CBA Offloads Its Insurance Arm

Posted on | by Todd | Leave a Comment on CBA Offloads Its Insurance Arm

Shares of CBA opened higher in early trade on the news that the bank has sold its troubled insurance business to the Chinese owned AIA Group for $3.8 billion.

The sale of Comminsure Life was largely considered a fire sale considering several problems involving denying payments to policyholders and pressuring medical assessors to reject client’s claims.

Our ALGO engine gave a sell signal in CBA on July 4th at $84.00. We consider this bounce in price as corrective and still see scope for CBA shares to return to the low $70.00 handle.

Commonwealth Bank

 

FOMC Overview

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As expected, the US FOMC voted to keep rates unchanged last night but signalled that it still expects one more rate hike before the end of the year.

If that’s the case, then the FED Funds target will have been lifted from .25% to 1.50% in just over 12 months. The “Dot plots” were revised slightly lower from 3.0% to 2.75% by the end of 2019.

The response from US stock indexes was muted, but we expect the combination of higher borrowing costs and the reduction of the FED balance sheet to temper any significant gains in US equities into the end of the year.

 

 

ALGO Update: Stay long CWN

Posted on | by Todd | Leave a Comment on ALGO Update: Stay long CWN

Our ALGO engine triggered a buy signal on CWN at $11.43 on August 11th.

With the current price around $11.77, the trade has been slow to develop but we still prefer the long side.

CWN will go ex-dividend tomorrow and pay shareholders 30 cents, with 60% franking.

Looking across the gaming sector, we see improving conditions for CWN, SGR and Tabcorp. Seasonal growth in tourist numbers will benefit all three of these names.

We see scope to reach upside targets of $12.80 in CWN, $5.10 in TAH and $5.75 in SGR over the medium-term. 

Crown Resorts

Tabcorp

Star Entertainment

Newcrest Goes Ex-Dividend Today

Posted on | by Todd | Leave a Comment on Newcrest Goes Ex-Dividend Today

Shares of Newcrest are trading lower in early trade as the company went ex-dividend today.

Shareholders will be paid a 9.5 cent dividend, fully-franked, which we expect to increase over the next 6-month period.

The share price has found good buying support in the $22.00 area in recent sessions and we consider the $21.80 to $22.00 levels a reasonable buy zone.

In addition, we have noticed a “higher low” pattern in Evolution Mining (EVN). Our ALGO engine has not yet triggered a buy signal and we will update when that happens.

With a positive base case for spot gold moving higher, we would look for the domestic gold mining sector to improve into year end.

Newcrest Mining

Evolution Mining