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There are some S&P/ASX 200 Index (ASX: XJO) shares this fund manager owns which it thinks can still do well in the current investment environment.

The fund manager in question is Perpetual Limited (ASX: PPT) and the fund is focused on Australian shares, particularly ASX industrial and resource shares. This fund aims to outperform the S&P/ASX 300 Accumulation Index over three-year periods.

At 30 June 2022, the net returns of the fund had outperformed the index by an average of 2.3% per annum over the previous three years.

The fund manager’s view is that “markets are poised for further rotation to a more value-orientated investment environment as COVID-19 disruptions, waning stimulus and war combine keep consumer price inflation at high levels”.

Perpetual’s strategy

With that outlook, Perpetual has a view on what’s going to happen next and what this will mean for certain ASX shares and how to invest. Perpetual said:

In our view, rising bond yields will eventually lead overpriced growth stocks into a more sustained and overdue correction, challenging investors with large growth exposures. We think, in the years ahead, markets will need to become accustomed to more inflation than previously experienced. This distinct shift in the macro backdrop is already playing out across asset classes. In these conditions, our focus on value style investing, buying quality companies with strong balance sheets trading at reasonable valuations, should continue to do well and offer attractive opportunities for investors.

So which ASX shares does it own?

At the end of June 2022, Perpetual had a few key positions in businesses with big weightings in the portfolio.

Some of those big ASX share positions were: Santos Ltd (ASX: STO) at 5.9% of the portfolio, Insurance Australia Group Ltd (ASX: IAG) at 5.8% of the portfolio, and Ramsay Health Care Limited (ASX: RHC) at 4.3% of the portfolio.

Santos is benefiting from the higher energy prices amid the Russian invasion of Ukraine. Perpetual said the spike in prices has contributed to near-term inflation expectations.

Ramsay has been a recent performer after receiving a conditional, non-binding and indicative proposal from a KKR-led consortium to buy the business. Ramsay shareholders will get $88 cash per share, less any dividends paid. The Ramsay board has given the consortium due diligence materials on a non-exclusive basis.

On IAG, Perpetual noted that the insurer has received regulatory approval for the sale of AmGeneral, a Malaysian business in which it holds a 49% stake. The sale proceeds will be around $340 million, with an expected net loss after tax of AU$90 million. However, “it will improve its regulatory capital position by AU$150 million at completion”.

The ASX share recently gave a profit update for FY22 and guidance for FY23.

IAG said its FY23 guidance reflects “strong underlying business momentum”.

IAG expects gross written premium growth to be “mid-to-high single digit growth”. This will be “primarily rate driven to cover claims inflation, higher reinsurance costs and an increased natural peril allowance”.

The reported insurance margin is likely to be higher than FY22. In FY23 the company expects this to be between 14% and 16%.

The post Looking for value: The ASX shares this fundie is holding amid rising inflation appeared first on The Motley Fool Australia.

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More reading

• Is the IAG share price a buy following the insurer’s latest update?
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• Why did ASX 200 energy shares fire up on Tuesday?
• Own Santos shares? Here’s why the company’s international exports could come under pressure

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 positions in and has recommended Insurance Australia Group Limited. The Motley Fool Australia has recommended Ramsay Health Care 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 Insurance Australia Group Ltd (ASX: IAG) share price is rangebound today and now trades flat at $4.52 apiece.

After posting its preliminary FY22 results and FY23 guidance last week, IAG shares took off and now trade at their highest mark since June.

The insurer booked a $347 net profit after tax (NPAT) and forecasted FY23 gross written premium in the range of 14–16%.

Is the IAG share price a buy?

Analysts at UBS certainly don’t think so. The broker rates IAG a sell and values the company at $4.10 per share.

Following IAG’s preliminary results, the UBS team was unimpressed with the growth trends and noted profit margins are below consensus estimates.

It said that “[r]eserve levels have again proved insufficient as a further top-up was required,” which poses a key downside looking ahead.

Meanwhile, analysts at Macquarie led by Andrew Buncombe reiterated the bank’s outperform rating with a $5.40 price target.

In fact, Macquarie joined 7 other brokers in revising their price targets and/or recommendations on IAG following its preliminary earnings update, per Refinitiv Eikon data.

This contrasts against 2 brokers rating the IAG share price as a hold and sell respectively.

