Category: Stock Market

The Qantas Airways Ltd (ASX: QAN) share price is sliding in morning trade, down 1.38% to $5.355 a share.

This comes despite new data that reveals Australians are building an overwhelming desire for international travel.

Travel search queries surge

New data from Qantas shows a huge pent-up demand for travel from Australians who have largely been prevented from traveling overseas since March 2020.

Last week, the airline reported its plans to relaunch international travel commencing on 18 December.

As The Australian reports, Qantas has since seen “searches of its international flights almost triple”.

In fact, the Qantas digital team reported a 175% increase in flight searches. Sydney and Melbourne to London were the most popular destination searches. Singapore and Tokyo were also high on the list of international travel plans “with most people looking to get away as soon as borders reopen”.

According to Qantas international chief executive Andrew David:

[Australians] could not wait to get back on an aircraft and head overseas again. So many people have missed out on seeing loved ones who live overseas or taking a well-deserved break…

While it’s up to government to determine exactly how and when our international borders re-open, Australia is on track to meet the 80 per cent vaccination trigger by December, which means international travel is within reach.

Qantas CEO Alan Joyce has been a leader in urging a coordinated national vaccination campaign.

The airline is requiring its own staff to get vaccinated and is eager to see domestic borders and international borders reopen.

However, Joyce pointed out that some Australians may find themselves in a situation where they can travel internationally, but not interstate.

According to Joyce (quoted by The Australian):

We might get into a situation where from Sydney you can visit your relatives in London, maybe Dublin, but you can’t visit your relatives in Perth or maybe Cairns and that would be sad if we got to that.

Hopefully we’ll get everybody to keep with the national cabinet plan which will mean everybody can get together at Christmas, domestically and internationally.

Qantas share price snapshot

The Qantas share price is up 11% year-to-date, just trailing the 12% gain posted by the S&P/ASX 200 Index (ASX: XJO).

Over the past month, Qantas shares have gained 17%.

The post Qantas (ASX:QAN) share price slips despite data showing Aussies keen to fly appeared first on The Motley Fool Australia.

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• The Qantas (ASX:QAN) share price is up 5% in a week. Here’s why
• Why the Qantas (ASX:QAN) share price is in focus on Tuesday
• The Qantas (ASX:QAN) share price is having a great start to the week
• Leading brokers name 3 ASX shares to buy today
• If you invested $1,000 in Qantas (ASX:QAN) shares a decade ago, here’s what they would be worth now

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 Fortescue Metals Group Limited (ASX: FMG) share price is catching a bid on Wednesday, up 0.72% to $18.12.

Shares in the iron ore major tumbled 10.94% to $18.57 on Monday after going ex-dividend for a significant fully franked final dividend of $2.11 per share.

Iron ore rebounds following record Chinese trade figures

Iron ore prices rebounded on Tuesday after plunging to seven month lows on Monday.

According to Fastmarkets MB, benchmark iron ore prices increased US$5.59/t or 4.2% to US$137.97/t.

The uptick in prices comes after an unexpected jump in Chinese trade figures.

Bloomberg reported that the value of China’s iron ore imports hit new record highs in August despite policymakers recently implementing steel output controls to curb carbon emissions.

“China imported iron ore worth a record $20 billion in August, according to government data released Tuesday, as prices surged from a year earlier. Total volumes were 97.5 million tonnes”.

China’s overall trade performance in August defied expectations in light of the rapidly spreading Delta variant.

Prior to August’s trade figures, all signs pointed to a slowdown in the Chinese economy as supply-China constraints, higher raw material prices and extreme weather dragged on key areas of its economy.

Fortescue share price in the deep red

The Fortescue share price has plunged well into negative territory, down 27.1% year-to-date.

The retracement in iron ore prices from ~US$220/t in June to US$137.97/t has erased 12-months worth of hard earned gains.

Looking ahead, the Australian Financial Review (AFR) reported that the bounce in imports and demand for iron ore will prove to be short-lived.

