a low in the next few days for it's biggest countertrend rally since the decline started. A clear 5 wave decline almost complete as well as a Fib turn date for 18th Feb and another critical one on the 11th March(along with the broader market)
Let's see how it goes the next coupe of days...

CBA goes ex-div tomorrow, so I don't like your chances of it turning tomorrow. Dividend is $1.13 fully franked

[wavepicker]

CBA goes ex-div tomorrow, so I don't like your chances of it turning tomorrow. Dividend is $1.13 fully franked

To the contrary, it's perfect. What we want to see is a fall into that date. If it falls into that date chances are it might see the low tommorow. My dates are plus or minus a day, the reason for this is because it depends what time of the day a high or actually occured in the past that determines the future probability. A turn in the morning for example 2-3 months ago, can add an extra day when doing fibonacci expansions in forward timeframes.

[Uncle Festivus]

To the contrary, it's perfect. What we want to see is a fall into that date. If it falls into that date chances are it might see the low tommorow. My dates are plus or minus a day, the reason for this is because it depends what time of the day a high or actually occured in the past that determines the future probability. A turn in the morning for example 2-3 months ago, can add an extra day when doing fibonacci expansions in forward timeframes.

Well we got the ex div sell off plus a little bit more overcorrection (4365), presenting what I think is a pretty good short term trade, and I have taken positions at these levels for a 'sympathy'? rally, which is happening as I type. Extraordinary times but opportunities to go long are always there.

From the top @ 62 it's fallen some 30% or more in 3 months. Something about throwing the baby out with the bathwater? Put it this way, if CBA tanks from here we are all in big trouble as it would imply the global shake-out has finally hit Oz in a tangible way.

WP, is your upside target and timescale $50 plus on/near 11.3?

[M34N]

Well we got the ex div sell off plus a little bit more overcorrection (4365), presenting what I think is a pretty good short term trade, and I have taken positions at these levels for a 'sympathy'? rally, which is happening as I type. Extraordinary times but opportunities to go long are always there.

From the top @ 62 it's fallen some 30% or more in 3 months. Something about throwing the baby out with the bathwater? Put it this way, if CBA tanks from here we are all in big trouble as it would imply the global shake-out has finally hit Oz in a tangible way.

WP, is your upside target and timescale $50 plus on/near 11.3?
I agree, overboard indeed. But it's more just the market factoring in a "worst case scenario" price, so any positive news during this period will lead to big rallies. For I remember about a month ago, there was a day when the market went down yet the biggest gainers on the ASX200 were CBA, ANZ and NAB -- something extremely rare.

Strange times we live in, indeed. Record profits, record dividend payments, yet exaggerated selling. You can't win in these market conditions.

If it goes down again tomorrow I'm definitely gonna buy some, CBA @ $44.00 is overdone, hasn't seen that price since at least mid-2006.

[cuttlefish]

sounds like knife catching to me. As stated earlier in the thread - the comparitive attraction of the banks high yield diminishes as interest rates rise, and the banks are also facing various other risks at the moment. I've still got an open short position (partly closed the other day to cover the cost so the rest is free carried) - until it retraces I'll keep it open - there's no reason why it can't keep going down imo - so I'll stick with the trend for the time being until it retraces or volatility drops off.

[M34N]

sounds like knife catching to me. As stated earlier in the thread - the comparitive attraction of the banks high yield diminishes as interest rates rise, and the banks are also facing various other risks at the moment. I've still got an open short position (partly closed the other day to cover the cost so the rest is free carried) - until it retraces I'll keep it open - there's no reason why it can't keep going down imo - so I'll stick with the trend for the time being until it retraces or volatility drops off.
$1.13 fully franked dividend at $44.00 a stock? Are you for real? This is a great stock, CBA has been a proven performer for over a decade, and if any bank can ride out this turbulence, it's this one. I personally think this price is cheap, as are many banks, and am accumulating them because, eventually, they're going to come back -- as to when, who knows. But with these dividends and their record profits, I don't believe these sell-offs are warranted IMO.

But again, time will tell. For long term investors, "knife catching" is no real biggie, I've done it many times and eventually people will see how overdone this latest sell-off has been. :2twocents

[ROE]

$1.13 fully franked dividend at $44.00 a stock? Are you for real? This is a great stock, CBA has been a proven performer for over a decade, and if any bank can ride out this turbulence, it's this one. I personally think this price is cheap, as are many banks, and am accumulating them because, eventually, they're going to come back -- as to when, who knows. But with these dividends and their record profits, I don't believe these sell-offs are warranted IMO.

But again, time will tell. For long term investors, "knife catching" is no real biggie, I've done it many times and eventually people will see how overdone this latest sell-off has been. :2twocents

If you compared the 4 big banks.. I think CBA doesn't look as attractive as the others... and dont be fooled by the big dividends payment. Dividend can change at any time and with the subprime still yet to play out banks will be under plenty of down side for the next year or two.

read AFR "When banks feel the pain" over the weekend to see what lying ahead for them.

[M34N]

If you compared the 4 big banks.. I think CBA doesn't look as attractive as the others... and dont be fooled by the big dividends payment. Dividend can change at any time and with the subprime still yet to play out banks will be under plenty of down side for the next year or two.

read AFR "When banks feel the pain" over the weekend to see what lying ahead for them.
CBA has always in the past performed very well, and I don't see what has fundamentally changed for people to dump this stock in favour for another bank? What does any other big 4 bank have to offer that CBA doesn't?

ANZ: $22.50 @ 74c p/share = 3.29%
NAB: $29.50 @ 95c p/share = 3.22%
WBC: $22.50 @ 68c p/share = 3.02%
CBA: $44.00 @ 149c p/share = 3.39%
*NB: using Final Dividend prices to compare fairly

They're all roughly the same, so I don't understand people justifying comments like "doesn't look as attractive as the others". If any of the banks will withstand the storm, why would CBA be any worse off than any other of the banks? No-one has explained that.

[cuttlefish]

The banks were very good value in the early 90's when they were yielding 8%+ fully franked while interest rates were down around 6%. Westpac was under $3 from memory when Packer bought into it. I have vague recollections of NAB yielding 11% but that must have been a grossed up yield surely.

[dhukka]

$1.13 fully franked dividend at $44.00 a stock? Are you for real? This is a great stock, CBA has been a proven performer for over a decade, and if any bank can ride out this turbulence, it's this one. I personally think this price is cheap, as are many banks, and am accumulating them because, eventually, they're going to come back -- as to when, who knows. But with these dividends and their record profits, I don't believe these sell-offs are warranted IMO.

But again, time will tell. For long term investors, "knife catching" is no real biggie, I've done it many times and eventually people will see how overdone this latest sell-off has been. :2twocents


Other than the dividend and the current price, do you have any reason to think this is a great stock? The news out of ANZ today is just the beginning in what will be a steady stream of rising credit quality problems. It will start out as a trickle but gain momentum and will last at least for the next 12 months.

This is just the normal course of events as we move into the worst part of the credit cycle. However, given that the biggest credit bubble in history is imploding , this credit cycle could turn out to be anything but normal.

There are plenty of companies out there with growing earnings, that have attractive dividend yields that are not facing the headwinds that the banks will be facing in the medium term.

[M34N]

Other than the dividend and the current price, do you have any reason to think this is a great stock? The news out of ANZ today is just the beginning in what will be a steady stream of rising credit quality problems. It will start out as a trickle but gain momentum and will last at least for the next 12 months.

This is just the normal course of events as we move into the worst part of the credit cycle. However, given that the biggest credit bubble in history is imploding , this credit cycle could turn out to be anything but normal.

There are plenty of companies out there with growing earnings, that have attractive dividend yields that are not facing the headwinds that the banks will be facing in the medium term.
For a long term investment, why would you knock it back? Yielding these dividends, I'm happy to hold no worries.

As they say, buy when there's blood in the streets :) I'm sure many of you know how to make money, probably more so than me, but I invest only when everyone else is running away.

Like everything in the market, eventually everyone starts to see the reality, and right now, it's all blurry and everyone is scared of the banks. Sounds like a good time to invest for the long term. I hope more people sell it down, only makes it cheaper for me to buy in and ride out this storm. Again, only my :2twocents, I've invested in worse times.

[osmosis]

I was just looking at the course of sales for CBA today and noticed this:

07:05:43 AM 23.000 5,000 115,000.00 C

I assume there is a simple answer, but why did this sale occur @$23?

Thanks for the reply.

[MRC & Co]

Sounds like there are a few Buffett lemmings around, without actually analysing "his techniques" and applying them.

Good luck to all though!

Just be VERY VERY careful at this moment! I think a LOT of fingers are going to get burnt before we see the end of this! Some absolutely HUGE moves following profit downgrades have occured so far and these profit downgrades may well ripple into the near future.

Many prices have been derived from the potential for big earnings growth, which does not appear to be happening. I have actually been shocked by the extent by which this slowdown seems to have actually hit the ASX companies, which will now be reflected in the rest of the indicators in the coming months, which may well cause another downturn in the market. The stockmarket is a "leading" indicator afterall, no?

[sails]

I was just looking at the course of sales for CBA today and noticed this:

07:05:43 AM 23.000 5,000 115,000.00 C

I assume there is a simple answer, but why did this sale occur @$23?

Thanks for the reply.

I believe CBA went ex-div today and most in-the-money call options (i.e.the strikes below where CBA closed yesterday = day before ex-div) would have been exercised. These usually show up around 7am the next morning. It it is possible the "C" at then end could mean "calls". Obviously someone owned some $23 calls and they have cashed in to get the dividend.

Over the next couple of days, it is quite likely to see a large number of in-the-money puts (i.e. put option strikes trading above CBA's price) being exercised and these will show up again around 7am.

Hope this helps!

[refined silver]

The news out of ANZ today is just the beginning in what will be a steady stream of rising credit quality problems. It will start out as a trickle but gain momentum and will last at least for the next 12 months.

This is just the normal course of events as we move into the worst part of the credit cycle. However, given that the biggest credit bubble in history is imploding , this credit cycle could turn out to be anything but normal.
The ANZ is in trouble with Credit Default Swaps an OTC derivative which according to the Bank of International Settlements (BIS) is a major component of the more than $500 TRILLION of unregulated, non-clearing house guaranteed, private contracts and therefore without a market, pile of toxic OTC derivatives. So far the first part of the pile the CDOs and sub-prime derivatives have hit the fan, looks like the second much larger pile might be starting to shake.

Sorry to post scary stuff, I know most people with bank shares are conservative risk averse people. However, if we really are in melt down mode the financial sector is where the nuclear reaction is epicentred.

The chart below shows the behind the scenes borrowing going on right now in the financial sector. Compare it to 1929, 1974, 1987, 2000, 9/11, etc...
:eek7:

[So_Cynical]

Thats a hell of a chart...real OMG stuff...even adjusted for inflation its a worse situation than the 1920's crash.:eek7:

[ROE]

CBA has always in the past performed very well, and I don't see what has fundamentally changed for people to dump this stock in favour for another bank? What does any other big 4 bank have to offer that CBA doesn't?

