The big switch from bank stocks
CBA’s 7% slump marks a shift as funds move from banks to miners, leaving super funds holding the bag. Have peak bank valuations come and gone?
Last week, the great barometer stock that is CBA began dropping like a stone, giving back 7% in five days.
Of course, and as we’ve noted before in this very newsletter, CBA has been on a record breaking and at times confounding run over the past year, which has pushed its share price and valuation into the stratosphere. So the 7% decline was still a small move in that context.
But the leg down was still notable, and shaved $18 billion — the equivalent of an entire Seven Group — from its market cap. The other big four bank stocks fared similarly, with NAB off 7%, Westpac down 5.4% and ANZ off 4.5%, all while the broader ASX 200 traded sideways.
What changed? Most market observers are pinning the decline on a switch by large-cap portfolio managers out of the banks and into the miners, sparked by China’s decision to finally enact stimulus measures to support its flagging economy.
