As the end of the shortened trading week draws to a close, we look at what moved the Commonwealth Bank share price.
The post Commonwealth Bank (ASX:CBA) share price and weekly news wrap appeared first on The Motley Fool Australia. –
The Commonwealth Bank of Australia (ASX: CBA) share price is slipping late afternoon trading, down 0.5%. The fall comes despite a the S&P/ASX 200 Index (ASX: XJO) edging higher, up 0.3% at time of writing.
With the ASX closed tomorrow (and Monday) for the long Easter weekend, we take a look at how and why Commonwealth Bank shares moved this week.
How the Commonwealth share price moved this week
Yesterday, 31 March, was the only day this week that Commonwealth Bank shares gained, closing the day up 0.8%. With a loss of 0.5% on Monday and closing down 0.2% on Tuesday, it looks like CBA will close the shortened trading week down some 0.3%.
Still, Commonwealth Bank shares remain up 35% since 1 October, handily outpacing the 17% gain posted by the ASX 200 over that same time.
Another round of legal woes for CBA
Last week on Monday, March 29, Commonwealth Bank, along with Australia and New Zealand Banking Grp Ltd (ASX: ANZ), settled a lawsuit in the United States that was initiated way back in 2016. CBA shares gained 0.4% following the news.
No sooner was that settled than the Finance Sector Union accused CBA of owing thousands of workers a total of $45 million. The workers have allegedly been unable to take their contractually allowed 10-minute paid tea breaks. CBA has denied the allegations.
This week a new and potentially more damaging legal headache emerged.
The Australian Securities and Investment Commission (ASIC) has commenced legal action against CBA, accusing the big 4 bank of misleading or deceptive conduct as well as alleging CBA violated its Australian financial services licence requirements.
With Commonwealth Bank shares down more than twice as much as the other 3 banks in the big 4 mix today, investors may be taking note.
Why this asset manager prefers Commonwealth Bank shares
With all of the big 4 banks posting hefty share price gains as part of the recovery trade over the past half year, ASX investors are beginning to wonder how much higher, if any, they can go.
Looking ahead, Jason Teh, chief investment officer at Vertium Asset Management, says (quoted by the Australian Financial Review), “The banks may trade sideways. Now it’s all about the relative attractiveness.”
That’s because he believes CBA’s earnings have “more to go from a mean reversion point”.
Teh added, “Given how fast the bad debt profile is rolling off, there’s probably one more result before everything normalises for the banks. I think that’s as good as it’s going to get.”
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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.