Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Wednesday, 20 June 2018

'Peak fear' passes for banks

Believe, achieve

Bank share prices surged higher today as the media's apparently boundless energy for Royal Commission stories begins to ebb away.

Telstra saw its share price drop 4.87 per cent to $2.77 as the telco announced an 8,000 net reduction in employees and the monetisation of $2 billion of assets.

Showing another 8,000 staff the door will form part of a truly massive cost reduction for Telstra.

However, it must be said the company doesn't hasn't a great track record with revenue and earnings downgrades, and today proved to be no exception in disappointing the market.

There seems to be a fair chance that the FY2019 dividend gets its wings clipped too. 

Nevertheless the ASX 200 surged 70.5 points or 1.1 per cent higher to 6172.6 at the close.

The XJO hits its highest level in 10½ years, while the accumulation index sits comfortably at a record high.


Positive news here for household wealth, with superannuation funds on track to deliver double digit returns this financial year.

FY2018 will represent a 9th consecutive positive year for super fund returns, which should help to offset the quarterly decline in residential property prices reported earlier in the week.