Category: Stock Market

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a disappointing decline. At the time of writing, the benchmark index is down 0.6% to 7,282.8 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Chorus Ltd (ASX: CNU)

The Chorus share price is down 3% to $6.50. This follows the release of the New Zealand Commerce Commission’s final decision on its new fibre regulatory regime. The Commission has determined a regulated asset base of NZ$5.425 billion, compared to NZ$5.427 billion in its August draft decision.

CSL Limited (ASX: CSL)

The CSL share price has tumbled 8% to $272.90. This follows the completion of the biotherapeutics giant’s institutional placement. CSL raised US$4.5 billion (A$6.3 billion) at an 8.2% discount of A$273.00 per new share following strong support from existing shareholders and new investors. The proceeds will support the acquisition of Vifor Pharma for US$12.3 billion (A$17.2 billion).

Qantas Airways Limited (ASX: QAN)

The Qantas share price is down almost 2% to $4.78. This morning the airline operator released a market update which revealed that it expects to post a loss of $1.1 billion during the first half. Qantas’ CEO, Alan Joyce, revealed that that Qantas has faced “one of the worst halves of the entire pandemic.” Qantas also warned that its costs would increase in the second half as its employees return to work.

Sims Ltd (ASX: SGM)

The Sims share price has dropped 2.5% to $15.06. Investors have been selling the metals recycling company’s shares despite it announcing an acquisition this morning. Sims has agreed to acquire the assets of United States-based metal recycler, Atlantic Recycling Group for US$37 million plus working capital adjustments. This implies an EV/EBITDA multiple of 4.2x on a pre-synergies basis.

The post Why Chorus, CSL, Qantas, and Sims shares are dropping appeared first on The Motley Fool Australia.

More reading

• Qantas (ASX:QAN) share price descends on $1.1bn half year loss guidance
• ASX 200 (ASX:XJO) midday update: CSL sinks, Qantas’ $1.1bn+ first half loss
• CSL (ASX:CSL) share price down 8% after raising US$4.5bn
• Qantas (ASX:QAN) share price on watch after ‘one of the worst halves of the entire pandemic’
• 5 things to watch on the ASX 200 on Thursday

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. owns and has recommended CSL Ltd. 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.

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The Aeris Resources Ltd (ASX: AIS) share price is charging higher, up 3.2% in late morning trade.

This as the All Ordinaries Index (ASX: XAO) remains down 0.1%, after regaining some heftier earlier losses.

Below, we take a look at what’s driving ASX investor interest in the resource explorer and producer.

What did Aeris report?

The Aeris Resources share price is leaping higher after the company announced a maiden Mineral Resource estimate for its Constellation deposit. That deposit is located in its 100% owned Tritton tenement package in New South Wales.

The Mineral Resource estimate for Constellation totals 3.3 million tonnes at 1.4% copper, for 47,000 tonnes of copper metal.

According to the release that includes:

• Indicated Mineral Resource for high-grade Supergene mineralisation of 0.5 million tonnes at 3.4% copper, for 18,000 tonnes of copper metal; and
• Indicated and Inferred Mineral Resource for Sulphide (Primary) mineralisation of 1.4 million tonnes at 1.6% copper, for 23,000 tonnes of contained copper

The Aeris Resources share price could also be getting a lift from the company reporting that it has defined an Exploration Target for primary mineralisation below the reported Mineral Resource.

Commenting on the results, Aeris’ executive chairman, Andre Labuschagne said:

This maiden Mineral Resource and Exploration Target for the Constellation deposit confirms our long-held view that Constellation is a significant copper deposit and will play an important role in extending the life of our Tritton Copper Operation.

To go from initial discovery to maiden Mineral Resource in just over 12 months is a fantastic outcome by our exploration team. What is also exciting is that Constellation remains open down-plunge.

Labuschagne said the company is continuing with its resource definition drilling and hopes to provide an updated Mineral Resource by the end of the March 2022 quarter.

“Preliminary indications from the metallurgical test work appear positive and we are targeting to deliver detailed results by the end of January 2022,” he added.