The consensus price target from this list is $4.98 per share, suggesting a small amount of mispricing versus market price.

It is yet to be seen if further upgrades/downgrades are to come through from brokers covering IAG.

In the past 12 months, the IAG share price has lost 9%, despite clipping a 6% gain this YTD.

The post Is the IAG share price a buy following the insurer’s latest update? appeared first on The Motley Fool Australia.

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More reading

• Looking for value: The ASX shares this fundie is holding amid rising inflation
• Here are the top 10 ASX 200 shares today
• Why Damstra, Flight Centre, IAG, and Pantoro shares are pushing higher
• Why is the IAG share price lifting 6% higher today?
• Why Accent, Humm, IAG, and Webjet shares are dropping

Motley Fool contributor Zach Bristow 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 Insurance Australia 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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It’s a mixed day in the markets today, but you won’t hear investors in this ASX mining share complaining.

In late morning trade the Cobre Ltd (ASX: CBE) share price is up 96%, having earlier posted gains of more than 106%.

So, why are investors piling into this tiny ASX mineral explorer?

Why is the ASX mining share rocketing?

The Cobre share price is rocketing after the miner reported its first intersection of significant copper mineralisation at the Ngami Copper Project located in Botswana.

Cobre said the visual copper mineralisation was intersected in its first diamond drill hole at the project, situated within the Kalahari Copper Belt.

According to the ASX mining share, the promising early drill results highlight the strong potential of the area. The miner has 57 priority targets across KML’s extensive license holding on the northern margin of the Kalahari Copper Belt.

Commenting on the early drill results, Cobre managing director Martin Holland, said:

Now we have a promising copper intersection, on one of the most prospective Copper belts in the world. This result, one-kilometre away from the previous historic hole, shows the current mineralisation thickens over a one-kilometre zone to date…

We have prioritised this portion of the belt due to its favourable geological setting. These results, which confirm the presence of significant copper mineralisation, validate the district scale opportunity of Cobre’s, soon to be 100%-owned, extensive license package within the Kalahari Copper Belt.

The ASX mining share has a second diamond hole currently being drilled further along the strike.

“With diamond drilling ongoing in Botswana, we anticipate ongoing exploration updates to follow and look forward to updating our shareholders in due course,” Holland added.

Cobre share price snapshot

With today’s big leap factored in, the ASX mining share is up 4% in 2022. That compares to a year-to-date loss of 12% posted by the All Ordinaries Index (ASX: XAO).

The post Guess which ASX mining share just exploded 100% on a new discovery appeared first on The Motley Fool Australia.

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More reading

• Why is the Solana price sinking today?
• BetMakers share price lifts as full year revenue surges 370%
• Core Lithium share price flat after ‘progressing well’ last quarter
• Powering down: Novonix share price slumps following quarterly results
• IGO share price lifts on 13% fourth quarter revenue boost

Motley Fool contributor Bernd Struben 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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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.

What happened

Like other top cryptocurrencies, Solana (CRYPTO: SOL) has seen some significant selling pressure Tuesday. As of 12:50 p.m. ET, the proof-of-stake project’s tokens had sunk by 8.4% over the previous 24 hours. That positioned Solana as the second-worst performer among the top 10 tokens by market cap, just behind Ethereum (CRYPTO: ETH), which had declined by 9.5%.

Macro factors are certainly among the drivers of Solana’s decline. Most major tokens are down substantially Tuesday as investors consider the risks associated with this week’s Fed rate hike decision, among other factors.

However, Solana has been grabbing the attention of prominent crypto proponents, who have cited a rather compelling bear case for it. Among the most ardently bearish individuals on Solana of late is Justin Bons, founder and chief investment officer of the crypto venture capital fund Cyber Capital. Bons is well-respected in this space, and his opinion carries weight with many who follow him on social media.

The bear thesis Bons has outlined is multifaceted.

First, in recent months, Solana’s blockchain has seen significant downtime relative to other top projects in this space. In fact, Bons highlights the fact that Solana is the only blockchain to have undergone seven outages in recent months, making it a worrisome outlier.

Second, Bons has called into question Solana’s peak throughput metrics. Solana Labs claims its blockchain maxes out around 400,000 transactions per second. In reality, it typically operates at a much slower throughput level, even at peak times.