“Analysts warned the combination of China’s carbon policies, a slowing property sector and Beijing’s desire to find alternative markets for iron ore point to a medium-term decline in demand for the commodity from Australia, although this could take time.”

The post Fortescue (ASX:FMG) share price higher as China’s imports surge to record high in August appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares today
• Why the Rio Tinto (ASX:RIO) share price is in the red on Tuesday
• Fortescue (ASX:FMG) share price craters to 10-month low as iron ore prices plunge
• Why Appen, BlueScope, Fortescue, & Marley Spoon shares are dropping
• ASX 200 midday update: BHP & Fortescue fall, Flight Centre storms higher

Motley Fool contributor Kerry Sun 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 Piedmont Lithium Inc (ASX: PLL) share price is plunging on Wednesday after its mining permit woes escalated into a securities class action lawsuit.

At the time of writing, shares in the emerging lithium producer are down 5.7% to 74.5 cents.

Why is the Piedmont Lithium share price sinking?

Securities litigation firm, Wolf Haldenstein Adler Freeman & Herz LLP, announced that it had filed a federal securities class action lawsuit in the United States on behalf of persons and entities that have purchased Piedmont Lithium shares.

Wolf Haldenstein’s complaint advised any investors to contact the firm immediately, saying:

If you have incurred losses in the shares of Piedmont Lithium Inc., you may, no later than September 21, 2021, request that the Court appoint you lead plaintiff of the proposed class. Please contact Wolf Haldenstein to learn more about your rights as an investor in Piedmont Lithium Inc.

What’s the class action for?

Wolf Haldenstein pointed to the company’s recent mining permit issues, citing:

On July 20, 2021, before market hours, Reuters reported that Piedmont “has not applied for a state mining permit or a necessary zoning variance in Gaston County, just west of Charlotte, NC, despite telling investors since 2018 that it was on the verge of doing so.” According to the article, a majority of the Board of Commissioners said, “they may block or delay the project because Piedmont has not told them what levels of dust, noise and vibrations will occur, nor how water and air quality would be affected.”

According to Piedmont Lithium’s prior announcements, permits for lithium production and its chemical plant were expected to be complete by mid-2021.

The Piedmont Lithium share price dived 21.3% to a 5-month low of 68.5 cents on the day of Reuters’ report.

It wasn’t until Thursday, 2 September that the company announced applications for a mining permit with the North Carolina Department of Environmental Quality.

The post Piedmont Lithium (ASX:PLL) share price dives 6% after class action lawsuit appeared first on The Motley Fool Australia.

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• These are the 10 most shorted ASX shares
• Why ASX lithium shares are having a bumper start to the week
• These are the 10 most shorted ASX shares
• Why the Piedmont Lithium (ASX:PLL) share price is zooming 8% higher today
• What’s going on with ASX lithium shares today?

Motley Fool contributor Kerry Sun 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 post-COVID economic recovery has been a boon for Australia’s major banks, giving investors reason for optimism.

Although the Commonwealth Bank of Australia (ASX: CBA) was the only one of the four big banks to report full-year results in the August reporting season, all have shown strong performances in 2021 based on reporting to date.

National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC), and Australia and New Zealand Banking Group Ltd (ASX: ANZ) are expected to reveal their full-year results from late October. 

How have ASX bank shares performed against the market?

ASX bank shares have performed strongly in 2021. The CBA share price has climbed 21.6% over the year so far to trade above $100.

The NAB share price is up 25% over 2021 with shares now trading on par with pre-COVID levels. The ANZ share price has gained 20%% over the same period while the Westpac share price is up 32%.

This compares favourably to the All Ordinaries Index (ASX: XAO), which is up 12.5% in 2021. Nonetheless, of the big four banks, only the Commonwealth Bank has seen its share price exceed heights reached in 2017, prior to the Banking Royal Commission. 

Who are winners this earnings season? 

All four major ASX banks are expected to report increased earnings and profit for FY21.