ANZ: $22.50 @ 74c p/share = 3.29%
NAB: $29.50 @ 95c p/share = 3.22%
WBC: $22.50 @ 68c p/share = 3.02%
CBA: $44.00 @ 149c p/share = 3.39%
*NB: using Final Dividend prices to compare fairly

They're all roughly the same, so I don't understand people justifying comments like "doesn't look as attractive as the others". If any of the banks will withstand the storm, why would CBA be any worse off than any other of the banks? No-one has explained that.

Basing on dividend along doest justify...here is my quick reason why say WBC is better than CBA. For a start they employ better equity than CBA, they are also a smaller player but big enough to compete with CBA but small enough so if there is a defection in customers based WDC will get hit less than CBA.
smaller player has more room to grow than the bigger one.

Look at JB Hi-Fi and people like WOW and Harvey Norman and you can see small player if they have a good business model they have much better growth prospect.

WBC ROE
15.3 16.1 19.0 19.1 18.8 15.1 16.5 19.3 21.6 21.7

CBA ROE
18.6 17.7 10.0 13.5 14.3 10.2 11.7 16.4 18.2 18.4

PS I dont own any banking stock at this time in my portfolio because I think they all over price and too much of a market darling. so I patiently wait till the day I think it's justify their price and I buy. Even at these price I haven't even thinking about getting them just yet.

[treefrog]

PS I dont own any banking stock at this time in my portfolio because I think they all over price and too much of a market darling. so I patiently wait till the day I think it's justify their price and I buy. Even at these price I haven't even thinking about getting them just yet.

pretty much agree roe, major correction on financials underway and best the bulls will see this year is an exhaustion rally as its getting into some serious oversold territory
Haven't seen a major index or bluey recover fully in quicktime from a correction such as this - one hel l of a head of steam southbound atm

[ZacR]

In my humble opinion, no-one is going to agree on whether or not @ $44 a share is value for Commonwealth Bank.

If you are a long term investor there is no way you can tell me that $44 is not a bargain. A cataclysmic event or the monetary system as we know it would have to collapse for The Commonwealth Bank to completely 'tank'.
It is only going to go up, guaranteed, in the long term. Above and beyond its $62 high. The 1920 collapse recovered. The 1987 collapse recovered. This will recover.

If you are a short term investor/ trader $44 is very realistically NOT a bargain or the lowest the share could possibly easily fall - if you are talking weeks/ months depending on how much the current credit market, US economy etc etc is travelling...

As for saying that the Commonwealth Bank is not one of the most stable of the big 5. Please...

:2twocents :)

[Bill M]

In my humble opinion, no-one is going to agree on whether or not @ $44 a share is value for Commonwealth Bank.

If you are a long term investor there is no way you can tell me that $44 is not a bargain. A cataclysmic event or the monetary system as we know it would have to collapse for The Commonwealth Bank to completely 'tank'.
It is only going to go up, guaranteed, in the long term. Above and beyond its $62 high. The 1920 collapse recovered. The 1987 collapse recovered. This will recover.

If you are a short term investor/ trader $44 is very realistically NOT a bargain or the lowest the share could possibly easily fall - if you are talking weeks/ months depending on how much the current credit market, US economy etc etc is travelling...

As for saying that the Commonwealth Bank is not one of the most stable of the big 5. Please...

:2twocents :)
I could not agree with you more. Too many people on the board think short term. I have been invested in the market since 1987, I've seen crashes, bear markets, corrections, Asian financial Crisis's, terrorist attacks and host of doom and gloom stories through all those years and yet CBA is still here.

Even with all this garbage going on now in the financial sector my original investment in CBA from when I bought in 1996 is up 450%, yes 450% and in all those years I keep on getting the "goodies" those sweet tax paid dividends. This year the day before ex dividend date I bought another large parcel for myself and I will get the current dividend plus all the dividends that will come in the future. CBA will come out of this in the future and I have no doubt that they will go up from these levels, short term I don't care. Think long term, not short term and you will always come out in front.

[ROE]

I could not agree with you more. Too many people on the board think short term. I have been invested in the market since 1987, I've seen crashes, bear markets, corrections, Asian financial Crisis's, terrorist attacks and host of doom and gloom stories through all those years and yet CBA is still here.

Even with all this garbage going on now in the financial sector my original investment in CBA from when I bought in 1996 is up 450%, yes 450% and in all those years I keep on getting the "goodies" those sweet tax paid dividends. This year the day before ex dividend date I bought another large parcel for myself and I will get the current dividend plus all the dividends that will come in the future. CBA will come out of this in the future and I have no doubt that they will go up from these levels, short term I don't care. Think long term, not short term and you will always come out in front.

You can say that for most blue chip company, WOW, WDC, CSL, COH and many others. The big distinction is at what price you pay for a stock is critical for your return.. If I can get a stock for $10 dollars and you get it for $13 my return going to exceed your at whatever angle you looking at it.

if stock go to $11 and sit there for a year, my dividend payout compared to price is greater and I'm up 10% you going backward 15% ..come second year it go to 13 bucks I'm up 30% you break even and the compounding effect make it so much better if you pay a lower price.

That why people like Warren Buffett get extra-ordinary return because the price they pay is critical to their success.

[MRC & Co]

Anyone think technically, this could be a turnaround? Doji cross followed by a hammer?

Possibility, even if only very slight chance!

Fundamentally, still too expensive.

ROE is only around 18, will fall in the coming years due to smaller earnings growth, risk is high for a bank in this current climate and book value is not anywhere near its current price.

Just dont see see much point of getting on CBA at this current time, perhaps short-term if this is a quick turnaround and that gap created yesterday is filled (but is it a runaway gap or an exhaustion gap? Though, volume doesnt appear to point to either), but I think this will see some further hammering before its a viable long-termer.

Just a few thoughts.

[dhukka]

I could not agree with you more. Too many people on the board think short term. I have been invested in the market since 1987, I've seen crashes, bear markets, corrections, Asian financial Crisis's, terrorist attacks and host of doom and gloom stories through all those years and yet CBA is still here.

Even with all this garbage going on now in the financial sector my original investment in CBA from when I bought in 1996 is up 450%, yes 450% and in all those years I keep on getting the "goodies" those sweet tax paid dividends. This year the day before ex dividend date I bought another large parcel for myself and I will get the current dividend plus all the dividends that will come in the future. CBA will come out of this in the future and I have no doubt that they will go up from these levels, short term I don't care. Think long term, not short term and you will always come out in front.

I don't think anyone would argue about the benefit of taking a long term view. If I bought CBA in 1996 I wouldn't sell either, however I question the wisdom of buying at current prices. The banks are going into a cyclical downturn. Profit growth will flatten if not go backwards over the coming 12 months and bad debts will rise.

It's not that CBA is a bad company but that there are other stocks that do not have the headwinds the banks will be facing over the next 12 months and are more attractively priced.

[Uncle Festivus]

Investing was for the bull, now it's trading time. CBA a great day trade at present.

[wavepicker]

Investing was for the bull, now it's trading time. CBA a great day trade at present.

Yeah, bought some call options on monday arvo. Certainly is a traders market at present and timing is paramount in this sort of environemnt. However IMO this market will find a reasonable low in April for a more sustained rally into next year but thereafter for choppiness to contibue for some time.

[refined silver]

If you are a long term investor there is no way you can tell me that $44 is not a bargain. A cataclysmic event or the monetary system as we know it would have to collapse for The Commonwealth Bank to completely 'tank'.
It is only going to go up, guaranteed, in the long term. Above and beyond its $62 high. The 1920 collapse recovered. The 1987 collapse recovered. This will recover. :2twocents :)

The 1929 collapse did recover. In 1954 the DOW hit the same level again.

1987 was a bull market correction, not a change of an 18 yr secular trend.

In 1966 stocks went sideways for 16 yrs til 1982, but that was in a decade of high inflation. In real terms in lost 75%!

The Nasdaq is still down over 50% 8 years later.

Its an absolute fallacy stocks always go up. Over the last 100 years, they have tended to go in 15-20 yr long term cycles. Commodities tend to be countercyclical. In other words, while paper stocks are going down 66-80, commodities are going up, when paper goes up 1982-2000, commodities go down, and from 2000 on while commods go up, paper stocks/bonds etc tend at best to sideways trends, but allowing for inflation lose money.

Aus markets are a bit muddled because of the high proportion of commodity based stocks which helps the whole economy.

In real terms CBA is not guaranteed to go up at all.

If you want some reading on these long cycles with charts etc, I will post them.

[MRC & Co]

Investing was for the bull, now it's trading time. CBA a great day trade at present.

To short or to go long?

But I agree, the market definately dictates what time it is, you just have to adapt to it to survive!

[ShareIt]

Anyone think technically, this could be a turnaround? Doji cross followed by a hammer?

If you look at a weekly chart, it appears that a hammer is forming and we have RSI oversold. I would wait for confirmation on the turn before buying up as this stock is still in a down trend. In fact, it's almost free falling! $41 could prove to be good support.. next one down looks to be $37... just have to wait and see!

[MRC & Co]

If you look at a weekly chart, it appears that a hammer is forming and we have RSI oversold. I would wait for confirmation on the turn before buying up as this stock is still in a down trend. In fact, it's almost free falling! $41 could prove to be good support.. next one down looks to be $37... just have to wait and see!

Yeh, I still wouldnt buy this one, banks got SMASHED today! They are really under the "hammer" themselves ATM. Would far prefer some of the commodity stocks currently on good runs and nearing production. Such as EQN (made 15% on this one in a week so far) and SGX. Also, MCR appears to be headed for a good run, with good profit results released (one of the very few in this latest reporting period). See how we go, but the banks are a definate for finger burning at the moment! Infact, I should have started shorting them LONG ago! Idiotic not too! But there still could be further room with all this fear out there and the fact that its not nearly over yet.........just how far will it go...........may be worse than we think and the banks are going to continue to take the brunt of it, since afterall, they are really amongst the roots of the problem.............

[cuttlefish]

I took a bit more profit on my short position in the middle of the day - the options are starting to get towards the pointier end of theta decay and a recovery would have reduced IV's as well. Unfortunately the latter part of the day proved that to be a bad idea but at least some of the position is still open (60% closed, profitable, 40% open free carried). Still learning about options - I don't regret the partial profit taking - the options were well in the money so delta was on my side, but any reversal would have killed delta, theta was getting to the pointy end so wouldn't save it and IV's (vega) would also have dropped off with a reversal. (and the accelerated drop into the close means the exact opposite has occurred - except for theta, all other factors (delta, gamma and vega) I'm assuming would be well increased in the last half hour trade adding to the value of the position, but who knows what overnight and tomorrow will bring).

[ShareIt]

Shorting CBA might not be such a good idea now... the risk/reward ratio wouldn't be worth it as it is well off it's resistance zone of about $48... waiting for a correction and test of resistance is a much better risk with a large trading range down to $43 so far.

