Garpal Gumnut
Ross Island Hotel
- Joined
- 2 January 2006
- Posts
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I posted the chart on the Elliot Wave thread Kauri, do you think that technically the 4th wave may break down at this stage?
gg
ANZ caught my attention yesterday, although it booked a lower close than the previous day it was quite an impressive performance in a generally bad day. Managed it on good volume to boot. (From memory the profit ann. is due any day now?)
Cheers
..........Kauri
Hi Julia,
When I said 'run hard' I was talking from a short term perspective ie the last few weeks. ANZ has run from $28 to an intra day high of $31.61 yesterday over a few weeks and in my view was primed for a pull back. It still offers good value long term and is one of the cheapest banks on the market but the new CEO is not giving me too much confidence in the stock short term.
Hi Garpal,I posted the chart on the Elliot Wave thread Kauri, do you think that technically the 4th wave may break down at this stage?
gg
Hi Julia,
When I said 'run hard' I was talking from a short term perspective ie the last few weeks. ANZ has run from $28 to an intra day high of $31.61 yesterday over a few weeks and in my view was primed for a pull back. It still offers good value long term and is one of the cheapest banks on the market but the new CEO is not giving me too much confidence in the stock short term.
OK, I see. I think that although the result was of itself pretty good, it was nonetheless not as good as analysts had been expecting.
I agree with your comments about the new CEO. Here is a link to Air Weekly which gives a realistic assessment of ANZ's current situation. Let's hope the new CEO soon finds his feet and begins to generate the same sort of confidence that John McFarlane did.
http://www.aireview.com.au/index.php?act=view&catid=8&id=7087&setSub=1
Yes, look on business spectator website. Chinese fund has bought about 1% or 1/2 bill dollars worth. I don't know how to put in link.Just heard a rumour that a Chinese investor has taken a large position in ANZ... has anyone else heard anything??
Cheers
.........Kauri
Next few years will be interesting for banks........competition is intensifying coupled with a higher rate environment.....this has been coming for a while and the big banks will still make reasonable single digit growth.........the key will be when the 'miracle' Aussie economy has a bad year which it hasn't for what 16, 17 years......as banks are assetless leaches off the broader prosperity, it will be interesting when Aussies discover wages are not increasing and 7 X average earnings is just too much to pay for their own home.....With the Aussie stock index now made up of banks and mining companies, I just can't wait for the storm to come..disclosure: I own about 29 Nab shares.hehe
just for the record
here's ANZ for the last 2 years (High Low Close) + averages
Also ANZ vs XAO for last 12 months (candlestix) + ditto (percent indicates relative preformance campared to datum of XAO)
PS I plan to do this to a few stocks - please feel free to either
a) help out and divvy the job up between a few of us
b) suggest amendments to graphs
c) request some stocks you'd like me to post (maybe PM me)
d) tell me it's not necessary lol (or too wasteful of memory maybe?)
Credit Quality
The turmoil in global financial markets has impacted a small number of customers and counterparties which is likely to result in higher credit costs.
Consumer credit quality in Australia has remained solid with low arrears and actual losses modestly below initial expectations. The health of the consumer market is reflected in credit card arrears being 5 basis points below levels 12 months ago, high rates of deposit growth, and higher than normal principal repayments on mortgages which have partly offset a high level of
new approvals.
The commercial portfolio remains in good shape overall. A number of reviews have been conducted on key parts of the portfolio which could be impacted by the turmoil and ANZ is comfortable with the overall health of those portfolios.
There are however three specific instances where material provisions are required:
• Exposure to US monoline insurer - between 2005 and February 2007, ANZ entered into derivative transactions which involved selling credit protection on a portfolio of corporate names, and simultaneously buying matching protection from highly rated US financial institutions to remove market risk. This was perceived to involve little credit risk and generated modest trading income.
The significant increase in derivative market credit spreads and volatilities has resulted in a positive mark to market position with the sellers of the credit protection. However one counterparty, which is a US monoline insurer, has been downgraded to a CCC credit rating. The uncertainty around the ability of that firm to meet its obligations under the hedging agreement has resulted in an accounting requirement to raise an Individual Provision of US$200 million based on the current mark to market exposure to that monoline.
The effective economic impact if the monoline insurer fails is that ANZ takes on direct exposure to a high quality portfolio of corporate names. In fact, this portfolio has a higher proportion of investment grade corporates than ANZ’s existing Institutional portfolio. For an actual loss to emerge, around 20% of names within the portfolio would need to default. This would only occur in an extreme environment in which a significant number of companies defaulted globally, which is not anticipated under any current economic scenario.
Whilst the provision will vary with movements in the mark to market, we expect that a significant proportion of the Individual Provision will be written back in future periods.
• Impact of credit rating changes on a commercial property client - a significant credit rating downgrade for one large commercial property client has resulted in a charge to the Collective Provision of around $90 million although at this stage it has not been necessary to make an Individual Provision. A review indicates the factors driving this client’s credit rating downgrade were specific to that client, with the remainder of the commercial property portfolio in good shape.
• Failure of a resources client has resulted in an additional Individual Provision of $51million.
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