CBA saw net profit after tax increase more than 19% to $8.8 billion over the year to 30 June 2021. The bank reported that improved economic conditions resulted in lower loan impairments and strong operational performance.

Loan impairment expenses decreased 78% to $554 million, while business lending grew at 3x system. Combined with a strong capital position, the result allowed CBA to declare a fully franked full-year dividend of $2, bringing FY21 dividends to $3.50. 

CBA took the opportunity to announce a $6 billion off-market share buyback, funded by $6.2 billion in excess capital generated through strategic divestments. The buyback will return surplus capital to shareholders, with a lower share count supporting future returns on equity.

CBA is not the only major undertaking a share buyback — ANZ announced its own $1.5 billion on-market buyback in July. The bank considered this the most prudent, fairest, and flexible method to return surplus capital to shareholders.  

ANZ reported a $2.9 billion profit for the half-year ending 31 March 2021. A key driver was a net credit provision release of $491 million which came thanks to improved credit conditions. Nonetheless, the bank still had almost $4.3 billion in reserve in case conditions deteriorate.

ANZ’s earnings per share (EPS) rose to 105.3 cents, up from 82.8 cents per share in the previous half. Costs were down 2% with work to digitise core processes and platforms continuing. A strong balance sheet, solid earnings, and improving conditions combined to give ANZ confidence to pay an interim dividend of 70 cents per share, fully franked, up from a final dividend of 35 cents per share in 2020. 

Westpac also saw a significant increase in profits over the half-year ending 31 March 2021. In May, Westpac reported profits of $3.4 billion for the half-year, a 189% increase on the first half of 2020. The boost in profits was mainly thanks to an impairment benefit reflecting improved asset quality and a better economic outlook.

Westpac’s earnings were up 256% on the prior corresponding period to $3.5 billion. Earnings per share more than tripled to 97 cents and an interim dividend of 58 cents per share was declared — Westpac did not declare a dividend for 1H20. 

And the losers this earnings season? 

There aren’t any real losers among ASX bank shares this reporting season.

NAB grew cash earnings by 94.8% in the first half of the year, notching up a tidy $3.2 billion profit. Like the other banks, NAB has benefited from a better than expected rebound in the Australian and New Zealand economies post the initial COVID-19 downturn.

This has resulted in significantly better credit impairment outcomes than anticipated at the start of the pandemic. NAB’s 1H21 credit impairment charges were a write-back of $128 million, versus a 1H20 charge of $1.16 billion. The strong half-year result and growing confidence in the economic outlook prompted NAB to declare an interim dividend of 60 cents per share, double that of the previous year. 

ASX bank shareholders have enjoyed the return of dividends in FY21, with interim dividends doubling for ANZ and NAB compared to the prior corresponding period.

Westpac reinstated its interim dividend, while CBA will pay full year dividends of $3.50, up from $2.98 for FY20, but below the $4.31 paid for FY19. 

Looking ahead

Australia’s financial system has proven to be strong and stable over the past 18 months, supported by well-capitalised banks including the big four.

NAB says performance in the June quarter was encouraging, with cash earnings rising supported by significantly better credit impairment outcomes. NAB reported a $1.65 billion unaudited statutory net profit for the third quarter, with cash earnings up 10.3% compared to the prior corresponding period.

Continued COVID-19 outbreaks are creating uncertainty, but the bank says it remains optimistic about the long term outlook for Australia and New Zealand. Once restrictions are eased, NAB is confident the economy will bounce back. 

CBA anticipates ongoing economic impacts and earnings pressure from lower interest rates, and says it is prepared for a range of different economic scenarios.

Nonetheless, its strong capital and balance sheet position means it has capacity to absorb potential stress events. This allows for the return of surplus capital to CBA shareholders via the share buyback.

ANZ has taken a similar position, citing the strength of its balance sheet and ongoing financial performance as factors facilitating its own return of capital to shareholders. 

Westpac says the first half of the year has been promising, with considerably higher earnings and improved balance sheet strength. The bank said the economic outlook was more positive when it reported its half year results, but acknowledged remaining uncertainty.