Aeris Resources share price snapshot

The Aeris Resources share price is up 57% over the past 12 months, well outpacing the 0% gains posted by the All Ords during that same period.

Over the last month, Aeris Resources shares have lost 7%.

The post Here’s why the Aeris Resources (ASX:AIS) share price is shooting higher today appeared first on The Motley Fool Australia.

More reading

• Tinybeans (ASX:TNY) share price rockets 23% on record quarter
• Mesoblast (ASX:MSB) share price jumps 12% on FDA update
• Meet DRIV (ASX:DRIV), the electric vehicle ETF that just listed on the ASX
• Qantas (ASX:QAN) share price descends on $1.1bn half year loss guidance
• Encounter Resources (ASX:ENR) share price blasts 15% higher on copper update

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.

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The Tinybeans Group Limited (ASX: TNY) share price is soaring today following the release of a positive trading update. At the time of writing, the mobile and web-based social media platform’s shares are up 22.94% to 67 cents.

What’s driving Tinybeans shares higher?

Investors are scrambling to get a parcel of Tinybeans shares after the company updated the market with a forecasted Q2 record performance.

According to the release, Tinybeans advised that it saw strong trading conditions in October and November, with December remaining favourable.

Sales for the end of the second quarter are projected to be about US$3.5 million. This represents a 53% increase on the prior corresponding period.

In addition, advertising revenue is on track to reach over US$3 million, up 57% compared against Q2 FY21. The company noted that this is being driven by the new single integrated brand proposition. In particular, the growing tier brand partners and larger average campaign sizes with YouTube Kids as the exclusive relaunch sponsor.

Monthly recurring revenues from subscriptions are projected to double to over US$140,000, compared to US$72,000 in September 2021.

Total paid subscribers stand at 42,000 with more people engaging with the company’s platform. Trial to paid conversion came to more than 80%, 8 times higher than the industry standard.

What did the CEO say?

Tinybeans CEO, Eddie Geller was excited to deliver the strong results, saying:

After a successful first quarter of FY22, we are absolutely thrilled to have such a strong follow up by delivering another record revenue quarter. The current quarter has had significant change including a new website launch, and the introduction of the Beanstalk subscription product. The value proposition for parents remains high and significant effort continues to refine and optimize the newly released products to ensure they are delivering successfully for all our customers.

The Company is forging ahead in executing its strategy to build an award-winning platform where parents go to raise amazing kids, driving multiple complementary revenue streams. This is a testament to the team and the value proposition to parents and brands. This significant revenue growth and early indications of conversion to our paid subscriber model has set us up for an exciting 2022, especially given the exciting product roadmap ahead.

About the Tinybeans share price

Over the past 12 months, the Tinybeans share price has plummeted in value, representing a 55% loss for shareholders. Throughout the year, the company’s shares have continued on a downwards trajectory.

It’s worth noting that the Tinybeans share price is currently a whisker away from its multi-year low of 50.5 cents.

Based on today’s price, Tinybeans commands a market capitalisation of roughly $38.7 million, with approximately 57.86 million shares outstanding.

The post Tinybeans (ASX:TNY) share price rockets 23% on record quarter appeared first on The Motley Fool Australia.

More reading

• Here’s why the Aeris Resources (ASX:AIS) share price is shooting higher today
• Mesoblast (ASX:MSB) share price jumps 12% on FDA update
• Meet DRIV (ASX:DRIV), the electric vehicle ETF that just listed on the ASX
• Qantas (ASX:QAN) share price descends on $1.1bn half year loss guidance
• Encounter Resources (ASX:ENR) share price blasts 15% higher on copper update

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. owns and has recommended Tinybeans Group Ltd. 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.

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The Mesoblast Limited (ASX: MSB) share price is soaring today on the back of a clinical trial update.

In morning trade, the company’s shares are trading at $1.495, up 12%.

Mesoblast is working on regenerative medicines for serious inflammatory conditions including chronic back pain.

What is impacting the share price today?

Investors are responding to feedback the company received from the FDA’s Office of Tissues and Advanced Therapies (OTAT).

The company is trialling the use of its flagship rexlemestrocel-L product in the treatment of chronic back pain.