Additionally, Bons and others believe that Solana’s recent launch of an Android smartphone could be a decoy the Solana Labs team will use as a way to “cash in” before the selling pressure really beings.

Finally, overarching issues of the blockchain’s security have Bons concerned. He suggests that relative to other blockchains, a 51% attack may be more likely with Solana, given centralization issues with how the network’s validators operate. Among the reported issues causing validator centralization are higher comparative equipment costs.

So what

There’s a lot to digest when it comes to Bons’ bear thesis on Solana. Many may be aware of the various outages the blockchain has experienced. This isn’t a new issue, and we’ve been covering it for months. 

However, these concerns are certainly worrisome for investors. When well-known individuals in this space such as Bons highlight why these concerns should be taken seriously, many ears in the crypto community perk up. Mine certainly did as I read through his previous threads on Solana.

Now, the Solana Labs team has responded to many of these concerns, suggesting that Bons’ theses have largely been debunked. Many networks experience outages or downtime. Accordingly, the recent attention Solana has received from distributed denial-of-service (DDoS) attackers isn’t out of the ordinary.

Additionally, developers behind the Solana blockchain have come up with some detailed fixes they hope will provide long-term solutions for many of these issues. While these fixes may take time to implement, the suggestion is that investors need to be patient through these growing pains.

Now what

Solana’s speed and cost advantages, relative to behemoth Ethereum and other competitors, are what make this project enticing for long-term investors thinking about the high-level problems crypto could eventually help solve. Many have touted Solana as a potential “next-generation” or “improved” version of Ethereum, and one that could see similar price appreciation over time, assuming its ecosystem growth follows a similar trajectory.

However, the question is whether Solana’s blockchain gives up too much in the way of security and stability in the pursuit of these advantages. Ethereum’s blockchain has been remarkably stable, and that’s one of the reasons why it’s the top dog. It’s hard to make the argument that Solana could surpass Ethereum given its stability concerns.

Thus, Bons appears to highlight some pertinent issues which could provide near-term headwinds for this project. While I’m bullish on Solana in the long term, in the medium term, it’s clear there’s plenty of work to be done. Accordingly, as always, when considering this token as a potential investment, investors ought to consider the risks as well as the catalysts.

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

The post Why is the Solana price sinking today? appeared first on The Motley Fool Australia.

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More reading

• Why top cryptocurrencies Bitcoin, Ethereum, and Dogecoin are slumping today
• Why Bitcoin, Ethereum, and Shiba Inu are falling today
• Can Ethereum reach $10,000?
• Will Ethereum and Bitcoin see the ‘flippening’ in 2022?
• Why crypto and Coinbase dropped on Thursday

Chris MacDonald has positions in Ethereum and Solana. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Ethereum and Solana. The Motley Fool Australia owns and has recommended Ethereum and Solana. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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The BetMakers Technology Group Ltd (ASX: BET) share price is taking off on the back of the company’s latest quarterly report.

After opening 2% higher at 49.5 cents, the stock leapt to trade at an intraday high of 53 cents, a 9.3% gain.

At the time of writing, the BetMakers share price has retreated to 49.5 cents, 2.06% higher than its previous close.

BetMakers share price lifts as cash receipts nearly triple

Here are the highlights of the wagering technology provider’s performance in the June quarter:

• $26.2 million of cash reciepts – a 194% improvement on those of the prior corresponding period (PCP)
• Operating cash flow positive with inflows of $416,000
• That included around $2.5 million of accelerated or nonrecurring costs
• The company had $87.6 million of cash in the bank at the end of June

The company also posted $91.6 million of unaudited revenue for financial year 2022 – a 370% improvement on that of financial year 2021.

What else happened in the June quarter?

The quarter just been was an incredibly busy one for the company. Sadly, it also saw the BetMakers share price fall 46%.

The major news during that time was of a new 10-year agreement with a new wagering venture that could see the company raking in more than $300 million of revenue.

BetMakers also signed an agreement that will see it become the new tote provider in Norway and a deal that allows it to offer PENN National Gaming context outside of the US and Canada.

What’s next?

The company didn’t provide any new earnings guidance in today’s release. However, it did provide an optimistic outlook on the upcoming performance of its three major brands.

BetMaker’s global betting service is expected to provide strong revenue growth in financial year 2023 while its global racing network’s revenue is expected to more than double.

