Category: Stock Market

The Qantas Airways Limited (ASX: QAN) share price closed 1.08% higher at $4.69 today after one of its partially acquired companies posted optimistic FY22 results.

Alliance Aviation Services Ltd (ASX: AQZ) announced a 21% increase in total revenue to $369.4 million. For FY2023, it expects to see increased profitability due to the investments it made in FY2022 and a growing contract client base.

Qantas bought a 19.9% stake in Alliance Aviation in February 2019, and in May this year, the airline announced it would buy the remaining shares.

Let’s learn more about why investors were bullish today on this iconic ASX airline share.

What happened with Alliance?

Alliance Aviation said that in addition to its strong revenues, earnings were also stable from its contracted revenue clients. 

Another positive highlight from the report was that flight hours grew 25% to 47,519, and this growth trend is expected to continue in the future.

However, its operating experiences and finance costs grew significantly during the same period, contracting its earnings before interest, taxes, depreciation, and amortisation (EBITDA) by 27%, for a $47 million total loss.

Other developments fueling a Qantas lift today?

Alongside the Alliance results, today’s Qantas share price boost may be attributed to other developments impacting the airline industry. Airline rivals Southwest Airlines Co (NYSE: LUV) and Air New Zealand (ASX: AIZ) both made gains today, closing at 2.45% and 2.56%, respectively.

Shares in these companies might have lifted due to a reduction in the oil price, which is a major cost to airlines. According to Bloomberg, the price of WTI crude oil has fallen 0.41% today, while Brent Crude also fell 0.27%.

Jet fuel costs airlines around 11% of their operating expenses on average.

Travel takes off

On the demand side, there is also a major tailwind. According to the World Tourism Organisation, international travel is set to soar to 55% to 70% of pre-COVID travel this year. That’s a 90 to 140 per cent increase from 2021 levels.

The pent-up demand for travel may be unleashed during this period, similar to the post-pandemic spending spree seen in countries that spent months or longer under lockdown.

New Zealand, one of Australia’s favourite travel destinations, fully reopened its borders to international travellers on 31 July and resumed the processing of visas.

On a global scale, Kayak reported that 167 countries are open to travel with no COVID-19 testing or quarantine required, while 32 are open to travellers with testing. 

People now have the freedom to travel to most countries without the inconvenience of self-isolating, including the world’s most popular tourist destinations. Many haven’t visited these places in months or sometimes years.

Thus, the share price gains of major airlines such as Qantas could reflect these changes in the demand and cost of international travel.

Qantas share price snapshot

Gains made by Qantas today outperformed the S&P/ASX 200 Industrials Index (ASX: XNJ), which delivered a 0.09% return.

The Qantas share price is currently down 8.9% year to date, trailing behind the S&P/ASX 200 Index (ASX: XJO), which has contracted 6.84% over the same period.

The airline’s market capitalisation is $8.85 billion from today’s gains.

The post Why did the Qantas share price fly higher today? appeared first on The Motley Fool Australia.

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More reading

• Alliance Aviation share price lifts despite full-year loss
• Why is the Qantas share price beating the ASX 200 today?
• ‘Downside is less severe’: Why some brokers are still bullish on the Qantas share price
• Why Alliance, Aurizon, MVP, and Suncorp shares are dropping today
• Qantas share price descends as management recruited for ground-handling work

Motley Fool contributor Matthew Farley has no position in any of the stocks mentioned. 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 recommended Alliance Aviation Services Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Megaport Ltd (ASX: MP1) share price jumped 3.27% on Thursday to end the day’s trading at $8.84.

Megaport shares seem to have benefitted from an ASX tech tailwind started by a positive session from its peers listed on the Nasdaq Composite (NASDAQ: .IXIC) overnight. 

On top of that, broker Jefferies initiated an upgrade in the Megaport share price target from $5.94 to $9.60

Before diving into the performance of the NASDAQ and the broker upgrade, here is a quick recap of Megaport’s full-year financial results, which the company released on Tuesday.