[treefrog]

Shorting CBA might not be such a good idea now... the risk/reward ratio wouldn't be worth it as it is well off it's resistance zone of about $48... waiting for a correction and test of resistance is a much better risk with a large trading range down to $43 so far.

agrees 100% - would not short here - look instead for start of lift back to $52 - the blue bit; but first target would be 38% retrace of last drop - hey that's $50 - too easy!!

[M34N]

agrees 100% - would not short here - look instead for start of lift back to $52 - the blue bit; but first target would be 38% retrace of last drop - hey that's $50 - too easy!!
Agree, even in the short term this stock (along with all the other financials) is just ridiculously oversold, we should see a rebound eventually. Like others have said, fundamentally, Australian banks are run so well that even with major write-downs because of bad US sub-prime loans, they still make big profits. US banks are posting big losses, and are down roughly the same % as Aussie banks -- how does that make sense? Our interest rates are going up, and the economy here is still booming, unemployment at record lows, record high wages -- sounds like the economy here is fine to me. Selling on news of record profits and dividends? Things don't add up.

I guess markets are just factoring in a "worst case scenario" for financials, not based on any real logic, just people getting out "in case" something bad happens next. This is the best time to invest IMO, even Babcock rallied hard today, I expect some rebounding to occur soon.

FWIW, I bought some CBA at $42.50 at the open this morning, looking to go in further over the next few weeks if it goes down further, set a sell at around $38.00 to protect myself, seems to be a safe price for now. Only time will tell!

[lucifuge]

1. The US subprime will continue for some time. This is due to two main factors; one, some financials continue to reveal problems that have been deliberately understated (or concealed), secondly the resulting ongoing herd 'fear' as a consequence.

2. The link in Aussie banks with lending with US banks.

(1.) and (2.) combined will effectuate further drops in the majors banks. It's really that simple. Those waiting for a dramatic return to normal levels have a very long wait on their hands. Any arrest short-term in the declining trend(s) will be extremely shaky.

[dhukka]

To the contrary, it's perfect. What we want to see is a fall into that date. If it falls into that date chances are it might see the low tommorow. My dates are plus or minus a day, the reason for this is because it depends what time of the day a high or actually occured in the past that determines the future probability. A turn in the morning for example 2-3 months ago, can add an extra day when doing fibonacci expansions in forward timeframes.

Well it definitely fell into 18th, as you would expect when a stock goes ex-div however it has continued to go lower. Was Mr Fibonacci telling fibs?

[Uncle Festivus]

To short or to go long?

But I agree, the market definately dictates what time it is, you just have to adapt to it to survive!

Both. +- 2% up or down then I look for the woody or the waterfall on the intraminute.

Short term I think the daily range is implying some sort of capitulation of the traders and nervous hands and possibly an accumulation time? Depends on your timeframe as per the 2 charts below. Has it oversold? How deep are your pockets?

To put things in perspective, have the current global issues that may affect CBA been over priced in?

[josjes]

Both. +- 2% up or down then I look for the woody or the waterfall on the intraminute.

Short term I think the daily range is implying some sort of capitulation of the traders and nervous hands and possibly an accumulation time? Depends on your timeframe as per the 2 charts below. Has it oversold? How deep are your pockets?

To put things in perspective, have the current global issues that may affect CBA been over priced in?

Yes, study the trend of DOW and FTSE. Where they lead we follow. At the moment, market is basically being driven by one factor. The fate of the Monoline Insurers/Bond Insurers, ie. MBIA AMBAC and the like.
Where these company shares price lead, Financial follows. Where financial leads, the whole market follows. Last night MBIA closed up 4%. So it looks like market is placing bet that short term wise, there will be satisfactory solution at least. I will place my 'bet' on the market breaking the symmetrical triangle up north and we will get a nice rebound up for at least till mid-March. Until then the market will get a reality hit on the real issue of recession and concerted global growth slow down. Watch out for commodities in mid-March then.
As my quote in the XAO Analysis few days ago, the market is being driven by these Monoline / bond insurance businesses.

Uncle, we have good news coming out of US as a catalyst to kick bank shares up for the next few weeks.
AMBAC share went up 16% on the rumour that it will get a lifline to shore up its capital. The whole financial sector got a nice bounce 4% in the last half hour of trading. Aussie banks will up at least 2-3% Monday I reckon.
Just go along with the ride for a few weeks until we found more write downs on the banks balance sheets.

[Uncle Festivus]

Yes, it's a knife edge for the US banking system generally - how deep are their pockets???

[wavepicker]

Well it definitely fell into 18th, as you would expect when a stock goes ex-div however it has continued to go lower. Was Mr Fibonacci telling fibs?

Absolutely not!! LOL. Mr Fibonnacci cannot fail. Only my intepretation of Mr Fibonacci fails on occasion, especially when there is more than one possibility!! So you see I told the fibs, hopefully I won't tell as many fibs in the future and improve!!.

Nevertheless next week should be better for the banks. It's always nice to get into something bang on target both in price and time, unfortunately does not happen all the time. Within a few days is satisfactory though. Not too worried at this stage, went long 43.65, and will endure a little drawdown.

Cheers

[josjes]

Absolutely not!! LOL. Mr Fibonnacci cannot fail. Only my intepretation of Mr Fibonacci fails on occasion, especially when there is more than one possibility!! So you see I told the fibs, hopefully I won't tell as many fibs in the future and improve!!.

Nevertheless next week should be better for the banks. It's always nice to get into something bang on target both in price and time, unfortunately does not happen all the time. Within a few days is satisfactory though. Not too worried at this stage, went long 43.65, and will endure a little drawdown.

Cheers
so what is wrong with the fibs prediction wavepicker, esp. timewise, as it was quite off the predicted time 18/2 compared to 22/2. Just interested to know and learn too. Was reading your explaination on XAO analysis thread that in bear trend, the time contract further when price is falling which is opposite of bull trend. Is this the reason ?

[dhukka]

Absolutely not!! LOL. Mr Fibonnacci cannot fail. Only my intepretation of Mr Fibonacci fails on occasion, especially when there is more than one possibility!! So you see I told the fibs, hopefully I won't tell as many fibs in the future and improve!!.

Nevertheless next week should be better for the banks. It's always nice to get into something bang on target both in price and time, unfortunately does not happen all the time. Within a few days is satisfactory though. Not too worried at this stage, went long 43.65, and will endure a little drawdown.

Cheers

It looks as though you'll get a nice bounce on the back of the rumoured AMBAC bailout on Monday, even if it is only temporary.

[wavepicker]

so what is wrong with the fibs prediction wavepicker, esp. timewise, as it was quite off the predicted time 18/2 compared to 22/2. Just interested to know and learn too. Was reading your explaination on XAO analysis thread that in bear trend, the time contract further when price is falling which is opposite of bull trend. Is this the reason ?


Generally speaking, it should be plus or minus a day of off the mark. You have mentioned Rob Mchugh earlier, and he allows plus or minus a couple of days. My mistake here that there was more than one possibility. There was 18/2 working off traded days. The market fell into this (and resulted in a very minor turn of one up day following the divvy day.

Working off calendar days the other possibility was on the 24th Feb(Which is a Sunday), and as such implies we had a nother one on Friday/Monday.

The challenge for me is somehow to come up with a way of determining which will be the most significant when we have 2-3 possible days that fall very close together(within 1 week) as in this case. If you are trading fully paid shares it probably doesn't matter as you can endure the market moving back and forth in that timeframe and hold. If you are a derivatives or options trader as myself, then timing is much more crucial.

Robert Prechter, who is a probably the best EW analyst got around it this way. If he knew he was in a fifth wave as now, he would initiate a position where he thought the 5th wave terminated. For me that was Monday. What he did though was not put all his intended $$ in the trade at once(he only put in 1/3), because 5th wave can extend a little. If the market falls further he add some more and buy twice as many contracts again, and then if the market fell even further because someone panicked because some more fundemental news came he would buy the rest in effect casting out his little basket and buying some very cheap options. This way you are making intelligent bids working off other people emotion. This what I did last week, fingers crossed, hope it works out!!

[wavepicker]

It looks as though you'll get a nice bounce on the back of the rumoured AMBAC bailout on Monday, even if it is only temporary.

It was always a temporary proposition, but the bounce will last at least into the 11th March so it's very tradeable

[kingbrown]

The banks have had a stella time in the last few years
I should now i have been a long term invester since they floated
But i had started to get a reality check 12 months ago

What goes up up and up

Comes Down Down Down

[Trembling Hand]

Who would of thought an oversold stock could get more oversold then again more oversold. :eek7:

Trying to trade this thing long is very odd game?? She hasn't looked like making a higher high since Mid November. Would be interested in why some have played on the long side since then.

If you removed the ticker and forgot about the name the chart has looked terrible for a long time. I wounder if it didn't have the mighty CBA on the chart if people would see it the same way.

Not a gloat I tried catching some knifes back in Jan. Soon went back to my day trading :o

[oldblue]

Like ( almost) everything else, CBA will turn back up in due course.
When that happens, they will still be a terrific banking franchise and I'll be ready to buy. But not yet.

:cool:

[dhukka]

It was always a temporary proposition, but the bounce will last at least into the 11th March so it's very tradeable

Hmmm telling fibs again? Seems the bounce was of the dead cat variety. That Fibonacci has a lot to answer for.

[cuttlefish]

Took the final part of profit on my put options position today - not because I think the downward slump has ended but mainly because they're getting closer to expiry and I'll be away the rest of the week.

Wish I'd stacked up a larger position and hadn't taken as much partial profit earlier on but hindsight is a wonderful thing.

[treefrog]

bit selling going on - down 140c in last thirty minutes so will rest of financials follow this arvo????

[madbull]

What are peoples opinion about CBA and its takeover talks with ABN?

I recently got out of CBA since my stop was triggered hoping to find a cheaper entry point but I'm considering whether or not this was the right thing to do now.:confused:

[dhukka]

Just thought I would update the chart that I posted back in February (http://www.aussiestockforums.com/forums/showpost.php?p=259401&postcount=49). The data comes from the RBA and is to the end of March 2008 (before announcements by ANZ and NAB). As you can see impaired assets have turned sharply upwards. However impaired assets as a percentage of total assets still remain historically low but the trend suggests it may not stay that way.

[JTLP]

Has CBA seen the bottom? I am currently overseas so I can't post charts or anything (Hostel living for the win!) but from looking at the yearly it looks like CBA has been in a modest uptrend from the March lows (higher highs/lows etc).

Thoughts? Can anyone post a chart?

Thanks =)

JTLP

[grace]

Has CBA seen the bottom? I am currently overseas so I can't post charts or anything (Hostel living for the win!) but from looking at the yearly it looks like CBA has been in a modest uptrend from the March lows (higher highs/lows etc).

Thoughts? Can anyone post a chart?

Thanks =)

JTLP

Happy holiday
You are beating me in the comp with that minemakers thing! Go Linc Go!