Finally, the company’s global tote division is tipped to consolidate its gains this financial year and set the platform for financial year 2024 and beyond.

BetMakers share price snapshot

This year so far has been rough on the BetMakers share price.

It has slumped 39% since the start of 2022 and 47% since this time last year.

For comparison, the All Ordinaries Index (ASX: XAO) has fallen 12% so far this year and 9% over the last 12 months.

The post BetMakers share price lifts as full year revenue surges 370% appeared first on The Motley Fool Australia.

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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 positions in and has recommended Betmakers Technology Group Ltd. The Motley Fool Australia has recommended Betmakers Technology Group 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 IGO Ltd (ASX: IGO) share price is edging higher in early trade, up 0.6%.

IGO shares closed yesterday trading for $9.96 and are currently trading for $10.02.

This comes following this morning’s release of the S&P/ASX 200 Index (ASX: XJO) miner’s quarterly results for the three months ending 30 June (4Q FY22).

IGO share price lifts on revenue boost

• Sales revenue of $278 million, up 13% from the prior quarter
• Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 11% quarter-on-quarter to $258 million
• Profit after tax of $107 million, down 19% from Q3
• Acquired Western Areas Limited for cash consideration of $1.26 billion

What else happened during the quarter?

IGO’s net debt position as at 30 June was $533 million, compared to a net cash position of $440 million at the end of Q3.

That debt was fuelled by the ASX 200 miner’s $1.26 billion acquisition of nickel miner Western Areas. The company ended the quarter with $367 million of cash on its balance sheet and $900 million in new debt facilities. The acquisition was completed on 20 June.

IGO reported that its full FY22 nickel production came in at 26,675 tonnes, within guidance. Copper production of 11,483 tonnes came in at the lower end of guidance, while cash costs were better than guidance at $1.95 per payable pound.

On the lithium front, the company produced its first battery grade lithium hydroxide (LiOH) at Kwinana. IGO said this milestone opened the door for qualification processes to commence with respective offtake customers.

What did management say?

Commenting on the results, IGO’s CEO, Peter Bradford said;

Nova and Greenbushes delivered production and cash costs within or better than guidance, first battery grade lithium hydroxide was produced at Kwinana, we received a first dividend distribution from the lithium joint venture and we progressed many organic growth opportunities across the business.

In parallel, we have completed the transaction to acquire Western Areas and have made substantial progress with the integration of Western Areas into IGO. The momentum for clean energy continues to grow and IGO is well placed to play an important role during this exciting period in human history.

What’s next?

In the 2023 financial year ahead, IGO expects to spend $75 million on exploration activities.

The miner said it is committed to continuing growth via the acquisition of high-quality assets along with organic growth in both brownfields and greenfields exploration.

IGO share price snapshot

Though it has struggled in 2022, the IGO share price remains up 10% over the past 12 months. That compares to a full year loss of 8% posted by the ASX 200.

The post IGO share price lifts on 13% fourth quarter revenue boost appeared first on The Motley Fool Australia.

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More reading

• ‘You can’t lose’: Which ASX lithium shares operate in Musk’s sweet spot?
• IGO share price declines 7% amid commodity fears
• 3 ASX lithium shares that flew in FY22, and 1 that sank
• ASX 200 mining shares glide lower as expert reduces commodity targets
• ASX battery metals shares trying to power up after a horror June

Motley Fool contributor Bernd Struben 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 Telstra Corp Ltd (ASX: TLS) share price is edging lower today.

This comes after the company expanded its partnership with US tech giant Microsoft Corporation (NASDAQ: MSFT).

At the time of writing, the telco provider’s shares are down 0.51% to $3.92 each in early trading on Wednesday.

Let’s take a look below at the deal.

What was announced?

In a media release, Microsoft advised it has signed a five-year strategic agreement with Telstra to drive Australia’s digital growth.

Under the partnership, Microsoft’s cloud technology will be integrated into Telstra’s new intercity fibre network. The aim is to have 90% of its applications on public cloud infrastructure by 2025, which includes Microsoft Azure as a preferred cloud partner.

Furthermore, Microsoft will explore boosting its capacity on Telstra’s Asia-Pacific subsea cable network. This will help Microsoft achieve end-to-end connectivity across key telecommunications routes in Australia and across the Asia-Pacific region.