Megaport FY22 recap

Highlights of the Megaport FY22 results included: 

• Revenue jumped 40% from $78 million to $109 million 
• Net loss improved by 12% from ($55 million) to ($48.5 million) 
• Operating cash flow went backwards from ($8.6 million) to ($9.8 million)
• No dividend declared

The Megaport share price soared 10% on the back of the results on Tuesday, but fell almost 5% on Wednesday.

Broker raises Megaport share price target

Broker Jefferies liked the financial results, pushing up its price target to $9.60 from $5.94. 

According to Thomson Reuters, Jefferies said, “This result proves that management is capable of delivering strong operating leverage.”

While these set of results indicate an improvement in profitability, I would not consider it to be a strong display of operating leverage. 

Investors ought to be mindful of the consistent decline in net income since the cloud networking company listed in late 2015. 

I would prefer to see more evidence of improvement in profitability before putting it in such a basket.

The broker upgraded its guidance for FY23 and FY24 revenue by 9% and 14% respectively. 

Jefferies also flagged risks in the tightening of IT expenditure in a recession and higher capital expenditure (capex) due to inflation and supply chain issues. 

Despite noting these risks, Jefferies has maintained a “hold” rating. 

NASDAQ rallies overnight 

The NASDAQ includes tech giants like Apple (NADSAQ: AAPL) and Microsoft (NASDAQ: MSFT). It rose by 2.9% yesterday, bringing its gains to 20.7% from lows recorded in June. 

According to the Financial Times, consumer prices in the US rose 8.5%, falling below economists’ forecasts of 8.7%. Further, there was no increase in inflation in July as opposed to a 1.3% monthly rise in June. 

This might partly explain the recent rally on the NASDAQ and the flow-on effect on tech and growth stocks on the ASX.

Some notable tech stocks like Life360 Inc (ASX: 360) and Block Inc (ASX: SQ2) experienced jumps of 13% and 8% today respectively. 

Megaport share price snapshot

The overall equities market has been engulfed in a sea of red this year and the Megaport share price is no exception. 

Year to date, the Megaport share price has more than halved, dropping by 53%. However, in the last month, the Megaport share price has rallied to jump by nearly 44%. 

The S&P/ASX 200 Index (ASX: XJO) is down 7% year to date but has clawed its way back in the last month to post a gain of 7%. 

Megaport suffered from the big tech and growth sell-off this year. The Megaport share price is showing signs of recovery, so it could be worth monitoring over the short to medium term. 

The post Is the Megaport share price back on track after a broker upgrade? appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy today
• What’s going so wrong for ASX 200 tech shares on Wednesday?
• Is the Megaport share price a buy following the company’s latest results?
• Here are the top 10 ASX 200 shares today
• Why Coronado Global, Lake, Megaport, and REA shares are storming higher

Motley Fool contributor Raymond Jang has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Block, Inc., Life360, Inc., MEGAPORT FPO, and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool Australia has recommended Apple and MEGAPORT FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Evolution Mining Ltd (ASX: EVN) share price has been in fine form in the past month.

Since 11 July, the gold miner’s shares have gained 12.65%, making it one of the best performers across the sector.

In retrospect, the Newcrest Mining Ltd (ASX: NCM) share price has fallen by 2.53% across the same timeframe.

At market close, the Evolution Mining share price finished the day taking a slight breather to exchange hands at $2.76, up 1.10%.

What’s driving Evolution Mining shares higher?

The sharp acceleration in the price of gold has boosted investor sentiment leading investors to snap up Evolution Mining shares.

Gold prices recovered lost ground on Wednesday after US consumer price inflation data slowed to an 8.5% yearly rate in July.

This has sparked confidence in the yellow metal as the Federal Reserve could slow down its aggressive rate hikes.

When the US central bank rises interest rates, the price of precious metals gets dragged down. However, investors appear to be positive for the moment which is giving rise to the Evolution Mining share price.

Currently, the price of gold has rebounded toward US$1,785 an ounce, an increase of almost 2% in the past week.

