The Commonwealth Bank of Australia (ASX: CBA) share price is up 1.2% in morning trade. That’s twice the 0.6% gain posted by the S&P/ASX 200 Index (ASX: XJO) at this same time.
CBA shares closed yesterday at $97.31 and are currently trading for $98.61.
That’s the early day price action. Now here’s why CBA’s boss is bullish on the year ahead.
Enormous surplus savings in the Aussie economy
If you own CBA shares, you’re probably familiar with the bank’s CEO, Matt Comyn.
Speaking on Tuesday at The Australian Financial Review Business Summit, Comyn said, “We’re very optimistic about everything that we’re seeing in the underlying data and looking ahead.”
Comyn noted that Russia’s invasion of Ukraine adds “a pool of uncertainty geopolitically”, while the severe flooding on the east coast “is going to have an economic impact”.
However, he said that following a “sharp contraction in operating performance across lots of sectors of the economy” in January, by the end of the month things began to “pick up right across the economy. And that’s held through.”
According to Comyn (quoted by the AFR):
We’re very positive about everything that we’re seeing in the economy. Obviously, unemployment is phenomenally strong and low. We’ve got enormous surplus savings in the economy. We think consumer and business confidence continues to come back. It’s going to be a couple of years of quite a strong tailwind. I think it’s a great set of economic conditions. It’s a great region to be in, Australia.
CBA estimates that the Aussie economy has grown more than 4% in the past 12 months. And the bank expects similar growth over the next 12 months.
Atop that, “We’re forecasting unemployment to get to 3.8% later this year,” Comyn said. “That’s going to be the lowest in 50 years – on the back of unprecedented monetary and fiscal support. I think we should feel pretty confident about the outlook.”
As for the businesses that have suffered through 2 years of pandemic restrictions, Comyn added:
It’s an opportunistic time, I think, for many businesses, having gotten through a period of extreme difficulty over the last couple of years of enormous uncertainty, and having demonstrated a lot of resilience and adaptability.
How have CBA shares been performing?
Over the past 12 months, CBA shares have gained 13.8%, outpacing the 5.8% gains posted by the ASX 200 in that same period.
Year-to-date the CBA share price is down 3.8%.
The post Own CBA (ASX:CBA) shares? Here’s why the bank’s boss is ‘very optimistic’ for 2022 appeared first on The Motley Fool Australia.
Should you invest $1,000 in CBA right now?
Before you consider CBA, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and CBA wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of January 13th 2022
More reading
- Is the Westpac (ASX:WBC) share price the cheapest bank to buy right now?
- Record $36bn in dividends could help ASX share market recovery
- CBA (ASX:CBA) boss says this presents ‘a lot of opportunity’ for the bank
- ANZ has the largest ASX big four bank dividend yield right now. What?
- WAM boss urges cashed-up ASX 200 companies to buy, invest or pay dividends
The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
from The Motley Fool Australia https://ift.tt/7tpWbBO
Leave a Reply