Mesoblast will be conducting another phase 3 trial based on OTAT’s review of initial trial data.

The regulatory body agrees with Mesoblast’s plan to use pain reduction at 12 months as the key endpoint for this pending trial.

Opioid use reduction and functional improvement will be secondary endpoints for the trial.

If the trial blasts ahead to EU regulatory approval, the company will be eligible for multi-million dollar payments.

Mesoblast said it could receive a US$112.5 million payout ahead of the product launch from partner company Grünenthal if the approval goes ahead.

The company predicts milestone payments could reach a mammoth US$1 billion depending on trial results and patient uptake.

Mesoblast sees the potential to market its product as a solution to excessive use of opioids in the US.

What else is happening at Mesoblast

The Mesoblast share price crashed on Tuesday after pharmaceutical giant Novartis terminated an agreement with the company to use remestemcel-L to treat acute respiratory distress syndrome (ARDS) from COVID-19.

However, the company maintains that it remains highly focused on bringing this product to the market to help patients impacted by this condition.

Mesoblast still sees potential to pursue emergency use authorisation of remestemcel-L based on clinical results.

Mesoblast share price snapshot

In the past 12 months, the Mesoblast share price has plunged 60% and dived nearly 34% in the year to date.

Shares in the company have slipped 15% in the past month and 22% in the past week.

Mesoblast has a market capitalisation of roughly $967 million based on the current share price.

The post Mesoblast (ASX:MSB) share price jumps 12% on FDA update appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: CSL sinks, Qantas’ $1.1bn+ first half loss
• Why Blackmores, Mesoblast, Vulcan, and Zip shares are sinking
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• ASX 200 (ASX:XJO) midday update: Afterpay takeover vote, Woolworths crashes
• Mesoblast (ASX:MSB) share price crashes 21% after Novartis terminates agreement

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.

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The ASX boards have welcomed some new exchange-traded funds (ETFs) today. Yes, the BetaShares Electric Vehicles and Future Mobility ETF (ASX: DRIV) joins the share market. It lists alongside another new BetaShares fund, the BetaShares Future of Payments ETF (ASX: IPAY).

So at the time of writing, DRIV units have debuted at $11.78 per unit and are currently trading at $11.79, up a solid 0.08% after their first few hours of ASX life.

So we took a quick look at DRIV a few days ago when it became clear this ETF was headed for the ASX boards. But if you missed that coverage, here’s a quick refresh. So BetaShares tell us that this ETF is designed to track the Solactive Future Mobility Index. This will, in the provider’s words, give “exposure to a portfolio of global companies at the forefront of innovation in automotive technology”. It holds 50 companies right now.

DRIV comes off the ASX line

Its top 10 holdings, and weightings, are as follows:

1. Tesla Inc (NASDAQ: TSLA) with a portfolio weighting of 9.5%
2. Nio Inc (NYSE: NIO) with a weighting of 6.4%
3. Aptiv plc (NYSE: APTV) with a weighting of 6.4%
4. Uber Technologies Inc (NYSE: UBER) with a weighting of 6.1%
5. Volkswagen AG with a weighting of 5.6%
6. Volvo AB with a weighting of 4.7%
7. Paccar Inc (NASDAQ: PCAR) with a weighting of 4.4%
8. BYD Co Ltd with a weighting of 4.2%
9. Li Auto Inc with a weighting of 3.9%
10. Xpeng Inc (NYSE: XPEV) with a weighting of 3.6%

So as you can see, many famous names there. At the top of the pile, we have the well-known electric vehicle manufacturers Tesla and Nio. Nio is a giant Chinese company often called the ‘Tesla of China’.

Aptiv is a US auto parts company, while Uber is of course the eponymous ride-sharing provider.

Volkswagen and Volvo need no introduction as conventional vehicle brands, while Paccar is a manufacturer of diesel trucks with brand names like Kenworth and Peterbilt.

BYD, Li Auto and Xpeng are all Chinese companies with expanding electric vehicle manufacturing operations.