If the Reserve Bank of Australia takes a breather on its monetary tightening policy next month, then Evolution Mining shares could receive another boost.

The company is scheduled to release its full year results for the 2022 financial year on Thursday 18 August.

What do the brokers think?

A number of brokers rated the Evolution Mining share price with different price points in late July.

According to ANZ Share Investing, the team at UBS cut its 12-month price target by 1.7% to $2.90 apiece.

Based on the current share price, this implies an upside of 5% for investors.

On the other hand, Morgan Stanley analysts reduced their rating on Evolution Mining shares by 2.1% to $2.35. Its analysts had a bearish outlook noting that the company’s shares are slightly overvalued for now.

This implies a current downside of 15% from where it trades today.

The post Why is the Evolution share price up 13% in a month? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• Here are the 3 most heavily traded ASX 200 shares on Friday
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. 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 Scott Phillips.

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The Mirvac Group (ASX: MGR) share price was on the move today after the property developer released its full-year results for FY22.

Mirvac shares opened the day at $2.17 and reached a high of $2.205 in early trading.

At the market close, the Mirvac share price finished at $2.17, up 3.83% for the day.

Investors raise Mirvac share price despite modest profit gain

The highlights of Mirvac’s results are as follows:

• Statutory profit of $906 million, up 0.55% on the prior corresponding period (pcp)
• Operating profit after tax of $596 million, up 8% on pcp
• Operating earnings before interest and tax (EBIT) of $773 million, up 10% on pcp
• Full-year distributions of $404 million to shareholders, up 3% on pcp
• Operating earnings per share (EPS) of 15.1 cents per share, up 8%.

In its statement, Mirvac said it was “delivering a strong result ahead of guidance, with a statutory profit of $906 million and operating profit of $596 million, representing 15.1 cents per stapled security (cpss)”.

The increase in profits and distributions on FY21 is modest. However, FY22 was “a more challenging operating environment”, says Mirvac CEO and managing director Susan Lloyd-Hurwitz.

What else happened in FY22?

Mirvac reported that it exchanged approximately 2,900 residential apartments and settled 2,523 in FY22. This is in line with the company’s settlement target of more than 2,500 lots.

The company also reported on its sustainability initiatives. It said it “achieved net positive carbon for scope 1 and 2 emissions nine years ahead of our target”.

Over the 12-month period to 30 June, the Mirvac share price lost approximately 30% of its value.

What did management say?

Lloyd-Hurwitz said:

There is no doubt that FY22 presented a more challenging operating environment. We experienced the ongoing impacts of COVID-19, supply chain issues, labour shortages, rising inflation and interest rates, geopolitical tension, and extreme wet weather, particularly across the east coast of Australia.

Despite this, we have delivered a strong financial and operational result ahead of guidance, demonstrating the continued resilience of our people and the value of our integrated and diversified business model.

At the same time, we maintained a strong balance sheet and capital position, with sufficient liquidity and appropriate hedging. Combined with our planned $1.3bn of non-core asset sales, this helps ensure that we are well placed to capitalise on opportunities as they emerge, so that we can continue to deliver value to our securityholders into the future.

What’s next?

In its FY22 report, Mirvac said it was now managing $10.2 billion worth of assets, up 3% on the pcp.

But that number is about to skyrocket as a result of Mirvac scoring the management rights to the $7.7 billion AMP Wholesale Office Fund (AWOF) in July.

AMP shareholders voted to give Mirvac control of the fund. As my colleague Brooke reported at the time, the deal will lift Mirvac’s capital under management by about 76%. Mirvac shareholders loved the news and pushed the share price 1% higher on the day.

Lloyd-Hurwitz said the deal was “accelerating our Funds Management strategy, broadening our investor base, and introducing new accretive income streams”.

Mirvac will take control of the fund in mid-October.

Regarding the softer residential property market, Lloyd-Hurwitz said selling conditions had “normalised” but “the underlying fundamentals of the residential market in which we operate remain solid”.