Here is a chart......looks pretty sideways to me, although I am not a tech head!

[JTLP]

Ahhh i was looking on the Comsec charts (using a line chart) and it seemed to be in a bit of an uptrend (not with those candles though). It was also on a yearly. Thanks for that grace...much appreciated! (and yes go MAK...it's a bit of a tussle between us at the top);)

[Green08]

COMMONWEALTH BANK OF AUSTRALIA ASX NOTICE REGARDING BANKWEST

Sydney 2 October 2008:

Commonwealth Bank is aware of recent media speculation regarding the possible acquisition of BankWest.
Commonwealth Bank regularly reviews acquisition opportunities but at this time confirms we do not have any offer with HBOS plc to acquire BankWest

[deadset]

CBA is looking lonely with 0 trades today, so they are going for BankWest afterall. What time does CBA open again ?

[Tysonboss1]

CBA is looking lonely with 0 trades today, so they are going for BankWest afterall. What time does CBA open again ?

they are in a trading halt.............................................. .................................................. .....

[deadset]

"Shares in the Commonwealth Bank of Australia (CBA) have been placed in a two day trading halt while the lender raises $2bln capital to finalise its acquisition of BankWest and its wealth management arm St Andrews. CBA will pay $2.1bln for the group from its UK based owner HBOS. CBA shares last traded at $45.15."

[Sunder]

Wow, can't believe it was a month ago since one of the top 5 shares on the ASX was discussed.

Anyone know why it dropped 3% this morning before recovering? Some announcement about the Bankwest acquisition maybe?

[drsmith]

Possibly on media reports that ABC learning is about to go from intensive care into the hands of the corporate undertakers.

CBA is a $500m creditor.

[cuttlefish]

People might also be questioning why they didn't pass on the full 75 bp RBA rate cut but only 58 basis points instead - kind if implies things are a bit tight doesn't it? WBC only passed on 65 bp as well.

http://business.smh.com.au/business/westpac-slices-rate-065-20081105-5i7x.html

[TheAbyss]

Sky business channel commentator on your money your call last night stated that CBA was "very smelly". Can't recall the exact wording however my interpretation was as follows,

Suncorp deposits were/ are in jeopardy hence the government guarantee on bank deposits being introduced and that if that guarantee gets lifted he wouldnt be surprised to see Suncorp share price hit $3.00. He then went on to say that CBA is also "very smelly" on the same lines. That was his reasoning as to why no one can make an offer for Suncorp as they are in dire straits so a value cannot be put to them.

Any truth to this? Only insiders would know however i wondered at the time what impact those comments would have on Sun and CBA today.

How to gauge the effect of these comments? Interesting to say the least and do they have to substantiate given theior positions as brokers or do they get to slate a stock and buy low?

[awg]

People might also be questioning why they didn't pass on the full 75 bp RBA rate cut but only 58 basis points instead - kind if implies things are a bit tight doesn't it? WBC only passed on 65 bp as well.

http://business.smh.com.au/business/westpac-slices-rate-065-20081105-5i7x.html


Possibly on media reports that ABC learning is about to go from intensive care into the hands of the corporate undertakers.

CBA is a $500m creditor.



try multiqoute again, hope it works

my opinion, reason they are not passing on full interest rate cut is cause of OS funding is rising due to our lowly dollar. approx 30% is sourced OS

As i stated on the ABS thread, that company is rooted, I looked at it ages ago and couldnt beleive anyone would invest.

I doubt they would be cost flow positive, even if you ignored the interest bill completely.

CBA will take a complete loss, the govt wont let them close the doors, or no mummies can go to work!

[johnnyg]

Interesting Chart for CBA. Has formed a nice trading range within a Rectangle for the past 10 months. May have the potential for a big move either way depending which way it breaks. Definitely one to keep an eye on.

[Julia]

Wow, can't believe it was a month ago since one of the top 5 shares on the ASX was discussed.

Anyone know why it dropped 3% this morning before recovering? Some announcement about the Bankwest acquisition maybe?


Possibly on media reports that ABC learning is about to go from intensive care into the hands of the corporate undertakers.

CBA is a $500m creditor.
I offered another reason for the drop in my post this morning. This was deleted because I wrote words which were not meaningful in order to fill the 100 character rule. So I am now trying again to offer the information given earlier, i.e. that CBA also have significant exposure to AFG which is following the ABS path. Hope this helps.

[joeyr46]

Interesting Chart for CBA. Has formed a nice trading range within a Rectangle for the past 10 months. May have the potential for a big move either way depending which way it breaks. Definitely one to keep an eye on.

The longer term chart 16yrs or so is more interesting as a log chart as it shows CBA has broken trend and is consolidating just under the trend line and of course today it broke down from the rectangle it had formed in your chart on good volume time will tell but it does not look bullish at all

[STYLSH]

thanks for the analyst :) Maybe it'll be heading north today with the small rally they are having in the states. Hope i didnt jump in too early like i always do.

[Moneybags]

Awesome stuff Nick........as always :) . Some pretty disturbing targets there but thankfully I do not hold ATM.......will be watching with interest.

Do you see a similar bearish senario for other Banks also??

Cheers

MB

[bloomy88]

Wow thanks Nick, that is some very in depth analsis. I will be watching CBA very closely for the rest of the week, especially after the 6.29% fall ($2.39) today. I think if CBA hits $30 i will be buying, the only worry is their $600+ million exposure to ABC and $200million exposure to Allco.

Guess we'll have to wait and see.

Thanks again Nick

[cuttlefish]

I think if CBA hits $30 i will be buying.

That would be brave imo. From an economic perspective I can't see anything to indicate the pain isn't far from over for the banks and in fact it might only just be starting.

[Moneybags]

Do you see a similar bearish senario for other Banks also??

Cheers

MB

Hmmmm, judging by todays performance of Banks it could well be the case......NAB have really started the ball rolling here with cap raising.

MB

[kennas]

CBA yielding 10% on a pe of 8 ish.

Anyone else thinking it's approaching oversold - long term opportunity?

[STYLSH]

Wow, lucky i got out a few days ago. It doesn't look like a fakeout. Maybe the $15 scenario is coming?!

[dhukka]

CBA yielding 10% on a pe of 8 ish.

Anyone else thinking it's approaching oversold - long term opportunity?

I have the FY09 forecast yield at around 8.6% according to comsec consensus estimates (assuming a price of $31) but I'd be careful about the yield, CBA announced what amounted to a profit warning last week in their September quarter trading update. Short term it looks oversold, especially when it dipped below $30 earlier this morning.

[gfresh]

The CBA will be downbeat until that huge white elephant in the room - Centro Properties is resolved. Looking at the price of CNP and CER, any hope for them seems to be fading fast.

If Centro fails it will be Australia's largest corporate collapse, and CBA is exposed. The expiry of the funding deadline is December 15th, which is looming ever closer.

Under that scenario, a target of $15 (or at least much lower than current prices) couldn't be ruled out.

[Bushman]

The CBA will be downbeat until that huge white elephant in the room - Centro Properties is resolved. Looking at the price of CNP and CER, any hope for them seems to be fading fast.

If Centro fails it will be Australia's largest corporate collapse. The expiry of the funding deadline is December 15th, which is looming ever closer.

Under that scenario, a target of $15 probably couldn't be ruled out at all.

Keep an eye out for what discount to book value Centro are accepting for asset sales in CAWF/CSIF etc. CBA & Co controls this process now. If it starts heading to the 'firesale' territory (say 15% plus), then you know that CBA and co are 'losing faith' in trying to trade out of the mess Centro are in.

[cuttlefish]

Wouldn't go near it long term. Short term it seemed logical that it might hit some resistence to its downward plummet around the $30 mark so it might pause here for a while and consolidate for a bit before any further moves down.

[oldblue]

What is ( best guess ) CBA's exposure to CNP group?

How much was ( theoretically) covered by first ranking security?

[Nick Radge]

a breakout to the downside that sticks will see $30.00 with a high degree of probability

Today's low was $29.92 with a reasonable close at $31.22. There could be something in that. We'll be taking another look later this week to see what the Elliott Wave pattern suggests from here.


This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision.

[kennas]

Big turn around on the financials this morning, all bouncing sharply.

Interesting.

Wonder if it'll hold?

[TheAbyss]

Well i have taken a risk and jumped in at $29.95 for a while and see if we can get a bounce. The 5 year chart indicates a bit of a floor around $30 and Nick has a technical evaluation of same. Concerned that technicals get forgotten in times of fear but worth a shot in my view.

Charty attached but no lines etc as i dont have the analytical skills required but $30 does look ok (as did $40 a short while ago).

[Nick Radge]

The EW count suggests we're clearly impulsing lower in what may be an extended 5-wave pattern (labeled -1 through -5) that now appears to be sub-dividing into a smaller pattern (labeled -i through -v). The correct way to trade this pattern is with the trend, so looking for the end of a wave-iv bounce and initiating shorts with the trend - as opposed to against it. You can see that there is no sign of a wave-iv or the end of wave-iii for that matter.




This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision.

[agro]

it fell below $30 today

do you think CBA and other banks will maintain their dividends for next year?

[oldblue]

it fell below $30 today

do you think CBA and other banks will maintain their dividends for next year?

Far too early to call that, IMO.
Apart from CBA, the other three "pillars" are barely into their new financial year with a long way to go before the half, let alone the final results.

;)

[alphaman]

do you think CBA and other banks will maintain their dividends for next year?
So far SUN seems to be the only bank that has admitted dividends will be cut. ANZ and WBC have specifically insisted that dividends will be maintained, just like the government and RBA saying we will not have a recession.

Realistically, it's such a no brainer that dividends will have to be cut.

[sammy84]

SUN's balance sheet is in a lot more trouble than the banks. I think the big banks realise that so many holders haven't sold yet on the provision of receiving dividends, so any cut would have a drastic impact on the SP. They have the capital available to keep dividends the same, so why not...

[ROE]

either the market is wrong or the bank is telling lies
with the current SP the market factor in some dividend cut

consider we only see a few corporate collapse and their provision start to look scary, imagine when the housing market turns and fore closure are coming in thick and fast, that is the scary scenario

because all the big 4 has pretty big residential and construction loan book
probably their biggest loan book.

and I think a lot of people are imagining that scenario and hence the SP

[kennas]

it fell below $30 today

do you think CBA and other banks will maintain their dividends for next year?All 4 bank CEOs have categorically stated they will not cut dividends.

Michael Pascoe wrote a piece about it in whatever paper he writes for a couple of days ago.

Lets wait to see some pants on fire.

[drsmith]

I remember Westpac's pants being on fire back in 92 when as part of a capital raising the promised dividend was halved.

Hopefully none of the major banks will find themselves in as much distress as Westpac did back then.

[kennas]

Found the Pascoe article in the Brisbane Times.