Connectivity in today’s world has become vital, particularly since COVID-19.

Businesses are more decentralised with remote working while user demand for online education, entertainment, and online gaming has accelerated.

Combining Telstra’s network with Microsoft’s cloud capabilities will provide the best possible experiences for customers, the companies say. Overall, more bandwidth and reduced latency will ensure a smoother flow of connectivity on the cloud.

In return, using Microsoft technology like Azure, Microsoft 365, and Microsoft Teams, Telstra will promote hybrid working and cloud migration.

These industry-based solutions will be initially focused on the manufacturing, retail, agriculture, utilities, and finance sectors. Telstra’s managed services and technology consulting business Telstra Purple will be dedicated to delivering this service to customers.

Management commentary

Telstra CEO Andrew Penn noted the deal with Microsoft is aligned to the company’s T25 growth strategy. He said:

As the go-to partner for Microsoft in Australia, this expanded agreement will turbocharge how we deliver compelling, all-digital experiences.

The pervasiveness of technology in businesses today and its ability to transform their operations, improve productivity, reduce their environmental impact and meet evolving customer needs means there’s no one-size-fits all solution.

…Our strategic partnership with Microsoft is on a scale not seen before in Australia, and it will be Australian businesses who will benefit at a time when the urgency to digitise and transform their operations has never been greater.

Telstra share price summary

Since the beginning of the year, the Telstra share price has shed 5.5%.

Its shares touched a multi-year high of $4.31 on 18 January before dropping in the following months.

Telstra commands a market capitalisation of around $45.64 billion, making it the 11th largest company on the ASX.

The post Own Telstra shares? Here’s the latest on the telco’s new Microsoft deal appeared first on The Motley Fool Australia.

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More reading

• 2 ‘good value’ ASX 200 shares offering what investors want right now: expert
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Motley Fool contributor Aaron Teboneras has positions in Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Microsoft. 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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The Transurban Group (ASX: TCL) share price has moved slightly ahead in the year to date, but one fund manager is predicting better days ahead.

The company’s shares have leapt 2% this year so far. In comparison, the S&P/ASX 200 Index (ASX: XJO) has lost nearly 9% year to date.

So what is the outlook for the Transurban share price?

Why could Transurban do well?

Transurban is a global toll-road developer, operating roads in Melbourne, Sydney, Brisbane, United States and Canada.

Atlas Funds Management chief investment officer Hugh Dive has named Transurban as one of three companies that could do quite well in a high interest rate environment.

Dive highlighted “high interest rates don’t impact all companies” in a recent interview with livewire.

Commenting on Transurban specifically, he noted the company will make more profit as inflation rises. He said:

With the utilities, you wouldn’t think that they would normally do well in a rising rate environment and their biggest cost is interest.

But given that the debt is termed out on an average of about eight years, it’s not really moving. And every year with inflation, the tolls go up. For the next four years, Transurban has said that every 1% increase in inflation equals another US$50 million in profit.

Transurban operates more than 330 kilometres of road infrastructure with 21 assets in five markets. The company is expecting traffic to increase as the economy recovers post-COVID-19. Returning domestic and international travel is also driving up traffic volumes on roads that lead to airports.

ClearBridge Investments has also recently named Transurban as an “attractive” infrastructure ASX share it holds with a “high-quality” management team. The fund manager said:

Transurban is an attractive company due to its increasing free cash flow profile driven by traffic growth, toll increases linked to CPI and strong cost control resulting in their ability to increase dividends.

Transurban share price snapshot

The Transurban share price has fallen 0.22% in the past year, and 0.84% in the past month.

In comparison, the ASX 200 benchmark index has shed 8% in a year.

Transurban has a market capitalisation of about $43 billion based on the current share price.

The post When inflation = profit: Why this fundie is tipping the Transurban share price to outperform appeared first on The Motley Fool Australia.

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More reading

• Expert prediction: 3 ASX 200 shares that can ‘do well’ in volatile times
• 3 ASX shares for ‘predictability’ through tough times: expert
• How to beat the market with ‘boring’ ASX shares: fundie
• Is the Transurban share price a buy ahead of earnings season?
• Pricing power: 2 ASX shares that can fight stagflation

Motley Fool contributor Monica O’Shea 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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Commonwealth Bank of Australia (ASX: CBA) shares are one of the biggest dividend payers in Australia. But how big is the dividend going to be this reporting season in August 2022? There’s one particularly optimistic estimate.