She said:

Our apartment projects are expected to complete into an undersupplied market, positioning us well to capture demand. Our brand, focus on owner occupiers, diversity of product, and reputation for quality, will help us to remain resilient in a rising interest rate environment.

Mirvac said if there was no material change in the operating environment, the company was targeting operating earnings of at least 15.5 cents per share and distributions of at least 10.5 cents per share in FY23. It maintains the same goal of settling more than 2,500 residential lots in FY23.

Mirvac share price snapshot

The Mirvac share price is down 28% in the year to date. But like many other ASX 200 shares, it has rebounded in the past month and is up 4.83%.

The post Mirvac share price lifts on ‘strong result ahead of guidance’ for FY22 appeared first on The Motley Fool Australia.

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More reading

• Why Block, Lake, Mirvac, and QBE shares are racing higher
• 2 ASX 200 shares ready for a massive resurgence: experts 
• AMP share price in focus as Mirvac wins control of $7.7 billion office fund

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. 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 Scott Phillips.

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What a sorry story the Magellan Financial Group Ltd (ASX: MFG) share price has been for investors over the past few years. It was only back in early 2020 that this ASX 200 fund manager was hitting all-time highs of over $74 a share.

Today, Magellan closed at $15.32 a share, up 3.51% for the day.

Sure, Magellan has bounced lucratively (around 30%) off of its 52-week low of $11.10 over the past month or so.

But the company is still down by almost 20% in 2022 alone, and by 66% over the past 12 months. It’s also down around 80% from the all-time high of February 2020.

Fi fi fo FUM

Unfortunately, the problem Magellan is having is arguably structural. As a fund manager, Magellan’s bread and butter is funds under management (FUM). A fund manager like Magellan manages its client’s money on their behalf. But for this privilege, it clips the ticket.

Typically, funds like Magellan charge fixed fees on the total capital invested, plus a performance fee if the fund’s performance exceeds its benchmark.

Thus, the only real way for a fund manager like Magellan to grow its earnings over time is by either delivering consistent outperformance or growing its FUM.

If it can do both, it can unlock a flywheel effect, where investors are drawn to the manager for its ability to deliver outsized returns, thus increasing FUM.

But unfortunately for this company, the inverse scenario, which one could pessimistically call a ‘death spiral’, seems to be occurring.

Back in February 2020, Magellan reported that its FUM stood at $104.31 billion.

Last week, the company reported its FUM, as of 31 July, was just $60.2 billion, having slid around $1 billion from the prior month.

The reasons for this loss of confidence from investors are many. We have the dramatic departure of Magellan co-founder Hamish Douglass to consider. As well as the loss of several high-profile investment mandates, such as the one from St James’ Place.

What’s gone so wrong with the Magellan share price?

But the root of Magellan’s problems arguably comes from the performance of its funds themselves.

Take the company’s flagship Global Fund. As of 31 July, the Magellan Global Fund has lost 9.8% over the preceding 12 months, against its benchmark’s (the MSCI World Net Total Return Index) loss of 4.31%.

Over the past three years, this fund has averaged a performance of 2.83% per annum, trailing the benchmark’s average of 9.13%. Over ten years, the fund has averaged 14.01% against the MSCI’s 14.83%.

That’s probably enough to prompt investors to ask what they are paying a management fee of 1.35% per annum for.

Magellan’s High Conviction Fund, which investors pay a fee of 1.5% per annum to invest in, hasn’t done much better. It’s averaged a negative return of 0.46% per annum over the past three years. 

So we have underperforming funds, and ongoing bleeding of FUM – perhaps an inversion of the flywheel effect we discussed earlier.

It’s too soon to say if Magellan is in such a ‘death spiral’. But unless the company can boost its funds’ returns, it could struggle to attract additional FUM going forward.

At the current Magellan share price, this ASX 200 fund manager has a market capitalisation of $2.83 billion, with a price-to-earnings (P/E) ratio of 8.5.

The post Is the Magellan share price caught in a death spiral? appeared first on The Motley Fool Australia.