Banks offer treat or trick (http://www.brisbanetimes.com.au/articles/2008/11/19/1226770490904.html)
Michael Pascoe | November 19, 2008 - 7:33AM

Either the market is offering some of the great buys of the decade or we've witnessed a complete collapse of trust in the chief executives of our cornerstone institutions.

Westpac touched a low yesterday of $15.30. At that price, Gail Kelly is promising to pay you an amazing pre-tax dividend of 13.25%.

ANZ fell as low as $12.65. At that price, Mike Smith is promising to pay an absolutely extraordinary pre-tax dividend of 15.35%.



Hmmm, Ralph Norris from CBA isn't quoted in it...

[johenmo]

I'll go for a collapse in trust. They still have hiddens bags of dirty laundry yet to come out, I reckon.

Divs will be lower, unless Rudd Pty Ltd gives them some more spending money. If he does, I hope it's NAB and goes straight their most deservind shareholder - me!

[mfsperth]

With 52,000 job losses, stock market value down from $274 bn to $26bn, and $20 bn in losses in one year, Citigroup are in no position to bag CBA.

Citigroup seem to be on a continuing campaign to drive down value in Oz stocks, and their public assessments need to be subject to the same controls as ratings agencies are about to come under.

[cuttlefish]

Interesting close today. Traded in $31.50 to $32 range most of the day then in the match up it jumped $2 to close at $34.00.

I'm assuming looming options expiry is a likely part of the explanation given its been a strong down month. Also noted that BBP managed to pay off a debt facility announcement at 4:15 p.m (don't follow BBI so not sure if this was expected). Also no news today from CNP which might be a case of no news is good news?

:confused: Any other possible explanations for the large jump on the close?

[cuttlefish]

Well an interesting item on the SMH this afternoon about a big computer glitch at CBA causing duplicate transactions to occcur for about 200,000 customers. Does anyone know when this news actually came out ... and WTF did they not put out any ASX announcement about it. :mad:

Its a bit scary that they can make such a large error ... kind of brings home the fact that our 'dollars in the bank' are really just a bunch of magnetic imprints on a computer disc somewhere.

[sinner]

Yeah lol I got a few emails today from some rather disconcerted online sellers who were wondering why the cash I had sent them over the weekend was vanishing from their accounts.

http://www.commbank.com.au/news/netbank_news14.aspx?n=news39

This is CBAs second "computer glitch" in a very short period of time. A sign of so called cracks in the wall?

EDIT: The original update I saw was at 11am, there could have been one before but I had an exam this morning.

[honey85]

Does anyone know why the price of CBA is so stagnant lately? The market surged 80+ points today but CBA had negligible change. It has been almost a week and CBA is trading around $28. Was it because of the announcement on 10th dec to raise capital of $750m? And what do you guys think of CBA in the short-term and long-term future? I am quite new to shares.

[cuttlefish]

This are my views - for what they're worth - don't hold me to them!

Factors affecting CBA and banks lately:

Fundamental
* WBC cap raising and CBA announcing small cap raising as well has dragged down both of them in my view.
* As I understand it CBA has a fair bit of exposure to Centro Propertie who are due to make an announcement about their debt deadline sometime in the next day or two (see below - they went into trading halt pending announcement today).
* General economic environment - retail sales, unemployment/jobs, housing etc.

Technical
* Broke down from a long term sideways trading band between $39 and $45 around the beginning of November to resume its downtrend
* Seems to have some historical support around $28 which its bounced off a couple of times in the past few few weeks - I see more firm historical support around $23 as well. There is also a historical congestion area in the $23 to $32 sort of range so it might find support in this zone (or get bogged down in this zone for a while before turning back upwards). If it falls down below this zone it will be interesting.

My personal view on banks is still bearish and I think CBA had gotten off lightly so far this year compared to the others and has been doing a bit of catchup lately.

CNP announcement from today below:

Centro Properties Group (ASX:CNP) Request for Trading Halt
Centro Properties Group (Centro) hereby requests that the ASX grant a trading halt of its
stapled securities effective immediately, until the making of a pending announcement regarding
the outcome of negotiations on the extension of its finance facilities that are due to expire today.
Centro requests the trading halt remain in place until the sooner of the making of that
announcement and the opening of trade on Wednesday 17 December 2008.
Centro confirms that it is not aware of any reason why the trading halt should not be granted.

[sinner]

honey85, as mentioned in this thread and others, the big white elephant in the room is Centro.

These debts were supposed to be called today I believe.

http://www.skynews.com.au/business/article.aspx?id=286956

Of course they cannot pay this and CBA has exposure, the market knows it.

http://www.bloomberg.com/apps/news?pid=20601081&sid=aLWN7N6s_HJI&refer=australia

US malls have been reported as drying up all over the country. I can probably dig up a link if you like.

Nobody is interested in going long until the smoke clears.

Just dug this up on Google News

http://www.theaustralian.news.com.au/business/story/0,28124,24791824-5001641,00.html

Good read "Centro Properties in sights of CBA's hitman" small tidbit


But Centro Properties is no place for the short-sighted. Its collapse would be an economy-shaking event. For 10 months now, the ludicrously constructed, trans-Pacific shopping mall owner has effectively been in the hands of two syndicates of banks and 10 insurance companies which are owed over $6 billion. The CBA is owed $1.2 billion by Centro. Of that, $1 billion is secured -- making the bank Centro's biggest secured creditor.


Of the other pillars, the NAB has the next biggest secured exposures at $750 million with a further $200 million unsecured, while the ANZ has $700 million of secured debt and $680 million unsecured and Westpac $558 million secured, most of that courtesy St George Bank.

Centro needs to get 23 separate financial institutions to sign off on that plan. As of last night, it had the endorsement of 22. The hold-out? It is Griffiths and the Commonwealth.


EDIT: Bah ya beat me to it cuttlefish! While I was digging for links!

[drsmith]

US malls have been reported as drying up all over the country. I can probably dig up a link if you like.
I'd be interested in such a link(s).

With regard to Centro the balance of media opinion is that the banks will give it a stay of execution.

[sinner]

Hi drsmith,

This is just one example I found quickly before bed, you can go to news.google.com, I searched "commercial real estate malls" for a crapload of very fresh results with similar stories.

http://online.wsj.com/article/SB122929964304905239.html?mod=googlenews_wsj

Commercial real estate is yet to burst in the US, but in my opinion it is unavoidable. Wow we are getting off topic.


Shares of Simon Property Group SPG.N, the No. 1 U.S. mall operator, slid 13 percent to $41.07, and Boston Properties Inc BXP.N, which owns skyscrapers and other office buildings in key U.S. markets, dropped 12.1 pct to $43.60. The benchmark MSCI U.S. REIT index .RMZ declined 13.4 percent, compared with a 6.1 percent drop in the S&P 500 .SPX.

"The mall operators are really, really in trouble," said Kevin Quinn, a managing director of equity trading at Stanford Group Company, mentioning Vornado Realty Trust VNO.N as a key player. "There aren't even signs on the empty stores in the malls. They've been empty for a while, barren, tumbleweeds blowing through."

from http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSN1933428520081119


With regard to Centro the balance of media opinion is that the banks will give it a stay of execution.

Not sure if you read the last link I posted, CBA seems to be determined to pull the trigger despite everyone else wanting to provide clemency.

[drsmith]

Thanks for the links.

Quickly reading a couple of news articles this morning it appears that Centro is trying to swap some debt for equity and CBA is trying to negotiate itself into a better position relative to the other banks. According to the SMH discussions with banks were being held late last night in New York to get all the financiers to approve the rescue package.

[Justthinkin]

I hold CER and am very interested in outcome of these negotiations. I find it difficult to believe that after such a long period (nigh 12 months) that CBA or any banker is holding out to the last minute... very difficult to believe. Moreover, if indeed that is how it really is (ie CBA is not yet comfortable) then the directors of CNP et al need to look long and hard at the issue of solvency... do they have adequate working capital to fund a logical / ordely liquidation... I doubt it.

Alan Kohler in an article yesterday made the observation that the CBA is walking a fine line... enjoying Federal government guarantees but potentially instigating (or maybe facilitating???... pick a word) a significant investment failure and consequential commercial property and retail malaise... Telstra got in the government's face yesterday and I think the government mentioned in no uncertain terms that it was not a good idea... CBA ought to be (and I suspect are) mindful.

Lastly, I have difficulty with banks of CBA's ilk taking equity positions ... it is a banker...if it was MacBank, I fully understand. If indeed CBA takes the equity (whatever form) then in my view it has compromised it's charter...

Whatever... I hold CER and not CBA...

Do your own research etc etc

Good luck today:)

[oldblue]

I don't have a problem with CBA or any other commercial bank taking an equity position in an equity for debt deal. There have been plenty of these in the past and they are preferable to the alternative which is normally mortgagee sale, receivership or liquidation of the borrower.
I wouldn't think that a bank would want to be a longterm shareholder in most instances and the deal would be regarded as a temporary arrangment with a view to on-selling the equity in due course.

Disc: Holding a few CNP; no CBA but a couple of other banks.

[cuttlefish]

I don't think retail is going to get better any time soon, so CNP's business is not going to improve. If CBA want to pull the trigger now, accept the writedowns and move on it might be better in the long run. If its cactus and everyone know's its cactus then there's not much point keeping it hanging on in some kind of corporate denial.

Currently it seems CNP have the revenue to cover interest on the debt, but with an ongoing decline in retail, how likely is this to continue? They might get a better price for their assets in a liquidation if they are still showing some reasonable yield.

I don't really see any good news in this for CBA either way, but its possible the recent selldown of CBA has already priced a lot of CNP related negativity into the price anyway.

[honey85]

As mentioned, I am new to shares. I did my first trading last month with CBA and got a 15% profit. Have read some bad news about CBA but don't know why I still bought CBA last week. Maybe because it gave me my first profit and emotionally I am inclined to it. This shows how amatuer I am:banghead: Really hope to get out asap without a loss, not to mention any profit.:(

[cuttlefish]

As mentioned, I am new to shares. I did my first trading last month with CBA and got a 15% profit. Have read some bad news about CBA but don't know why I still bought CBA last week. Maybe because it gave me my first profit and emotionally I am inclined to it. This shows how amatuer I am:banghead: Really hope to get out asap without a loss, not to mention any profit.:(


The market is always difficult to predict. Sometimes it will rally on bad news, fall on good news, drift sideways on horrible news, plummet or soar on mild news etc. It often depends on how widely a pending announcement has been known about and to what level a particular outcome has been priced in.

Nobody can know for certain one way or another how the CBA share price will perform over the short term (or the long term for that matter.)

Which is why you need to have your own trading plan, your own reasons for entry, your own criteria for exits, and your own money management regime that matches your appetite for risk.

[honey85]

Banks agreed to Centro's debt extension.

http://business.theage.com.au/business/centro-debt-deal-all-but-done-20081216-6zfy.html

How would this impact on the economy or specifically CBA? From my shallow knowledge of shares, I reckon this as a good news to CBA, isn't it? Can someone elaborate on this? I wish to learn more.

