ANZ – Opportunity Approaches

Australia and New Zealand Banking Group is a current holding in our ASX 100 model portfolio.

Pressure from lower interest rates more than offset mortgage repricing benefits for the banks and we’ve seen 10%+ correction across the sector.

ANZ, WBC & NAB remain our preferred exposures and we highlight the buying opportunity which is approaching for ANZ.

Buy ANZ within the $25 – $26 price range.

Banks

Australia and New Zealand Banking Group are the first of the big four banks to report annual profits. There was not much to like in the result, Net Interest Margin pressure along with headwinds on cost control, means the outlook was downbeat.

Macquarie Group’s first-half result is due today and it has guided the 2019-20 profit will be “slightly down” on 2018-19.

The market is certain of a dividend cut at Westpac, which reports November 4.

UBS has warned the second-half of 2018-19 will be remembered as the “high watermark” for the sector, ” as the outlook deteriorates in an ultra-low rate environment.

We prefer the short side of CBA.

 

 

ANZ – Algo Buy Signal

Australia and New Zealand Banking Group is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

We see support at $26 and a push higher towards $28.50, will provide an opportunity to sell covered call options to enhance the income return.

ANZ goes ex-div, $0.80 on the 14th of May. An August $29.50 call option will add a further $0.50 per share of income.

For more detail on the call option strategy, please call our office on 1300 614 002.

ANZ – Algo Buy Signal

Australia and New Zealand Banking Group is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

We see support at $26 and a push higher towards $27, will provide an opportunity to sell covered call options to enhance the income return.

ANZ goes ex-div, $0.80 on the 14th of May. An August $27 call option will add a further $0.60 per share of income.

For more detail on the call option strategy, please call our office on 1300 614 002.

ANZ, NAB & Bank ETF Continue To Probe Lower

ANZ is expected to report its FY18 result on 31 October.

The share price has now broken the June low support area and looks vulnerable to more downside pressure.

NAB is scheduled to report its FY18 result on the 1st of November. The next downside target is near the $24.00 area.

Vaneck Vestors Australian Bank ETF has been under ALGO Engine sell conditions since early July. The sell-off so far represents a 20% correction.

 

Australian Banks – Sell Signals Remain Dominant

Our Algo Engine triggered sell signals across the domestic banking names back in June.

Since then, on average, the group has sold off approximately 15% and on a 2-year basis, the sector is now down more than 30%.

ANZ announced this week, that its 2H18 cash earnings will be adversely impacted by $711m of after-tax charges related to legal costs and customer remediation from the Royal Commission.

ANZ releases their full-year NPAT on October 31st.

A second sector risk yet to play-out, is the potential for deteriorating credit quality. This risk has been exacerbated over recent years by “add backs”, where short term earnings are improved through lowering the provisions for bad loans.

Looking ahead, CBA chief Matt Comyn will face the royal commission on Thursday morning, followed by WBC’s Brian Hartzer Thursday afternoon and ANZ’s Shayne Elliott on Friday.