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More reading

• What’s $1 billion between friends? Magellan share price shrugs off latest FUM figures
• Is the Magellan share price a buy for its big dividend yield?
• Morgan Stanley forecasts Magellan share price will sink 35%
• Why has the Magellan share price leapt 21% in a week?
• Here are the top 10 ASX shares today

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. 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 Scott Phillips.

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The BHP Group Ltd (ASX: BHP) share price has suffered a sizeable drop over the last six months, falling by around 20%.

Considering the massive size of the BHP market capitalisation, the 20% drop represents a large fall in dollar terms.

But, can things turn around quickly or will BHP shares be in the doldrums for some time?

Don’t forget, BHP no longer owns a petroleum division, so it’s not benefitting from the high prices and useful cash flow.

When it comes to commodity ASX shares, they are heavily reliant on the resource price. A rise in the resource price can largely add to profit, which can then help the share price.

But, the opposite has been happening with the iron ore price, which has dropped substantially in the last few months.

According to reporting by the Australian Financial Review, analysts at Morgan Stanley are not confident about iron ore this year

Will there be an iron ore recovery for BHP?

In possible bad news for the BHP share price, Morgan Stanley commodities strategist Marius van Straaten said:

We see little reason to be bullish on iron ore into year-end. Any real rebound in the iron ore price hinges on a China-led steel demand recovery.

One of the biggest questions for iron is what happens with steel in China. As reported by the AFR, Chinese property construction accounts for around 40% of steel demand. June property starts were down 45%.

It has also been reported that mortgage arrears are increasing on properties currently being constructed in China. Borrowers don’t want to pay when no progress is being made on the construction of their property.

Van Straaten said:

While this latest situation might be contained and property activity might not slow further from current levels, there are as yet no signs of a meaningful recovery.

Low steel profit margins may also have been hurting steel production within the Asian superpower. But, the AFR reported that Macquarie has pointed out that steel margins have been improving recently thanks to rising steel prices and a weaker iron ore price.

Is the BHP share price an opportunity?

Part of the investing thoughts about BHP at the moment include the attempt to buy OZ Minerals Limited (ASX: OZL) with a cash bid of $25 per share.

As reported by my colleague Tony Yoo, the broker Morgans said:

If nothing else, this development should reduce any concern that BHP might have been considering a larger, more transformative acquisition.

There has been a consistent fear from some that history would repeat itself and BHP eventually [becomes] attracted to a +$100 billion acquisition/merger at a high point in the cycle. Instead, BHP has remained on-strategy and focused.

Morgans’ price target of $48.40 on the BHP share price suggests a bounce back over the next 12 months of more than 20%.

Macquarie is another broker expecting good things for BHP shares with a price target of $48. That also implies a rise of more than 20%.

However, UBS is much less optimistic. It’s ‘neutral’ on the business, with a price target of just $35.50. That implies a further drop of around 10%.

The BHP share price closed 2.22% higher on Thursday at $39.15.

The post Down 20% in 6 months, what’s next for the BHP share price? appeared first on The Motley Fool Australia.

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More reading

• 3 rising ASX shares to buy that have passed the bottom: expert
• Top brokers name 3 ASX shares to buy today
• 2 ASX 200 blue chip shares brokers rate as buys
• What’s so good about copper anyway?
• What could another acquisition mean for BHP shares?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. 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 recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) regained its composure today, surging higher led by discretionary and real estate shares. The index closed 1.12% higher at 7,071 points on Thursday.

Only one sector finished in the red today. The S&P/ASX 200 Utilities Index (ASX: XUJ) plunged 1.5%, weighed down by the share price of APA Group Ltd (ASX: APA), despite the company’s silence.

Meanwhile, the S&P/ASX 200 Consumer Discretionary Index (ASX: CDJ) led the gains, leaping 2.2%.

It might have been boosted by news out of the US. Inflation in the nation slowed in July, likely leading some to hope the Federal Reserve might slow its approach to rate hikes.