[cuttlefish]

Banks agreed to Centro's debt extension.

http://business.theage.com.au/business/centro-debt-deal-all-but-done-20081216-6zfy.html

How would this impact on the economy or specifically CBA? From my shallow knowledge of shares, I reckon this as a good news to CBA, isn't it? Can someone elaborate on this? I wish to learn more.

Firstly - don't believe everything you read in the newspaper - until its been announced to the ASX I would still treat it as hearsay (thats my take).

But if this news is announced, it may be good for the economy, it may be good for CBA, but that doesn't necessarily mean the share price will rise. On the other hand it may be bad for the economy and/or bad for CBA - that doesn't necessarily mean the share price will fall.

Trying to apply this sort of basic logic to short term price movements tends not to work - more often than not the market will do the opposite of what 'logic' would dictate - nobody knows for sure what will happen.

And thats enough from me on the topic, I'm no expert either.

[oldblue]

Yes, one would expect this to be good news for all concerned when (if) it's confirmed but as cuttlefish says, the market will not necessarily boost CBA's SP as a consequence. That depends largely to what degree this news has been anticipated and already built into the SP - and we have no idea of that!

;)

[honey85]

Capital raise is announced.

http://asx.com.au/asxpdf/20081216/pdf/31f6zkrhv1hlmj.pdf

From what I saw on Westpac last week or two, capital raising will force the share down to around the published price of $27. I thought CBA might have a quick short rally due to Centro (rose $1.10 today) but with this news, it seems like it wont. Any thoughts from anyone? Thanks.

[gfresh]

Somebody made a little boo-boo by forgetting to tell the institutionals that they've also had to raise their bad debt provisions to 0.6% of total loans :o Merrill walks out in embarrassment it seems...

http://business.theage.com.au/business/cba-stuffs-up-capital-raising-20081217-7046.html

Looks like a right cock up!

[Justthinkin]

Honey85... I don't think you are going to have a good day. :(

Old Blue... that is why banks (sheltered by the infamous four pillars policy under which they develop egos and ambitions way beyond there abilitys) should not take equity positions in stressed companies. They are credit risk assessors and managers... not equity traders or capital providers... they just don't have those skills. It seems today they cannot even value their own equity... hmmmm!:mad:

For the rest of us... compliments of the CBA (who have just discovered that bad debts might be an issue during this difficult financial crisis) I suspect we'll all take a hit on the all ords...bugger. My greatest concern is that this public display of incompetence just spills everywhere...bugger bugger bugger:banghead:

Don't mind me

DYOR

[kennas]

I suppose the CEO can still take his $10m bonus for steering the ship in a straight line.

Don't need to make any blunders in this environment.

Of course, he's worth the $10m to get that caliber of talent.

:rolleyes:

:banghead:

[prawn_86]

I suppose the CEO can still take his $10m bonus for steering the ship in a straight line.

Don't need to make any blunders in this environment.

Of course, he's worth the $10m to get that caliber of talent.

:rolleyes:

:banghead:

Nice job if you can get it ;)

Where do i sign up? Or arn't i in the boys club cause i didnt go to private school?

[honey85]

When I woke up, I thought CBA will have at least a decent day from DJ and Centro and the capital raising. At 9.45 the news of the blunder came out, I was like... what the ****? But these uncertainties are what makes the market interesting, isn't it?:cool:

[cuttlefish]

Firstly - don't believe everything you read in the newspaper - until its been announced to the ASX I would still treat it as hearsay (thats my take).


Well it looks like even if it has been announced to the ASX it isn't necessarily so :eek7: (i.e. I'm referring to the announcement last night regarding the cap raising, not the CNP stuff this comment was originally directed about).

Gee the market seems like a minefield at the moment, and it doesn't seem like any of the banks are winning any friends at the moment between the various debacles going on (or that have gone on) this year.

[michael_selway]

When I woke up, I thought CBA will have at least a decent day from DJ and Centro and the capital raising. At 9.45 the news of the blunder came out, I was like... what the ****? But these uncertainties are what makes the market interesting, isn't it?:cool:

hehe its called a true Bear Market :)

Earnings and Dividends Forecast (cents per share)
2008 2009 2010 2011
EPS 344.4 320.2 334.5 388.7
DPS 266.0 266.0 266.0 285.0

http://www.******************/images/stockpricecharts/600_420/CBA.jpg


Date: 16/12/2008
Author: Tanya Powley; Jane Searle
Source: The Australian Financial Review --- Page: 46
A weakening economy has caused mortgage lenders to review their lending criteriaand risk exposures. Low-documentation loans have virtually disappeared. Themortgage broker changes have also affected the approach of banks in lateDecember 2008, who rarely offer no-deposit loans any more. Some say that thefailure of some non-bank lenders has reduced competition in this sector

Date: 12/12/2008
Author: Richard Gluyas
Source: The Australian --- Page: 21
The share price of Commonwealth Bank of Australia slid another 14.2% inmid-December 2008. The decline started in October 2008 with the acquisition ofBankWest. Investors are considering various manoeuvres by the bank to improveits position, including lifting the tier-one capital ratio to eight per cent

Date: 11/12/2008
Author: Richard Gluyas
Source: The Australian --- Page: 19
Merrill Lynch will conduct a $A750m scrip issue for Commonwealth Bank ofAustralia (CBA), as the latter seeks to boost its tier-one capital ratio toabove 8% in order to compete with its major Australian bank rivals. CBA willthen offer small investors a share purchase plan to source an additional $A500m.However, on 10 December 2008 the stock closed $A1.50 lower at $A28.50

Date: 11/12/2008
Author: Eric Johnston
Source: The Age --- Page: B3
The Commonwealth Bank's takeover of BankWest has been cleared by the ACCC,which noted that the smaller bank's expansion plans had been affected bythe global financial crisis. Meanwhile, the Commonwealth Bank will undertake a$A750m capital raising, which will increase its Tier-1 capital ratio to around7.8 per cent

Thx

MS

[Aussiejeff]

Oh dear.

CBA's NetBank Login & Home Pages won't load. Must be a few CBA server hits going on.. :(

Clowns.

[Nyden]

I must say, I'm completely stunned as to how this happened? How the heck did CBA think they were going to dodge this - make a sly comment to the press, and expect everyone to be happy?

Oh well, there go my CBA profits; and probably then some! :p: I'm very disappointed though, as it looks as though it may have even opened in the green this morning ... only to have this nonsense come up.

I really am just stunned as to how they thought they were going to get away with it :eek7: This whole issue has been a mistake, they should have waited for (hopefully) higher prices.

Furthermore, would it not have been insider trading if these insto ivestors knew of the issues before the market did? I really hope this event results in more disclosure by more companies. All of this lying by omission really is hurting the Australian market, you only need to look over at OZL to see the mess it causes. Perhaps I should call CBA and ask for my shares for $1 less as well, afterall - I wasn't told either :D

[chops_a_must]

It will be an interesting AGM you would imagine.

The instos may well be looking to push someone out after this schmozzle.

I'll be looking to put some in the bottom draw IF it gets to 24.

[cuttlefish]

I still see plenty more room for downside in the banks. If/when they start to report losses instead of profits and cut their dividend payments the current prices may not look as attractive as they do today. And I find it hard to imagine there won't be a few more cap raisings as they go through the coming year given the funding situation and the deteriorating loan books.

Short term there will be technical bounces and rallies but I wouldn't be calling a bottom yet.

[Lexie86]

I must say, I'm completely stunned as to how this happened? How the heck did CBA think they were going to dodge this - make a sly comment to the press, and expect everyone to be happy?

Oh well, there go my CBA profits; and probably then some! :p: I'm very disappointed though, as it looks as though it may have even opened in the green this morning ... only to have this nonsense come up.

I really am just stunned as to how they thought they were going to get away with it :eek7: This whole issue has been a mistake, they should have waited for (hopefully) higher prices.

Furthermore, would it not have been insider trading if these insto ivestors knew of the issues before the market did? I really hope this event results in more disclosure by more companies. All of this lying by omission really is hurting the Australian market, you only need to look over at OZL to see the mess it causes. Perhaps I should call CBA and ask for my shares for $1 less as well, afterall - I wasn't told either :D

Not really surprised at how CBA has turned out considering their lack of provisioning for bad debts.
Their long-standing argument this year of not requiring any more capital plus their slow realisation that they need to match the Tier 1 capital ratio of the central banks has really torpedoed their credibility.

But you really do have to have to wonder when at the completion of a revision raising, a major bank announces that their bad debt expense would increase from 40 to 50 basis points to approx 60 basis points.

CBA ever heard of due diligence?

[cuttlefish]

Now I've seen everything - see announcement just released at 3:17 p.m. today.

Here's an excerpt:

"The Commonwealth Bank today announced that it had terminated the share placement agreement with Merrill Lynch International Australia Limited on the basis that Merrill Lynch did not inform potential investors of the various disclosures made by the Bank in its announcement released to the ASX at 7.30 pm on Tuesday 16 December 2008."

Hello?!? What about continuous disclosure and insider trading.

Apparently the information that CBA released after market yesterday to all of us 'other' investors, about the bad debts increasing, was supposed to be disclosed by Merril to potential investors during the capital raising. So Merril was obliged as part of the agreement to provide market sensitive information not yet disclosed to the market ... interesting.

Is there anything the banks can't get away with at the moment?

[Nyden]

Now I've seen everything - see announcement just released at 3:17 p.m. today.

Here's an excerpt:

"The Commonwealth Bank today announced that it had terminated the share placement agreement with Merrill Lynch International Australia Limited on the basis that Merrill Lynch did not inform potential investors of the various disclosures made by the Bank in its announcement released to the ASX at 7.30 pm on Tuesday 16 December 2008."

Hello?!? What about continuous disclosure and insider trading.

Apparently the information that CBA released after market yesterday to all of us 'other' investors, about the bad debts increasing, was supposed to be disclosed by Merril to potential investors during the capital raising. So Merril was obliged as part of the agreement to provide market sensitive information not yet disclosed to the market ... interesting.

Is there anything the banks can't get away with at the moment?

I don't understand why they even released that statement at this time? If the stock is to remain in halt, what's the point? There's no clarification on the issue there, there's no indication of how the new raising went, there's nothing in it - except a big finger pointing in the direction of Merril

Other ann seems to have answered some questions. At least they did manage to flog off 357 mill worth @ 28.37 :)

[sails]

Another one released at 15.33 - it's copyright so here's the link: http://www.asx.com.au/asx/statistics/announcementSearch.do?method=searchByCode&issuerCode=cba&timeFrameSearchType=D&releasedDuringCode=W

Appears to be in the process of finalising the new deal at $26...

[cuttlefish]

I'm assuming this means they'll lift the trading halt tomorrow morning then and resume with the open.

[chops_a_must]

"Now I've seen everything - see announcement just released at 3:17 p.m. today.

