Tracking house prices is a ‘national sport’ and sentiment is poor, which doesn’t augur well for holders of ANZ, CBA, NAB and Westpac.
Investors in the big four banks should not expect to see much share price growth over the next year because they traditionally spin their wheels during times ofJason Beddow, the managing director of Argo, said the big four banks are in solid shape from a balance sheet perspective and are likely to keep dividend payouts at reasonable levels.
“It’s very unlikely they will outperform,” he said. “The banks historically haven’t done that well during these times.”has become an obsession across Australia. “It’s a national sport,” Mr Beddow said. “The sentiment is not there,” he said. Constant headlines about falling house prices seep into the national consciousness. “The buyers step back and think they are going to get it cheaper in a few months,” he said.Argo Investments is a big holder of the major banks across its portfolio of 93 stocks and it derives dividend payments which form the cornerstone of its annual profits.
Argo was established in 1946 and Australian Test cricket great Sir Donald Bradman is among its former chairmen. He worked in stockbroking in Adelaide after he retired from the sport.and Rio Tinto should be in for a reasonable next 12 months, with the only caveat being a softening in demand from China which needs to be closely watched for its impact on iron ore prices.
“They will probably be OK,” he said. While BHP should benefit from strong coal prices, the mining giants, which are a staple of many investors’ portfolios, are essentially iron ore companies. The management and boards of both companies appeared to have listened carefully to investors on tighter management of capital and focusing more on investor returns, he said.
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