As a result, Westpac has remained prudent in its impairment provisioning but expects the Australian economy to expand by 4.5% in 2021. This should support a 4.6% increase in total credit with residential lending expanding 6.5%. 

The post How have ASX bank shares performed during the August 2021 earnings season? appeared first on The Motley Fool Australia.

More reading

• How is the ANZ (ASX:ANZ) share price performing against its sector in 2021?
• Why the NAB (ASX:NAB) share price has beaten the ASX200 in the last 3 months
• Brokers name 2 ASX 200 shares to buy
• The CBA share price has struggled in the last month. Here’s why
• The Macquarie (ASX:MQG) share price is outperforming the ASX big 4 in the past month

Motley Fool contributor Katherine O’Brien 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 Sydney Airport Holdings Pty Ltd (ASX: SYD) share price has been flying these last 6 months.

Shares in Australia’s largest airport are currently trading for $7.91. Over the last 6 months, Sydney Airport shares have outpaced the S&P/ASX 200 Index (ASX: XJO) 37% to 12%. This is despite the challenges the company has faced due to the COVID-19 pandemic.

Let’s see what’s been happening the last 6 months.

Sydney Airport shares are in the sky

The story that had the biggest impact on the Sydney Airport share price is undoubtedly the $23 billion takeover bid the company received in July.

On the day of the announcement, Sydney Airport shares rocketed 37% to $7.78 each. Since then, shares have gone even higher – reaching a new 52-week high of $8.04 at one point. The company’s board ultimately rejected the bid, claiming it “undervalued” the company and was “opportunistic”.

The consortium took a second bite of the cherry about 3 weeks ago, but this bid too was dismissed.

Another possible reason for the rising Sydney Airport share price may be increasing optimism among investors about ASX travel shares. Australia’s rapidly progressing vaccine rollout is pushing the nation closer to reopening its international borders and ending domestic travel restrictions. This is supposed to happen when 80% of the eligible population has received both doses of an approved coronavirus vaccine. The most recent figures suggest we should hit this number by the end of the year.

You can see this surging optimism in other popular ASX travel shares – at least over the last 5 days. While the ASX 200 has fallen 0.06% in this time. The Qantas Airways Limited (ASX: QAN) share price is up 6.89%, while the Flight Centre Travel Group Ltd (ASX: FLT) is 12.6% higher in this time.

Sydney Airport share price snapshot

Over the last 12 months, the Sydney Airport share price has risen an even more impressive 41.76%. Year to date, shares in the airport have appreciated 23.4%. Sydney Airport Holdings has a market capitalisation of $21.3 billion.

The post The Sydney Airport (ASX:SYD) share price has gained 37% in the last 6 months appeared first on The Motley Fool Australia.

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• Why some investors may be hoping the Sydney Airport (ASX:SYD) share price falls
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• ASX 200 Weekly Wrap: A mixed bag of earnings dominates ASX

Motley Fool contributor Marc Sidarous 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 Flight Centre Travel Group Limited. 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 AGL Energy Limited (ASX: AGL) share price is slipping this morning following reports it’s facing increased pressure to set better climate targets.

An upcoming shareholder resolution has reportedly received support from a proxy advisor. The advisor is apparently urging AGL shareholders to vote in favour of a motion demanding AGL implement climate targets for the short, medium, and long term prior to its planned demerger.

Right now, the AGL share price is $6.26, 1.26% lower than its previous close.

Let’s take a closer look at the rumoured shareholder resolution.

AGL under increasing climate pressure

The AGL share price is falling as a push for the company to improve its climate-related disclosures reportedly gains traction.

The resolution was brought about by the Australasia Centre for Corporate Responsibility (ACCR) last month.

It could see shareholders pressuring the company to disclose emissions reduction targets. It also asks AGL to detail how its proposed demerged companies’ capital expenditure will align with said targets. Finally, the ACCR is calling for AGL to answer how the companies’ remuneration policies will incentivise progress towards the targets.