Perhaps unsurprisingly, the news seemingly brought joy to Wall Street. The Dow Jones Industrial Average Index (DJX: .DJI) and the S&P 500 Index (SP: .INX) lifted 1.6% and 2.1% respectively overnight while the tech-heavy Nasdaq Composite Index (NASDAQ: .IXIC) rose 2.9%.

That likely helped the S&P/ASX 200 Information Technology Index (ASX: XIJ) rise 1.3% today while the S&P/ASX 200 Real Estate Index (ASX: XRE) gained 2% amid earnings from GQG Partners Inc (ASX: GQG).

But which share outperformed all others on Thursday to take out the top spot among its ASX 200 peers? Keep reading to find out.

Top 10 ASX 200 shares countdown

Today’s top performing ASX 200 share was none other than – drum roll please – lithium favourite Lake Resources N.L. (ASX: LKE). The stock gained 21% today despite no news being released by the company. Find out what’s been going on with Lake Resources lately here.

Today’s biggest gains were made by these ASX shares:

ASX-listed company	Share price	Price change
Lake Resources N.L. (ASX: LKE)	$1.595	20.83%
Life360 Inc (ASX: 360)	$5.38	13.26%
City Chic Collective Ltd (ASX: CCX)	$2.35	12.98%
Novonix Ltd (ASX: NVX)	$3.27	10.85%
Block Inc (ASX: SQ2)	$126.40	8.42%
Pinnacle Investment Management Group Ltd (ASX: PNI)	$11.47	7.2%
Pointsbet Holdings Ltd (ASX: PBH)	$3.80	6.44%
Seek Limited (ASX: SEK)	$24.64	5.43%
Netwealth Group Ltd (ASX: NWL)	$13.61	5.1%
Brainchip Holdings Ltd (ASX: BRN)	$1.16	4.98%

Our top 10 ASX 200 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why Block, Lake, Mirvac, and QBE shares are racing higher
• Why are ASX 200 tech shares flying higher on Thursday?
• Why has the Block share price exploded 9% on the ASX today?
• Why is the Novonix share price leaping 11% on Thursday?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc., Life360, Inc., Netwealth, PINNACLE FPO, and Pointsbet Holdings Ltd. The Motley Fool Australia has positions in and has recommended APA Group, Block, Inc., Netwealth, and PINNACLE FPO. The Motley Fool Australia has recommended Pointsbet Holdings Ltd and SEEK Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Commonwealth Bank of Australia (ASX: CBA) is the only major big four bank share to release its annual result this month. But what did the result mean for National Australia Bank Ltd (ASX: NAB) shares?

Investors may think that the big four ASX banks of CBA, NAB, Australia and New Zealand Banking Group Ltd (ASX: ANZ) and Westpac Banking Corp (ASX: WBC) are all roughly the same. They are pretty similar, lending is the key profit driver. But, they are somewhat different.

If a potential borrower needs a mortgage they need to pick one bank. A gain of market share for one bank could mean the loss of market share for another.

And why would CBA’s result matter for NAB shares? Well, investors may want to take note of the strong growth that CBA is seeing in one particular area, which NAB is known for.

CBA’s growth to impact NAB shares?

NAB has a reputation as being a business bank.

CBA is more focused on household lending. But, the FY22 result showed that CBA is growing quickly in the business sector.

The biggest bank reported that its business lending grew by 13.6%, or $15.4 billion. This was 1.3 times the growth rate of the total system.

The amount of business deposits grew at an even faster rate, rising by 15.1% or $23.9 billion in dollar terms. That was 1.4 times the growth rate of the overall banking system. CBA also said that during FY22, its business lending margins increased.

CBA said that it is focused on continuing to differentiate its transaction and merchant banking propositions, and digitising the business banking experience. The bank said it wants to be Australia’s “leading business bank”. CBA said:

Our business banking strategy is centred around the quality of our customer relationships and being their main financial institution. We are proud of the strong customer relationships we have developed through the strength of our transaction banking, business lending and merchant offerings.

