A good day yesterday as once again we saw the range hold. Expect a push up into the top of the range today.


Rinse and repeat

Commonwealth Bank (CBA) announced yesterday that Ian Narev will be ‘retiring’ next year. Have to feel a little sorry for Narev, he seems to have been made a scapegoat for all the ills of the bank. Culture must be instilled from the top and he has paid a heavy price. Given that others were involved in the various scandals, we should expect more quieter departures in the bank. Narev is 50 and has been in the top job in the country for 6 years which for a bank CEO is a long time. Only Nick Moore at Macquarie has been at the helm longer, so it is hardly a surprise and even before the latest AUSTRAC issues there was talk of his retirement. It would seem unlikely that the board and new Chair Catherine Livingstone look to ‘transform’ the company with an agent of serious corporate change. An institution such as CBA is a juggernaut and hard to turn around or even change direction. The next hire will be a safe pair of hands no doubt and we will not see the dramatic shift in strategy that we saw at ANZ under new CEO Shayne Elliott. With profits of nearly $10bn, the business model isn’t broken, in fact Narev has done an excellent job with one or three exceptions. His departure will help change the culture without changing the model. Investors need not worry about a new CEO but the premium the banks holds may over time dissipate.

Although big miners were better overnight given the fall in gold, oil and iron ore and the topping out in copper, we may not see the resource sector push ahead that much. Remember we did anticipate a better US market. US futures were strong yesterday as the risk of an all-out war seem to have cooled. Banks and industrials to lead.

Results will be back in focus.

ANZ numbers this morning. Cash profit of $1.79bn up 5.3%. NIM was stable. CET1 ratio was 9.8% and if the new ri This result will help the sector. If the risk weighted models for housing were adopted the CET1 ratio rises to 10.5%. Looks like a solid result. This will help the sector and coupled with the positive move yesterday from BEN will help sentiment recover after the CBA issue. BEN had a very good day with the shorts having to cover. Nearly 8% of the company is currently shorted which exaggerated the move but a good result none the less.


More this afternoon…..