According to reporting by The Australian, proxy advisor Institutional Shareholder Services (ISS) has told its investors it’s supporting the resolution. Further, it has supposedly recommended its shareholders vote in favour of the ACCR’s push.

It reportedly stated the resolution would help inform shareholders about AGL’s demerger ahead of a shareholders’ vote on the split. The publication quoted the advisor as saying:

[A]dditional disclosure is needed regarding the expected assumptions on future power prices and maintenance and fuel cost and demand for fossil fuel power generation.

AGL recently announced shareholders will have the chance to have their voice heard on the climate reporting of both AGL Australia and Accel Energy at their first respective annual general meetings. The AGL share price gained 0.7% on the back of the news.

Additionally, an AGL spokesperson stated AGL plans to set separate climate commitments for Accel Energy and AGL Australia. They said:

(Climate commitments will enable) each business to focus on their respective strategic opportunities and challenges presented by the accelerating energy transition.

However, ISS’s reportedly urging investors to push the company to provide clear climate goals sooner. It said doing so will help them understand AGL’s climate risks ahead of the major shakeup.  

AGL share price snapshot

The AGL share price has fallen 47% in 2021. It is also currently 58% lower than it was this time last year.

The post AGL (ASX:AGL) share price falls amid fresh climate credentials pressure appeared first on The Motley Fool Australia.

More reading

• The AGL (ASX:AGL) share price is down 16% in a month. Here’s why
• AGL Energy (ASX:AGL) share price hits 19-year low
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• The AGL (ASX:AGL) share price is now trading on a forecast 11.7% dividend yield
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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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

In the past few years, investing in the stock market has become easier and cheaper due to the rise of online brokerages like Robinhood Markets and commission-free investing, as many brokerages have eliminated the fees that were charged for making trades.

It’s also become more accessible to a broader range of investors through the introduction of fractional shares investing. This concept, which some brokerages call “stock slices” or “stocks by the slice,” allows people to buy fractions of a share as opposed to the whole stock. This enables investors with limited funds to invest in some of the most popular stocks on the market, like Microsoft (NASDAQ: MSFT), even if they are offered at prices that some would normally consider to be out of reach.

NBA 2K22 or Microsoft?

As measured by valuation, Microsoft is the third-largest company in the world with a market cap of over $1.8 trillion. Its stock currently trades at $301 per share, meaning it costs that much to buy just one share of the technology giant. The stock price was up about 35% year-to-date through Sept. 1, and over the last three years it has almost tripled in value. In September 2018, you could have bought shares of Microsoft for about $108 per share.

Microsoft, of course, owns the video gaming brand Xbox. Next week, Xbox comes out with the latest edition of one of its more enduring and popular games, NBA 2K, which simulates the NBA professional basketball league. On Sept. 10, Xbox will release NBA 2K22, an eagerly anticipated simulation of the upcoming NBA season. The game will be sold at GameStop and other retailers for $59.99, with a special 75th anniversary of the NBA edition going for $99.99.

Millions of fans of the NBA 2K series will plunk down either $60 or $100 on Sept. 10 to play the latest edition of this game, which includes updates of all the current players, including rookies, and their teams. Those more interested in the game maker than the game might instead invest that money in Microsoft. Here’s how.

A slice of Microsoft, for a fraction of the cost

Fractional shares, or stock slices depending on which brokerage you use, let you invest basically any dollar amount you want, regardless of the share price. So, if Microsoft is trading at $301 per share, that may be too expensive for some investors to buy a few shares, particularly those starting out. Just three shares of Microsoft at that price will cost over $900.

But for the cost of NBA 2K22, or the special edition, you could invest in Microsoft by buying fractional shares. This is also known as dollar-based investing, meaning you invest any dollar amount you want, and it buys whatever fraction of the share that represents. So a $60 investment in Microsoft through this method would buy you roughly 20% of one share of Microsoft. The beauty of it is, your returns match the returns for the entire share — so if Microsoft’s stock price goes up 35% this year, your fractional share appreciates at the same rate.