Our focus is to deepen these relationships by partnering with our customers and proactively meeting more of their needs. This, combined with our superior customer experience and leading physical and digital distribution, will allow us to exceed customer expectations and deliver sustainable growth and outperformance.

CBA also said that it wants to be at the forefront of how Australian businesses pay and get paid.

How bad is this for NAB shares?

Well, time will tell. CBA isn’t specifically targeting NAB with this initiative. There are more lenders out there than just CBA and NAB.

There could be enough of a business lending market for both CBA and NAB to do well.

NAB said in its FY22 half-year result that its business lending increased from $220.8 billion at September 2021 to $237.1 billion in March 2022. NAB’s third quarter report also showed more business lending growth.

In NAB’s quarterly update, its cash earnings grew by 6% year over year. It was an increase of 10% of cash earnings before tax and credit impairment charges.

Management confident on the future

With the release of the FY22 third quarter, NAB CEO Ross McEwan said:

We have a clear strategy and executing this with discipline is our key priority. We will continue to focus on getting the basics right, managing our bank safely and improving customer and colleague outcomes to deliver sustainable growth and improved shareholder returns.

The post What does CommBank’s latest update mean for NAB shares? appeared first on The Motley Fool Australia.

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More reading

• Is the CBA share price a buy after the bank’s FY22 results?
• Does this signify more bad news for ASX BNPL shares like Zip?
• The CBA share price looks downright expensive
• CBA share price slides today despite an 11% FY22 earnings leap
• Here’s everything you need to know about the latest CBA dividend

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. 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 recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Finally, a decent day of trading for the S&P/ASX 200 Index (ASX: XJO). After an indecisive few trading days, the ASX 200 is today upswinging with a vengeance, up 0.91% at the time of writing at around 7,060 points.

The post Here are the 3 most heavily traded ASX 200 shares on Thursday appeared first on The Motley Fool Australia.

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More reading

• Why AMP, OFX, Rio Tinto, and Telstra shares are dropping
• Why Block, Lake, Mirvac, and QBE shares are racing higher
• Why has the Block share price exploded 9% on the ASX today?
• Here’s why the BetaShares Nasdaq 100 ETF (NDQ) is outperforming the ASX today
• Why is the Core Lithium share price rocketing 5% today?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. 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 Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) us having a very strong day on Thursday. In late trade, the benchmark index is up 1% to 7,061.2 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

AMP Ltd (ASX: AMP)

The AMP share price is down 2% to $1.14. Investors have been selling this financial services company’s shares following the release of its half year results. Not even the promise of a $1.1 billion capital return has been able to boost its shares today. Investors appear to be focusing more on its underlying after tax profit of $117 million, which was down 24.5% on on the prior corresponding period.

OFX Group Ltd (ASX: OFX)

The OFX share price is down almost 6% to $2.61. This morning the foreign exchange company released its annual general meeting update. At the event, the company reaffirmed its guidance for FY 2023. However, judging by its share price performance, investors appear to have been hoping there would be an upgrade to its EBITDA guidance of $55 million to $60 million.

Rio Tinto Limited (ASX: RIO)

The Rio Tinto share price is down 4% to $95.34. The catalyst for this has been the mining giant’s shares trading ex-dividend this morning for its upcoming dividend. Eligible shareholders can now look forward to being paid a fully franked $3.837 per share interim dividend in around six weeks on 22 September. This was the miner’s second largest interim dividend in its history.

Telstra Corporation Ltd (ASX: TLS)

The Telstra share price is down 1.5% to $3.95. This telco giant’s shares were having a good day this morning following the release of a strong full year result. However, they have faded as the day went on. This is despite its earnings coming in ahead of expectations in FY 2022. It’s possible that a rotation back into higher risk shares has reduced the appeal of Telstra today.

The post Why AMP, OFX, Rio Tinto, and Telstra shares are dropping appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Equity markets threaten to ‘melt up’ as Nasdaq enters bull market territory
• Everything you need to know about the latest Telstra dividend
• AMP share price slides as $1.1b pledged to investors
• Do any ASX lithium shares pay dividends?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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 positions in and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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