CBA - Commonwealth Bank of Australia

[Bill M]

I'm always on the lookout for new issues but this one from the CBA is really one of the lousiest in years and I won't be participating. The coupon at todays rates is around 6% gross. There are several other hybrids and bonds out there with much better margins. My opinion is that CBA is looking for cheap funding, good luck if they can get it.

 

[Greedy_Kev]

Any ideas on where the euro/china problems is going to effect CBA's next dividends? i feel like selling CBA and taking the gains but i believe that CBA's div should rise from these rate rises atleast 15c (since CBA is going to rake in another 600million and has 1500million shares @ around 40-60% return as div).

I'm not too concern about the price of the shares falling from the crises but more concern about my dividend payments.

Note: I own shares in this company and other banking companies

 

[malachii]

Any ideas on where the euro/china problems is going to effect CBA's next dividends? i feel like selling CBA and taking the gains but i believe that CBA's div should rise from these rate rises atleast 15c (since CBA is going to rake in another 600million and has 1500million shares @ around 40-60% return as div).

I'm not too concern about the price of the shares falling from the crises but more concern about my dividend payments.

Note: I own shares in this company and other banking companies

I wouldn't be too concerned about the divs. Banks' divs rarely (although it has happened) decrease. We are also coming out of a bit of a difficult time for the banks so I would be surprised if they reduced divs below where they are now. People speculate about interest rates and such but short of a mass housing market collapse banks dont lose when interest rates move. They just adjust as necessary.

CBA below $50 is a bargain over recent times (in my opinion). We are seeing CBA move higher against a down trending market at the moment because it was pushed down due to the other banks going ex div recently. We are now seeing the market re-weight and start positioning for CBAs div early in the new year so I would expect to see it increase in price over the next few weeks - so if you wanted to sell - some time around (or just after) Christmas would probably be your best bet. Although obviously if you do - you will miss the next div!

malachii

PS - My opinion only - due your own research and I do own CBA shares and call options as of today.

 

[YELNATS]

CBA announced its intention to release a retail bond to be listed on the ASX.

"The interest rate will equal the sum of the 90 day bank bill rate plus a margin of between 100 and 115 basis points to be determined prior to the launch of the Offer."

Doesn't seem to be as good as PERLS.

I checked this new product out and I agree. It comes nowhere near the most recent PERLS offering, PERLS V which offers the 90-day Bank Bill Swap Rate plus a margin of 3.4%. The retail bond has been confirmed by the CBA with a margin above the BBSR of only 1.05%.

However, that said it is more secure, to be settled before any of the PERLS products in the unlikely event of the financial demise of the CBA.

 

[alphaman]

This retail bond does not make sense. It could be useful to institutions, but for retail investors, online savings account gives you even more security, interest rate is at least as high, and you can use the cash anytime.

 

[Bill M]

I'm not too concern about the price of the shares falling from the crises but more concern about my dividend payments.

Note: I own shares in this company and other banking companies

I have owned CBA shares for a very long period of time. The only time the dividends went down was during the GFC and now the dividends are starting to go up again. I do not plan to sell my shares as I do not believe the dividends will go down from here. Having said that, if there is a GFC mark 2 they could drop again but I am willing to take that risk.

This retail bond does not make sense. It could be useful to institutions, but for retail investors, online savings account gives you even more security, interest rate is at least as high, and you can use the cash anytime.

You are right alphaman, right now Rabo Bank are offering 6.4% at call. PERLS V running interest rate is about 7.8% and Tabcorps Bonds running rate is around 9%. Term Deposits for 5 years at St George Bank are 7%. To me these CBA bonds are a real lousy deal.

 

[boofhead]

The only upside to the bonds I see are that they are floating rate. If you expect BBSW to go up then it could become better value than some 5 year deposits. Plus they will be tradeable so you can exit.

 

[Greedy_Kev]

Thanks you Malachii, I dont think i will sell them, i'm thinking to be a long term investor and want to build a large cash flow. trying to get myself that river of gold

 

[Greedy_Kev]

You are right alphaman, right now Rabo Bank are offering 6.4% at call. PERLS V running interest rate is about 7.8% and Tabcorps Bonds running rate is around 9%. Term Deposits for 5 years at St George Bank are 7%. To me these CBA bonds are a real lousy deal.

yeah but CBA is such a strong performer and has a great track record, its practically risk free, compared to Rabo bank and TAB

 

[prawn_86]

yeah but CBA is such a strong performer and has a great track record, its practically risk free, compared to Rabo bank and TAB

Rabo bank is one of the most respected in the World with a market cap bigger than CBA. I dont see how they are more risky than CBA

 

[oldblue]

Rabo bank is one of the most respected in the World with a market cap bigger than CBA. I dont see how they are more risky than CBA

Quite so. That is, assuming that it's the parent Rabobank who are offering this rate and not some non-guaranteed subsidiary?