You could use that $60 to buy a few shares of a much lower-priced stock, but you may be taking more of a chance on a stock that’s less established and not a market leader and one of the most successful companies in history, like Microsoft. Consider its consistency — over the last 10 years, Microsoft has averaged a nearly 28% increase in annual earnings.

So, before you put down that $60 for the latest edition of NBA 2K, consider putting that money into fractional shares of Microsoft. Plus, if you wait a few months, the price of NBA 2K22 will drop or you can buy it used for less — making this investment alternative a bigger potential win-win. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post How to invest in Microsoft for less than the cost of “NBA 2K22” appeared first on The Motley Fool Australia.

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• ASX investors were buying Alibaba, Pfizer shares last week

Dave Kovaleski has no position in any of the stocks mentioned. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Microsoft. 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.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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It’s been a difficult past twelve months for the Woodside Petroleum Limited (ASX: WPL) share price. Shares in the Aussie energy giant have edged just 2.5% higher in that time while the S&P/ASX 200 Index (ASX: XJO) has gained 25.3%.

So, what’s driving the oil and gas producer’s valuations right now?

Why the Woodside Petroleum share price is up just 2.5% in the past year

Global crude oil prices have bounced around ever since the COVID-19 pandemic kicked off in early 2020. However, both Brent and WTI Crude prices have been broadly trending higher in the last 12 months.

That hasn’t been reflected in the Woodside Petroleum share price recently. Shares in the oil and gas giant hit a 52-week high of $27.60 per share on 20 January 2021.

Unfortunately for shareholders, things have been largely downhill since then. The ASX energy share has fallen 29.4% lower in the intervening months to $19.48 per share at the time of writing.

To be clear, Woodside still boasts a $19 billion market capitalisation and is Australia’s largest independent oil and gas producer.

It’s set to become even larger amid a merger with BHP Group Ltd (ASX: BHP)’s petroleum division. The proposed all-stock merger will see Woodside own 52% of the merged entity as part of a push to create a global top 10 independent energy company.

The Woodside Petroleum share price has been sliding lower since merger talks surfaced in mid-August. Investors appear sceptical of the transaction’s value as it aims to deliver a portfolio of long-life LNG assets and a high margin oil portfolio.

That valuation slump has occurred despite Woodside generating US$311 million in FY21 free cash flow and a $317 million net profit after tax.

Foolish takeaway

The Woodside Petroleum share price is one to watch in the months ahead. Shares in the Aussie energy share have been up and down this year and the BHP merger only adds more intrigue to one of Australia’s largest listed companies.

The post The Woodside Petroleum share price is up just 2.5% in a year. Here’s why appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 energy shares fell today – here’s why
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• It hasn’t been a great week so far for the Woodside Petroleum (ASX:WPL) share price
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Ken Hall 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 Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price surged to a multi-year high last month. The potential permanent reopening of Australia’s economy following the accelerated vaccination program has led to positive investor sentiment.

Similarly, shares in the other big banks, Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd. (ASX: NAB), and Westpac Banking Corp (ASX: WBC), have also advanced.

ANZ shares are up 23% in 2021. In comparison, CBA shares are hovering around 24% higher, with NAB and Westpac up 26% and 34%, respectively.

When measured against the S&P/ASX 200 Index (ASX: XJO), the index has risen about 14% over the same period.

What’s driving ANZ shares forward?

There are a couple of reasons why the ANZ share price has moved forward in recent times.

First and foremost, the bank released its third-quarter business update to the market on 18 August.

ANZ highlighted its CET1 ratio came in at 12.2%, a slight reduction from the 12.4% recorded in the previous period. In addition, the $1.5 billion buyback, which commenced on 4 August, is expected to reduce its CET1 ratio by 35 basis points.

The company also revealed a total provision release of $32 million for the quarter. This comprises an individual provision charge of $21 million and a collective provision release of $53 million.

The provision balance stood at $4.25 billion, with a collective provision coverage ratio of 1.24%.