Geographically, DRIV is weighted 44% towards US companies and 20.3% towards Chinese companies. Germany, Ireland, Europe, Japan and South Korea make up the vast majority of the rest.

Although this DRIV ETF only makes its ASX debut today, the index that it tracks has reportedly returned an average of 23.5% since its inception in May 2017.

The BetaShares Electric Vehicles and Future Mobility ETF charge a management fee of 0.67% per annum (or $67 per year for every $10,000 invested).

The post Meet DRIV (ASX:DRIV), the electric vehicle ETF that just listed on the ASX appeared first on The Motley Fool Australia.

More reading

• Qantas (ASX:QAN) share price descends on $1.1bn half year loss guidance
• Encounter Resources (ASX:ENR) share price blasts 15% higher on copper update
• Here’s why the IGO (ASX:IGO) share price is not going anywhere today
• CBA (ASX:CBA) share price up amid another loan rate hike
• ASX 200 (ASX:XJO) midday update: CSL sinks, Qantas’ $1.1bn+ first half loss

Motley Fool contributor Sebastian Bowen owns Tesla. 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.

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The Qantas Airways Limited (ASX: QAN) share price has come under a spot of pressure on Thursday.

In morning trade, the airline operator’s shares were down almost 2.5% to $4.76.

The Qantas share price has since recovered a touch but remains down 1% at $4.82 currently.

Why is the Qantas share price descending?

Investors have been selling down the Qantas share price today after it revealed that the first half of FY 2022 has been incredibly turbulent.

In fact, Qantas’ CEO, Alan Joyce, labelled the period “one of the worst halves of the entire pandemic.”

This was due largely to most states having their borders closed and the majority of Australians being in lockdown. Things were so bad that Qantas’ capacity fell to around 30% of pre-COVID levels for several months.

This ultimately led to Qantas revealing that it expects to post an underlying earnings before interest, tax, depreciation and amortisation (EBITDA) loss in the range of $250 million to $300 million for the first half.

And if you add in non-cash depreciation and amortisation costs, this half year loss spirals to over $1.1 billion.

The positives

Potentially preventing the Qantas share price falling further was news that the company has been able to accelerate the repair of its balance sheet. So much so, it expects to finish the first half with a materially better net debt position than it had prior to the start of Delta variant lockdowns in June. Qantas expects its net debt to be $5.65 billion at the end of December.

Furthermore, the airline’s liquidity remains strong, with cash of $2.6 billion and undrawn debt facilities of $1.6 billion.

Another positive is the outlook for domestic flying. Qantas expects domestic flying to be ~75% of pre-COVID levels by the end of December, before rising to more than 100% in February 2022.

Shareholders will no doubt be hoping this proves accurate and supports a similar recovery in the Qantas share price in the coming months.

The post Qantas (ASX:QAN) share price descends on $1.1bn half year loss guidance appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: CSL sinks, Qantas’ $1.1bn+ first half loss
• Qantas (ASX:QAN) share price on watch after ‘one of the worst halves of the entire pandemic’
• 5 things to watch on the ASX 200 on Thursday
• Qantas (ASX:QAN) share price struggles despite ‘green fuel’ news
• Zip (ASX:Z1P) shares just topped these end-of-year rankings

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The Encounter Resources Ltd (ASX: ENR) share price is rocketing on Thursday. This comes after the company announced it has received positive assay results over the Sandover project in the Northern Territory.

At the time of writing, the exploration and resource development company’s shares are up 15.38%, trading at 15 cents apiece.

What did Encounter announce?

The company has confirmed high-grade copper mineralisation at Sandover.

In today’s release, Encounter advised that recent surface sampling and mapping have returned up to 20.9% copper mineralisation. This is spread across 4 separate areas around 6km apart at the Sandover project.

Encounter noted each site comprised a red-bed sandstone sequence with multiple, narrow grey shale units containing copper oxide mineralisation.

The next steps will see the company engage with experts to conduct further on-ground mapping and sampling activities. Planned to start in March/April 2022, the exploration program will focus on identifying where these units intersect along the basin forming structures. The company believes these areas have the potential to host major mineral deposits.