Here's an excerpt:

"The Commonwealth Bank today announced that it had terminated the share placement agreement with Merrill Lynch International Australia Limited on the basis that Merrill Lynch did not inform potential investors of the various disclosures made by the Bank in its announcement released to the ASX at 7.30 pm on Tuesday 16 December 2008."

Hello?!? What about continuous disclosure and insider trading.

Apparently the information that CBA released after market yesterday to all of us 'other' investors, about the bad debts increasing, was supposed to be disclosed by Merril to potential investors during the capital raising. So Merril was obliged as part of the agreement to provide market sensitive information not yet disclosed to the market ... interesting.

Is there anything the banks can't get away with at the moment?"

Hahaha... I call bull****...


Seriously... come on ASIC. Here is a company admitting to forcing mandatory insider trading!!!

No wonder Merrill didn't tell their investors. Why should they? It's not their job to pass on information that should be known by the market. Hell!!! I think that is even massively illegal now!!

[deadset]

I already got burnt on "capital raising" by other companies last week. So you've got my sympathy on this one, even though I didn't hold CBA this week.

If you don't get it, imagine being a shareholder, and then the company sells lots of other shares for less than your ones without telling you.

[SoBadAtTrading]

It's tough being a shareholder these days with all the capital raisings that's going on. With CBA, isn't this their 3rd raising in a month or two already!? How many % has the share lost since its first raising??

[Naked shorts]

"Now I've seen everything - see announcement just released at 3:17 p.m. today.

Here's an excerpt:

"The Commonwealth Bank today announced that it had terminated the share placement agreement with Merrill Lynch International Australia Limited on the basis that Merrill Lynch did not inform potential investors of the various disclosures made by the Bank in its announcement released to the ASX at 7.30 pm on Tuesday 16 December 2008."

Hello?!? What about continuous disclosure and insider trading.

Apparently the information that CBA released after market yesterday to all of us 'other' investors, about the bad debts increasing, was supposed to be disclosed by Merril to potential investors during the capital raising. So Merril was obliged as part of the agreement to provide market sensitive information not yet disclosed to the market ... interesting.

Is there anything the banks can't get away with at the moment?"

Hahaha... I call bull****...


Seriously... come on ASIC. Here is a company admitting to forcing mandatory insider trading!!!

No wonder Merrill didn't tell their investors. Why should they? It's not their job to pass on information that should be known by the market. Hell!!! I think that is even massively illegal now!!


This has got to be the biggest f**k-up in history!
Is there any market that hasn't factored in this screwup yet?
Im am at a loss for words:eek:

[honey85]

It takes a mammoth effort to perform such a big screw up. It's not easy at all to screw up things at such scale. I dread to see how CBA goes tomorrow. I feel for those who have bought CBA lately. I am one of them:( I gonna lose a few hundred bucks tomorrow (I said I am new, didn't I?):o

[tab96]

I am one of them too.

Was my 3rd trade ever. The very next day, this all happens.

But I can't exactly say my research was exhaustive.

[drsmith]

Through all of this CBA still got all of it's capital raising money which is the most important thing.

Still, it was an interesting screw up.

[chops_a_must]

Through all of this CBA still got all of it's capital raising money which is the most important thing.

Still, it was an interesting screw up.

No. I actually do not think they did.

Originally it was meant to be 2 billion, but ended up being 1.65 I think.

Fair to say a fair few who had ponied up cash the first time, were certainly not going to the second time around. And fair enough to. Really, just awful.

[drsmith]

As I understand it the 1.65 raised from UBS did not include the 0.357 raised by Merrill Lynch last week whereas the original 2 billion to be raised by Merrill Lynch did.

http://business.smh.com.au/business/someones-going-to-pay-the-price-20081217-70qx.html

[alphaman]

This is very odd. I think the institutions simply used it as an opportunity to extract a greater discount. I mean, come on, is it such a surprise that CBA's bad debts will increase? Are they really that naive?

[oldblue]

This is very odd. I think the institutions simply used it as an opportunity to extract a greater discount. I mean, come on, is it such a surprise that CBA's bad debts will increase? Are they really that naive?

You're right about that ( expectation that bad debts will increase).
But someone messed up in not following the rules for such a capital raising and one can't blame the instos for acting up. After all, they were entitled to assume that all relevant information had been disclosed.

[tech/a]

Anyone got a pre open depth opening average for CBA?
Just interested in seeing how the market views the current debacle.
I have a feeling this may spike low then be bought up to parity.

[captain black]

Anyone got a pre open depth opening average for CBA?
Just interested in seeing how the market views the current debacle.
I have a feeling this may spike low then be bought up to parity.

Match price is 26.24 at the moment John. That'll wiggle around a bit as we get closer to the open I'd imagine.

[sails]

Match price is 26.24 at the moment John. That'll wiggle around a bit as we get closer to the open I'd imagine.

Currently 32.06 :eek: Probably not finished wiggling yet. However SPI futures expiry can do strange things to the blue chips esp in the morning...


EDIT: ...and a few minutes later it's down to 25.99 - bit more than wiggling lol

[cuttlefish]

Is its status still showing as trading halt? I"m assuming it will open with the open regardless as per yesterdays announcement but its not showing as normal to me at the moment its still showing trading halt. :confused:

[sails]

Is its status still showing as trading halt? I"m assuming it will open with the open regardless as per yesterdays announcement but its not showing as normal to me at the moment its still showing trading halt. :confused:

No sign of it on Iress and it appears to be in pre-open. Pretty sure one of the statements yesterday said it would be the earliest of opening this morning or a statement release yesterday.

[Nyden]

No sign of it on Iress and it appears to be in pre-open. Pretty sure one of the statements yesterday said it would be the earliest of opening this morning or a statement release yesterday.

Well, it apparently is still in halt - my question is why?

I would really just like to see what price it opens up as, jeez - what a time to pick up a small buy it was :p:

Probably an ASIC investigation announcement to come, followed up by another botched capital raising, and some write downs! :D

[sails]

No sign of it on Iress and it appears to be in pre-open. Pretty sure one of the statements yesterday said it would be the earliest of opening this morning or a statement release yesterday.

My mistake - it is still in a halt (was looking in the wrong column :o). Wonder what they will do with options expiry today for CBA - will go and check the asx website - failing that will phone the broker.

[cuttlefish]

Well no new updates from the company but still in trading halt in spite of the announcement yesterday saying it would resume at open today .. ?!?:confused:

I phoned the options desk and *IF* it is still in trading halt then the Dec options will still open for trading today at 2pm till close. If the stock doesn't resume prior to close, auto exercise will be based on the close price before the trading halt. (so a ridiculous price for auto exercise imo - so if holding ITM calls based on a $29 price take note! - because there's an opportunity to close out the position between 2 and 4:30 p.m. today.


Of course if it comes out of trading halt prior to 2:00 p.m. then the options will resume as normal and the price for autoexercise will be the closing price of the underlying stock at close today.

Disclaimer: This is my interpretation - refer to original announcement from ASX for clarification don't trust my waffle.

[Aussiejeff]

Well, it apparently is still in halt - my question is why?

I would really just like to see what price it opens up as, jeez - what a time to pick up a small buy it was :p:

Probably an ASIC investigation announcement to come, followed up by another botched capital raising, and some write downs! :D

Stuff the shares.

I just want my NETBANK facility BACK - NOW!!! :( :( (been down since yesterday lunchtime)

Here is their response right now...

------------


***An important message from NetBank

NetBank is temporarily unavailable. This may be due to:

* Very high usage;
* Scheduled maintenance; or
* Technical difficulties.

The Commonwealth Bank apologises for any inconvenience that this may cause.

---------------


CBA A$$holes.... this is the 21st Century? Why are servers always crashing? Idiots.

Edit: Oh! Mebbe the Gummint is running it's Anti-Porn Filter Trial and "Bank" sounds too much like "Wank"!!! BLOCKED?? :)

[sails]

Well no new updates from the company but still in trading halt in spite of the announcement yesterday saying it would resume at open today .. ?!?:confused:

I phoned the options desk and *IF* it is still in trading halt then the Dec options will still open for trading today at 2pm till close. If the stock doesn't resume prior to close, auto exercise will be based on the close price before the trading halt. (so a ridiculous price for auto exercise imo - so if holding ITM calls based on a $29 price take note! - because there's an opportunity to close out the position between 2 and 4:30 p.m. today.


Of course if it comes out of trading halt prior to 2:00 p.m. then the options will resume as normal and the price for autoexercise will be the closing price of the underlying stock at close today.

Disclaimer: This is my interpretation - refer to original announcement from ASX for clarification don't trust my waffle.

That's how I understand it too - here's the link from the ASX options notices: http://www.asx.com.au/products/pdf/notices/2008/Clm23508.pdf

[cuttlefish]

I just want my NETBANK facility BACK - NOW!!! (been down since yesterday lunchtime)

Jeff - it appears to be working now.

I had problems yesterday for quite a while with internet explorer, but then tried with firefox and was able to log in straightaway. (something to consider trying if it stops working again).

[cuttlefish]

Thanks for the link sails. I see that all series will be open not just Dec series.
Will be interesting to see what the spreads look like.



..........100characters

[Aussiejeff]

Jeff - it appears to be working now.

I had problems yesterday for quite a while with internet explorer, but then tried with firefox and was able to log in straightaway. (something to consider trying if it stops working again).


Uh-uh. I always use Firefox, and it was nada for me all yestrday arvo and this morning.

Finally got through just then.. :)

Using the latest 3.0.5 version of FF too (out today).

*phew* - I had some bills and Xmas "gifts" to transfer so wasn't keen on using CBA's freakin' phone system!

Cheers anyway...


aj

[cuttlefish]

Update: Ignore all previous commentary. There are several announcements out and trading will resume at 11:10 a.m. Its in pre-open now.

[sails]

Notice come through on Iress - says opening at 11.10

sorry nothing more to add for the 100 characters :eek:.....................

[Nyden]

Notice come through on Iress - says opening at 11.10

sorry nothing more to add for the 100 characters :eek:.....................

Sure there is. You could have mentioned that as per their announcement, they have finalised the $2 billion - counting the $300 million-something sold to ML at the higher price of $28.34 (bringing the average price up a little).

Certainly looks to be a wee bit of a blood bath though. Bless risk management :) Who says there's no merit to limiting exposure to individual stocks :D

[kennas]

Gents, and others, please remember to try and hide the fact that you are padding posts to comply with the 100 character rule.

I find adding a few funny comments works better than ...........................

Or, damn this 100 character rule!!!

Cheers,
kennas

[sails]

Sure there is. You could have mentioned that as per their announcement, they have finalised the $2 billion - counting the $300 million-something sold to ML at the higher price of $28.34 (bringing the average price up a little).

Actually hadn't read the full thing when I posted - so thanks for completing the post :D. The main thing is the halt has been lifted....

[storchyman]

I would have been a very happy boy if the call i sold the other day @$29 had of been exercised, damn them for resuming trading

[sails]

Gents, and others, please remember to try and hide the fact that you are padding posts to comply with the 100 character rule.