In terms of the COVID-19 impact, ANZ noted that it has handed out roughly 1,300 customer loan deferrals during the current lockdown. This reflects about $600 million in value or 0.2% on its total home loan portfolio.

The other possible catalyst for the ANZ share price rise is, as mentioned above, Australia’s speedy vaccination program. The federal government has acknowledged that once vaccination targets of 70% are met, relaxed restrictions will follow. This will see businesses get back to work and restart Australia’s economy. In turn, people will be able to service their loans, and the default rates will drop.

A number of brokers weighed in on the company’s share price last month with similar price points.

Analysts at Goldman Sachs raised their outlook on ANZ shares by 0.8% to $30.74. However, JPMorgan recently cut its price target by 4.9% to $29.10 with a “neutral rating”.

ANZ share price snapshot

It’s been a blissful 12 months for ANZ shareholders, with the share price posting a multi-year high of $29.64 on 13 August.

When looking at a longer time frame, the company’s share price is up around 85% since March 2020.

ANZ commands a market capitalisation of roughly $79.9 billion, making it the sixth-largest company on the ASX.

The post How is the ANZ (ASX:ANZ) share price performing against its sector in 2021? appeared first on The Motley Fool Australia.

More reading

• Brokers name 2 ASX 200 shares to buy
• The Macquarie (ASX:MQG) share price is outperforming the ASX big 4 in the past month
• ASX 200 bank shares fall as AUSTRAC says risk of criminal activity is ‘high’
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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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Environmentally conscious investors can rejoice as the market passes judgement on the Woolworths Group Ltd (ASX: WOW) share price after it announced plans to issue sustainable bonds.

Our largest supermarket chain is looking to raise €500 million ($798 million) through a bond issue that’s linked to emission targets, reported the Australian Financial Review.

There’s no better place to sell these bonds than in Europe – a region miles ahead when it comes to global warming issues.

Woolworth share price looking for sustainability

This is the first time that Woolworths is issuing sustainable bonds. While it sold $400 million in green bonds two years ago, the two are structured differently.

The green bonds were to fund green projects. On the other hand, the sustainable bonds will reward Woolworths for hitting pre-set emission targets with cheap debt, while punishing it with penalty payments if it doesn’t.

The capital from the sustainable bonds is to help fund recent acquisitions. Woolworths bought majority stakes in data analytics firm Quantium and PFD Food Services, reported the AFR.

Cutting emissions is good for the Woolworths share price

There are two scopes to the target (areas where the reduction in carbon emissions will come from). The first is from Woolworth’s own business. The second is from its supply chain.

Installing solar panels on their buildings and sourcing green energy is one way for the company to reduce its scope one emissions. Installing more energy efficient lights and equipment at its stores is another.

Meanwhile, ensuring that distribution centres and suppliers have energy saving initiatives will help Woolworths meet its goal.

Emission targets to trigger Woolies rewards

The target is to cut emissions by 63% compared to its 2015 levels by 2030. This should please most ESG conscious investors as this is modelled to meet the Paris Agreement. The agreement is to limit global warming to well below 2 degrees Celsius (preferably to 1.5 degrees Celsius).

The Woolworth share price closed at $40.54 on Tuesday and is up 28% over the past year.

Foolish takeaway

While this is the first time that Woolworths is using such a bond, other companies on the S&P/ASX 200 Index (Index:^AXJO) have issued similar bonds. These include engineering group Worley Ltd (ASX: WOR) and retail conglomerate Wesfarmers Ltd (ASX: WES).

Sensible Aussies will want to see more ASX 200 shares use this funding mechanism too. While many Australian companies have set ambitious targets, some experts warn that these companies won’t be able to meet the targets.

It’s no point making grand statements about reducing emissions unless there’s better accountability. Sustainable bonds are one way for investors to dangle a carrot while holding a stick.

What would also be great if management and board bonuses are also tied to emission goals – not just profit targets.

The post Woolworths (ASX:WOW) share price on watch after its big green promise appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau owns shares of WorleyParsons Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. 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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