Management commentary

Encounter managing director Will Robinson said:

The confirmation of outcropping high-grade copper over a large area is a promising start to exploration at Sandover.

Sandover covers a Zambian copper belt aged, sub-basin on the southern margin of the Georgina Basin, approximately 170km north of Alice Springs. Access is excellent with the Stuart Highway and Ghan railway extending through the western margin of the project. Further areas of interest have been identified at Sandover and will be sampled at the start of the 2022 field season.

We are engaging with experts in Zambian style copper deposits to assist in the design of exploration programs to fast track this emerging copper opportunity in the Northern Territory.

About the Encounter share price

While the Encounter share price has accelerated today, the same cannot be said for the past year. In the last 12 months, the company’s shares are down roughly 3%, and almost 8% lower for 2021.

Encounter is a small-cap ASX share, valued at around $47.52 million. The company has approximately 316.82 million shares outstanding.

The post Encounter Resources (ASX:ENR) share price blasts 15% higher on copper update appeared first on The Motley Fool Australia.

More reading

• Here’s why the IGO (ASX:IGO) share price is not going anywhere today
• CBA (ASX:CBA) share price up amid another loan rate hike
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• Why is the Scentre (ASX:SCG) share price climbing today?

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 Bruce Jackson.

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The Scentre Group (ASX: SCG) share price is in the green this morning despite no news having been released by the company.

Though, it might be word from the company’s real estate investment trust (REIT) peers that has boosted the market’s sentiment for the retail property group.

Right now, the Scentre share price is $3.12, 0.65% higher than its previous close.

However, earlier today the REIT’s stock reached $3.25, representing a 4.8% gain.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently down 0.33%.

Let’s take a look at what might be helping drive the value of Scentre’s shares higher on Thursday.

Scenter share price gains on Thursday

The Scentre share price is on the way up alongside those of Centuria Industrial REIT (ASX: CIP) and Vicinity Centres (ASX: VCX) today.

Both Centuria and Vicinity’s stock is being boosted by news their asset valuations have increased.

Centuria has led the charge, boasting a valuation increase of 9.6%, or $281 million.

Meanwhile, Vicinity announced a preliminary asset valuation increase of $309 million – a 2.2% boost to its book values.

Right now, the Vicinity share price is 1.59% higher, while that of Centuria is up 1.01%.

Though, those gains aren’t the ones leading the S&P/ASX 200 A-REIT Index‘s (ASX: XPJ) 1.15% surge.

The Stockland Corporation Ltd (ASX: SGP) share price is leaving those of its peers in the dust today. It has soared 3.75% at the time of writing.

The company’s stock is being driven higher on news of its 2021 final dividend, which will see 12 cents deposited into shareholders’ pockets for every security they hold in the REIT.

As The Motley Fool Australia reported this morning, that sees Stockland’s total dividends for 2021 nearing pre-COVID-19 levels.

Thus, the Scentre share price might be being boosted by positive sentiment surrounding the ASX’s REIT sector today.

Today’s increase brings its year to date gains to 12%. It has also increased 3% since this time last month.

The post Why is the Scentre (ASX:SCG) share price climbing today? appeared first on The Motley Fool Australia.

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• Own the Vanguard Australian Property ETF (ASX:VAP)? Here’s what you’re invested in
• Only a few ASX 200 companies have received this honour and Scentre (ASX:SCG) just joined them
• 2 high yield ASX dividend shares named as buys

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 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.

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The IGO Ltd (ASX: IGO) share price is frozen today at $10.63 per share.

The S&P/ASX 200 Index (ASX: XJO) resource explorer and producer requested a trading halt today “pending an announcement in relation to a potential acquisition“.

What other ASX resource share is frozen today?

Not coincidentally, the Western Areas Ltd (ASX: WSA) share price is halted alongside the IGO share price today as well.

In its ASX announcement this morning, Western Areas said it was requesting the pause in trading “pending an announcement by the company regarding a potential change of control transaction involving the company”.

The Motley Fool first reported on early news of IGO’s interest in acquiring rival Western Areas in exchange for shares back on 19 August.

