Our ALGO engine triggered a sell signal in CBA on June 29th at $84.10. The share price hit a low of $81.30 yesterday.
Before the market opened this morning, APRA announced new “capital adequacy” targets with the goal of making the domestic banks safer.
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The regulator will now require a 150 basis point increase to 10.5% in the minimum safety reserves that must be held by the five major banks.
Shares of the “Big 5” have all opened sharply higher in early trade. However, we believe that the local banking sector faces other market headwinds going forward and that lower share prices are likely over the medium-term.
CBA