 

[Julia]

Quite so. That is, assuming that it's the parent Rabobank who are offering this rate and not some non-guaranteed subsidiary?

I signed on for this 6.4% at call deal a few months ago. Funds are fully guaranteed.
Rabobank are by far the best bank I've ever dealt with - efficient, great website which updates both basic and bonus interest every day, helpful staff and fast service. They leave the other more well known banks for absolute dead.

 

[ginar]

CBA Weekly

CBA should have found support @ $50.04 in the 2nd week of October and
by the 3rd week should have been trading above $51.25 and
heading towards the October highs by the 4th week….

And then continuing higher towards $56.29 in the 4th Quarter.

However, by the 4th Week it was struggling and now looking to move
down into lower support levels.

A number of support levels, as shown need to be verified with lesser timeframes patterns.

With major Support @ $46.22

Your a gun frankiedee , its certainly coming up on my radar now being a bit over 2 months to reporting . recent lows at the 4800 level obvious key . XJO looking shaky at the 4600 level atm so its a coin toss as to whether the 48 holds , definately got my eye on FDs level down there at his major support . CBA being the safe conservative bank they are always rise into report/div outside blackswan events so im keen for an entry some time early - mid dec , ill give a little time for the xjo to sort its support level out so no rush atm .

 

[iced earth]

CBA (COMMONWEALTH BANK OF AUSTRALIA) - 12.02.11:

The share filled the gap (from $ 24 to $ 60) but couldn't passed up that level. we could see the possibility of forming of a Cup and Handle pattern. the target of the pattern could be around $95.

but first the important resistance level of around $60 should be successfully passed up.

 

[nulla nulla]

I wouldn't be too concerned about the divs. Banks' divs rarely (although it has happened) decrease. We are also coming out of a bit of a difficult time for the banks so I would be surprised if they reduced divs below where they are now. People speculate about interest rates and such but short of a mass housing market collapse banks dont lose when interest rates move. They just adjust as necessary.

CBA below $50 is a bargain over recent times (in my opinion). We are seeing CBA move higher against a down trending market at the moment because it was pushed down due to the other banks going ex div recently. We are now seeing the market re-weight and start positioning for CBAs div early in the new year so I would expect to see it increase in price over the next few weeks - so if you wanted to sell - some time around (or just after) Christmas would probably be your best bet. Although obviously if you do - you will miss the next div!

malachii

PS - My opinion only - due your own research and I do own CBA shares and call options as of today.

An excellent call if ever there was one. From sub $48.00 to $55.00 from November to February (capital gain increase of 15%+) and a Div to come with franking credits. No doubt it will retrace (briefly ?) after it goes exdiv. But the future for CBA doesn't too bleak and it will probably recover.

As always DYOR

 

[VSntchr]

CBA divvy paid today. Anyone know what date the DRP shares are allocated?

 

[ginar]

Your a gun frankiedee , its certainly coming up on my radar now being a bit over 2 months to reporting . recent lows at the 4800 level obvious key . XJO looking shaky at the 4600 level atm so its a coin toss as to whether the 48 holds , definately got my eye on FDs level down there at his major support . CBA being the safe conservative bank they are always rise into report/div outside blackswan events so im keen for an entry some time early - mid dec , ill give a little time for the xjo to sort its support level out so no rush atm .

6 months on and we are back to a similar scenario with the 2011 lows around 49.20 levels being support . CBA report 10 aug and are ex 15 aug . entry before end of june is on my agenda .............

 

[ginar]

6 months on and we are back to a similar scenario with the 2011 lows around 49.20 levels being support . CBA report 10 aug and are ex 15 aug . entry before end of june is on my agenda .............

chart

 

[nulla nulla]

Like a lot of shares yesterday, CBA dropped like a stone into irrationly oversold territory. The downward spike was a buy signal for the bold and cashed up, unfortunately I am neither.

I follow cba (in a similar manner to "pairs trading") using it as a bench mark for the banking sector in general and a close comparison to wbc due to their weighting in mortgages.
I have formed the opinion that CBA is worth a buy and hold when it dips under $50.00, with a view to taking profit between $52.00 - $54.00. This gives a 4% to 8% return for a short term hold. Buying in yesterdays spike down would set up an even better return.

Additionaly if you hold for the required period of time and take a dividend with franking credits and still manage to sell with a capital gain, your profit is even higher.



My only problem with buying cba is the price range is higher than I like, as I can buy 2 wbc shares for less outlay and make the same sort of return on a swing trade without going overweight in my portfolio.

 

[nulla nulla]

A record profit announced today and the market response could only be described as "luke warm" at best.

All the banks were up today but cba only half as much % wise as the rest. What do the analysts reasonably expect in this economic environment?