At the time IGO acknowledged its interest, saying, “IGO confirms that it is in preliminary discussions with Western Areas in relation to a change of control proposal and the basis upon which engagement and due diligence could proceed.”

The IGO share price tumbled 6% that day while Western Areas shares leapt 13% higher.

Now, as the Australian Financial Review reports, IGO has “agreed an all-cash takeover offer” for Western Areas. “It is understood the bid values Western Areas at more than $3.30 a share.”

Western Areas was trading for $3.24 when markets closed yesterday.

According to the AFR, “IGO’s expected to fund the bid with some new debt and existing cash reserves. The bid would value Western Areas at more than $1.1 billion. Western Areas is expected to tell shareholders to accept the offer.”

Stay tuned!

IGO share price snapshot

The IGO share price has been charging higher over the past 12 months, up 66%. By comparison the ASX 200 has gained 9% since this time last year.

Over the past month IGO shares are up 8%.

Earlier this month, broker Citi upgraded the company’s shares to a buy rating from neutral with a target for the IGO share price of $12.40.

The post Here’s why the IGO (ASX:IGO) share price is not going anywhere today appeared first on The Motley Fool Australia.

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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.

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The Commonwealth Bank of Australia (ASX: CBA) share price is currently up, slightly. Australia’s biggest bank increased its interest rate yet again. That’s despite the S&P/ASX 200 Index (ASX: XJO) being down more than 0.10%.

Interest rates are going higher at the big four bank for both owner-occupiers and investors for the fourth time in the last several weeks.

CBA hikes interest rates

For owner-occupiers, CBA’s fixed rate increased by 0.05% from 2.49% to 2.54%. The 3-year fixed rate rose 0.15% from 2.99% to 3.14%. The 4-year fixed rate grew 0.25% from 3.09% to 3.34% according to RateCity.

To put into context how much the rates have changed, since 14 October, Rate City notes CBA’s 3-year rate has increased by 0.95%, or 95 basis points.

Whilst today’s increase is not large, RateCity.com.au research director, Sally Tindall commented that the hikes are adding up:

The spike in the cost of funding has sent fixed rates soaring, with both CBA and Westpac hiking fixed rates four times in the last two months. As a result, CBA’s 4-year rate has risen by over a full percentage point in this time.

CBA’s fixed rates with terms of three years and more are now higher than pre-pandemic levels.

These fixed rates hikes aren’t isolated to the big four banks. The rate rises are coming in across the board from lenders big and small and we expect them to continue.

Anyone in CBA’s queue for a fixed rate who didn’t pay a rate lock fee will be particularly grumpy at today’s news.

How much will borrowers be paying now?

According to RateCity, the average borrower taking out a $500,000, 3-year fixed rate loan with CBA today will be paying $250 more a month than someone who took out the same loan two months ago.

In other words, they’ll have to pay a total of $3,000 a year extra, which is a sizeable amount of most Aussie budgets.

Global interest rates are heading higher too

The US Federal Reserve has signalled that it’s going to be removing emergency support from the economy even sooner than previously expected.

In the most recent Federal Open Market Committee (FOMC) statement, it was noted that the progress on vaccinations and indicators of economic activity and employment have continued to strengthen. It’s expecting further economic activity gains and strong employment, as well as a reduction of inflation.

The Committee decided to reduce the monthly pace of its net asset purchases by US$20 billion for Treasury securities and US$10 billion for agency mortgage-backed securities. COVID-era bond purchases are planned to end in March.

As reported by various media around the world, including Reuters, there could be as many as three rate hike of 0.25% rises by the end of 2022.

The Fed Chair Jerome Powell said:

The economy no longer needs increasing amounts of policy support. In my view, we are making rapid progress toward maximum employment.

CBA share price snapshot

Despite the 10% drop of CBA shares over the last month, it is still up 16% in 2021.

The post CBA (ASX:CBA) share price up amid another loan rate hike appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: CSL sinks, Qantas’ $1.1bn+ first half loss
• Qualitas (ASX:QAL) shares are hitting the ASX boards today following its IPO
• 5 things to watch on the ASX 200 on Thursday
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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 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.

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