Westpac

[Thomsens]

Westpac up $6 since xmas - what gives ? All time high of $39. What's driving the banks up at the mo? ANZ tracking it.

I plan to ditch WBC and go into Mighty River, since someone reported risk of property market collapsing in NZ.

[Thomsens]

Point taken. Then, what's wrong with selling now and buying back in when it dips below $30 say, which it can do from time to time ?

[BIRMANBOY]

Whos "someone"? I know nothing about property market but commonsense tells me that markets collapse when either there is too much available of whatever it is or there is no demand for whatever it is. So dont think there is too much available unless you are in some god forsaken backwater somewhere. Interest rates are low driving more interest in people trying to get onto property ladder. Dont you think it makes more sense to do your own research instead of listening to "someones"?

Westpac up $6 since xmas - what gives ? All time high of $39. What's driving the banks up at the mo? ANZ tracking it.

I plan to ditch WBC and go into Mighty River, since someone reported risk of property market collapsing in NZ.

[macduffy]

Bear in mind too that WBC's NZ property lending, while the biggest chunk of their business in NZ, represents only a part of WBC's total lending - at a guess, less than 15%, and that it is the parent shares that you are invested in, whether listed on the NZ or Aust register.

A more important consideration would be the health of the Australian property market, particularly in the bigger capital cities.

[Silverlight]

Westpac up $6 since xmas - what gives ? All time high of $39. What's driving the banks up at the mo? ANZ tracking it.

I plan to ditch WBC and go into Mighty River, since someone reported risk of property market collapsing in NZ.

The banks are driven by the continued search for yield, they are trading at undemanding forward earnings multiples, and as long as central banks around the world continue printing money which forces bond yields to stay low, income investors will continue to take on additional risk to get a liveable income stream.

Westpac generates 20% of their net profit from the NZ market, and mainly from interest margins, so while a property correction in NZ would effect their lending growth, it won't impact a great deal on their NZ profits, only through an increase in bad loans provisioning, let alone the entire bank profits.

However this does not mean you ignore the real risk to the banking sector from a correction in the Australian porperty market...


Edit: was typing the same time as macduffy... what he said

[winner69]

One way of looking at it ..... You'll prob get 20 MRP shares for every Westpac one .....that seems a good deal

[iKiwi]

It's driven by expectations of higher profits which will translate to higher dividends or a bonus dividend.

Read the recent valuation report on ASB.

- Retail investors are still aggressive buyers of bank equity as term deposits mature.

If you hold for the dividend then it's not a bad alternative to term deposit.

However, Westpac has run very hard over the past 18 months increasing 75% since August 2011, excluding dividends.

It's trading close to the upgraded A$33.00 fair value. If you have a solid gain since Xmas you might want to consider taking the profits.

[GTM 3442]

One way of looking at it ..... You'll prob get 20 MRP shares for every Westpac one .....that seems a good deal

On that basis, you'd get even more in ALF !

And even more in TRS !

[Thomsens]

Standard and Poor was the someone saying property may take a dive. See link below:

http://www.stuff.co.nz/business/mone...arp-correction

[BIRMANBOY]

I would take that in the context in which it was probably delivered....CYA (covering your arse) endemic in high profile companies trying to remain relevant.

"""Financial ratings agency Standard & Poor's says there is a significant risk of a property crash in New Zealand.
S&P, which has come in for criticism over its failures to adequately assess risk on many investments in the run-up to the Global Financial Crisis, said its "base case scenario" was for medium-term real estate prices continuing to stabilise at current levels. ""

Standard and Poor was the someone saying property may take a dive. See link below:

http://www.stuff.co.nz/business/mone...arp-correction