I find adding a few funny comments works better than ...........................

Or, damn this 100 character rule!!!

Cheers,
kennas

Sorry Kennas - I'm not used to this 100 character rule - don't often post in the stock threads - will go back to my corner in the derivates :D

Yours faithfully,

Others :eek:

[Nyden]

I would have been a very happy boy if the call i sold the other day @$29 had of been exercised, damn them for resuming trading

I'd have been a happy boy too, if I had sold in profit before this mess :D Ouch! That knife knicked my finger :p:

It has passed my manual stop, but I'm unsure as to whether this is a panic exit, or a proper downfall :sly: I think I'll leave it, and adjust it a wee bit. Watch this space of regret!

[kennas]

Sorry Kennas - I'm not used to this 100 character rule - don't often post in the stock threads - will go back to my corner in the derivates :D

Yours faithfully,

Others :eek:Ah, sorry Sails, I didn't realise you were an 'other'.

What I actually meant was, 'ladies and gents, and others'.

Hope that's better.

kennas

[kennas]

I've caught the knife at 26.10.

No blood oozing yet.

Have band aides handy.

And 000 on speed dial.

[Ashsaege]

I've caught the knife at 26.10.

No blood oozing yet.

Have band aides handy.

And 000 on speed dial.

I'm expecting to see a short term bounce. But I dont think we have seen the bottom yet... remember bottom pickers get smelly fingers!

I don't hold CBA, though if they drop well below $20 then i might get on!

[cuttlefish]

If buying in for a long term investment I reckon its brave. Short term trading I have no opinion one way or another.

They will probably need to do more capital raisings and there will probably be more unpleasant bad debt surprises before this economic downturn is over imo.

[honey85]

Good one Nick. Love those technical stuff.

To all newcomers like myself, please do not take ppl's advice directly;)

[kennas]

I feel the best trade here is awaiting the completion of the larger degree wave-4 and attempting to short sell, most likely with options or warrants, for the last run lower. A very aggressive trader may attempt to catch the bounce but I'd be very wary.
A decent bounce as you suggested Nick.

When do you look at a short in this circumstance?

Cheers,
kennas

[M34N]

FWIW, bought in a while ago at around $27 mark and sold out this morning abit above the $29 level. Has out-performed some of its peers lately (namely NAB); don't trust holding any stock for too long. CBA seems to love get stuck in those trading ranges for many months as has happened in the past year or so... or at the very least waiting for it to show a clear sign either up or down.

[honey85]

I would love it to match more closely with nick's:p: Quite suprised that CBA is doing better than other banks!

[Aussiest]

What is going on with the CBA?

What does Funds Under Administration mean? As per their latest ASX release?

[tcoates]

RE:

What does Funds Under Administration mean? As per their latest ASX release?

Check out this document.

Funds Management Industry Market Share: Which one to use?

In the funds management industry, there are many measures of funds under management. (FUM) and funds under administration (FUA) published by various ...

http://www.b-d-p.com/images/uploaded/FundsMgtIndustryMarketShare_20061101.pdf

It might reveal what you are looking for?

[mattlaw]

FUA means that is how much investors have invested with them. Also referred to as FUM (Funds Under Management)

[Aussiest]

FUA means that is how much investors have invested with them. Also referred to as FUM (Funds Under Management)

Thanks Matt and tcoate (having a look at your doc now).

That clears things up a bit.

When you say "investors", do you mean "shareholders"?

Or, does it mean people who have their super funds there, or some other type of "investor"?

[cuttlefish]

All banks are tanking today (along with the market). (in fact as I type CBA is down 2.8% and the XAO is down 2.8% - so nothing exceptional about todays fall in CBA's share price).

My view is that all banks are going to continue to suffer - their business is loaning lots of people/businesses lots of money. Their profitability relies on those people/businesses being able to pay that money back, and if they can't, on being able to sell the assets that secure those loans to recoup the funds. Businesses are failing, people are losing their jobs, asset prices are plumetting. The banks are very leveraged to all of this. Look to what has happened to the US and UK banks to get an idea of what we are in store for here in my view.

[Aussiejeff]

All banks are tanking today (along with the market). (in fact as I type CBA is down 2.8% and the XAO is down 2.8% - so nothing exceptional about todays fall in CBA's share price).

My view is that all banks are going to continue to suffer - their business is loaning lots of people/businesses lots of money. Their profitability relies on those people/businesses being able to pay that money back, and if they can't, on being able to sell the assets that secure those loans to recoup the funds. Businesses are failing, people are losing their jobs, asset prices are plumetting. The banks are very leveraged to all of this. Look to what has happened to the US and UK banks to get an idea of what we are in store for here in my view.

Yeah. It's all very well for governments and banks to trumpet on about securities or treasuries being "asset backed this" and "asset backed" that.

The frightening fact is that we are facing a future where country-loads of assets are going to be tipped into the mega "For Sale" basket - then into an even more mega "Can't Be Sold At Almost Any Price Even In A Panic Market" basket.

This is the reason why so many banks are so fearful of lending to small, medium and large businesses - regardless of how much Gummints exhort them to LEND, LEND, LEND. Many of those business "assets" they are gaining covenant over may well become relatively worthless within a short span of time.


IMO


aj

[M34N]

CBA now trading near 10 year lows - on par with a lot of banks across the ASX and even the S&P500... will be interesting to see if these levels get breached. I think technically speaking we may get a bounce off these levels, and today considering the markets are closed on Monday for Australia Day, no-one is willing to hold for any 'skeletons' that may pop out overseas during the long weekend.

Scary chart attached... very bearish to say the least.

[MR.]

Yeah. It's all very well for governments and banks to trumpet on about securities or treasuries being "asset backed this" and "asset backed" that.

The frightening fact is that we are facing a future where country-loads of assets are going to be tipped into the mega "For Sale" basket - then into an even more mega "Can't Be Sold At Almost Any Price Even In A Panic Market" basket.


I'd rather have deposits backed by the Australian Gov' than some of these other countries! Look at our Gov's debt position, although this will now change. Just put on with CBA 3 years at 5.5%. I have faith in our Gov', sorry, not the bank!

[Logique]

Look at the current state of failing companies in the loan book, such as Babcock and Brown, and if there others out there that we (and CBA) don't know about yet. And next month CBA will have to announce results and a dividend.

So a test of the $20 level wouldn't surprise me, that is 10 year lows. If it happens, I'd expect sub $20 CBA shares to cause a lot of economic concern.

I have attached a chart, a fair bit of long term price support at 23-24 (currently at 24.07).

[drsmith]

On Friday evening there was a brief comment on the ABC TV news that in the last two months of 2008 Bankwest had a 20% rise in the number of home loan borrowers having trouble meeting their repayments.

[Julia]

I'd rather have deposits backed by the Australian Gov' than some of these other countries! Look at our Gov's debt position, although this will now change. Just put on with CBA 3 years at 5.5%. I have faith in our Gov', sorry, not the bank!
Three years seems a long time to tie the funds up. Is this money you'd previously had in shares, or do you have a long term preference for cash?

[MR.]

Three years seems a long time to tie the funds up. Is this money you'd previously had in shares, or do you have a long term preference for cash?

Hello Julia. Have read many of your posts before. I do recall you also re-newing some term deposit/s recently as well.

What term have you locked into?

But you are very correct in saying that it is a long time to lock up funds. It is by far the longest I have locked up funds for before. (Hope I don't break it) but if I do it will be worth it. Three years is such a long time away! Would have locked in a little earlier when the rates were better but I was unable.

Yes part of this money was in shares. But I have had 80% of total investments in cash for past 12 months on short termers with the remaining 20% in shares. Have a couple of short termers also at 3mths. For the 3 years I have locked in 40%.

Perhaps you could reply in the thread "Interest Rates" General Chat!

[honey85]

Announcement just been made on asx.

http://business.theage.com.au/business/cba-expects-firsthalf-profit-slump-20090202-7vmv.html

Opinion anyone?


Honey85
newbie

[dirty_harry]

I'd say hang in there for long term. There is a risk of dilution from capital raisings with all the big 4 if things get really bad, but they are ridiculous cash machines in Australia and their competition is being wiped out. They are still making huge profits while making large provisions but I think the key is how bad the housing market gets from here on.

[Econinvestor]

For parallels to Australian banks, you've got to be concerned that US banks, even the large commercial ones like Bank of America, have been hammered so badly. I've been following the stock a bit and it has been hugely volatile. Last night, for example:

Bank of America Corporation BAC 6.00 -0.58 (-8.81%)

Before this it has gone up and down some days near 15 - 20 %.

What is happening there? Does anyone think there are lessons for Australian banks?

[oldblue]

The US banks have been shot down by their exposures to toxic derivatives as well as bad lending.
Aussie banks have had minimal involvement with these derivatives, or so they say and I would think they wouldn't dare to have not come clean about it by now if that was not the case.
Sure, they will have more bad debts and that's what they are increasing their provisions for. I'd be more worried about some of the regionals such as BOQ and BEN who seem to be content to see their provisioning actually fall as a proportion of assets.
Some reduction in divs is almost inevitable but yields will still look pretty good in these times of lower interest rates, even if divs were to be cut in half!

[honey85]

Jumped 7.8% now. Wonder if it would last... would love to see how the market will react to the interest rate cut today.

honey85
newbie

[oldblue]

Jumped 7.8% now. Wonder if it would last... would love to see how the market will react to the interest rate cut today.

honey85
newbie

I would say that the market has already priced in a fairly substantial cut, at least as far as the banks are concerned.
Let's hope it's justified.

;)

[vincent191]

Don't forget short selling is still ban for bank stock. What will happen when the ban is lifted in March? Will today's gains be wiped out when short selling comes back?

Many overseas hedge funds seems to think Australian banks are "over-valued" and are tipped to start shorting Australian banks when the ban is lifted.

I am taking some profit today and be prepared to forego the interim dividend. CBA goes ex-dividend 16 Feb.

Anyone got a different view point???

[Old Mate]

I don't think this surge will hold up so I've pulled out with a nice little profit. Will no doubt be proven wrong though

[nomore4s]

I don't think this surge will hold up so I've pulled out with a nice little profit. Will no doubt be proven wrong though

I think we could see a rally till the 11th of Feb when the full half year results are released and then we could see a sell off, my:2twocents

[Econinvestor]

I think the thing to focus on with CBA is their *phenomenal* revenue and profit performance over a time when everybody was predicting "the new great depression".

A stock is the net present value of its future stream of profits, so news affecting profits is all we need to know. A quick back of the envelope calculation, based on fundamentals, suggests a target price:

The stock was trading at around $43 even as late as October last year, as things were starting to crumble for other stocks. Their expected profit is 2 bn (according to the ASX announcement of Feb 2), which is "16% lower than than the prior comparative period" (read the announcement and check).

Therefore the target price should be $43 less 16%, i.e. approx $37, if we think that the original market valuation -- which incidently stood March through October 2008 -- is accurate.

The current price is $29... need I say more?