CBA is the biggest ‘big four’ ASX bank share. The others in that group are National Australia Bank Ltd (ASX: NAB), Australia and New Zealand Banking Group Ltd (ASX: ANZ), and Westpac Banking Corp (ASX: WBC).

According to a dividend-focused article on Livewire Markets, Hugh Dive from Atlas Funds Management has picked out CBA (and a couple of other banks) as leading ASX dividend share ideas heading into reporting season.

Dive is “positive” on the banks and thinks that they will “surprise” markets in a good way.

According to the dividend estimate reported, CBA could pay an annual dividend per share of $4 for FY22. To come to this total, CBA would have to pay a final dividend of $2.25 per share.

Dividend increase expected

If CBA were to pay an FY22 second-half dividend of $2.25 per share, that would represent an increase of 12.5% compared to the FY21 second-half dividend of $2.

A total dividend of $4 per share would mean that the FY22 dividend would be increased by 14.2% compared to $3.50 per share in FY21.

If CBA did pay an annual dividend of $4 per share, it could be a surprise for investors because many other brokers are expecting a smaller, but still sizeable, dividend from the big bank.

The dividend of $4 per share would translate into a grossed-up dividend yield of 5.9%.

However, brokers like Macquarie and Morgan Stanley are expecting CBA to pay a grossed-up dividend yield of 5.6% and 5.5% respectively for FY22.

Why are brokers less positive?

Brokers like Morgan Stanley think that the Reserve Bank of Australia (RBA) will keep increasing interest rates and this could help the net interest margins (NIMs) of banks in the shorter term. But, as reported in a Livewire article, higher interest rates could hurt the housing and loan markets, which increases the risk of recession.

The problem is that while higher interest rates can help margins, banks could also suffer from higher bad debts and slower growth.

Morgan Stanley currently has an ‘underweight’ rating on CBA. That is similar to a ‘sell’ rating. The price target of $79 implies a possible drop of around 20% for the CBA share price.

However, Morgan Stanley does think the dividend can remain strong and grow in FY23 to a grossed-up dividend yield of approximately 6.1%.

The post Can investors bank on a dividend surprise from CBA shares this earnings season? appeared first on The Motley Fool Australia.

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More reading

• Why did the ANZ share price smash the other ASX 200 banks today?
• Own CBA shares? Union labels bank ‘irresponsible’ following major COVID change
• How high will the RBA hike rates in 2022? Here’s what the ASX 200 banks are forecasting
• ‘CBA and Westpac are too big’: One fund manager’s take on the future of ASX 200 bank shares
• Should owners of CBA shares be worried about ANZ’s mega deal?

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 and 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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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.

What happened

Today’s crypto sell-off has stymied much of the positive sentiment we’ve seen materialize in this sector in recent weeks. As of 12:30 p.m. ET, top cryptocurrencies Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), and Dogecoin (CRYPTO: DOGE) sunk 5.1%, 9.7%, and 6.8%, respectively, over the past 24 hours. 

This sharp sentiment shift appears to be related to the dissipation of hype around Ethereum’s upcoming merge, which drove a significant portion of this sector’s gains in recent weeks. 

This move in the crypto market has been mirrored by equity markets, which are also down substantially today as investors await the Federal Reserve decision on interest rate policy moving forward. This week, the Federal Open Market Committee is expected to announce a rate hike of 75 basis points (0.75%), in a move that will bring the overnight federal funds rate above 2% for the first time since the pre-pandemic era.

So what

Ethereum has been among the more volatile large-cap tokens in the market in recent weeks. Accordingly, its outsize decline today ought to be put into context. 

After all, this is a token that’s run up significantly of late, on anticipation of the network’s upcoming merge. Thus, on down days like today, seeing higher selling interest materialize as investors take profits and realize short-term gains makes sense. 

Broader macro concerns appear to warrant a cautious approach by growth investors, as risk assets get revalued. Some analysts have pointed to the potential for a more sustained bear market in stocks as a pretense for investors steering clear of higher-risk asset classes such as cryptocurrencies. Whether such a prolonged bear market is in store or not is still a topic of discussion among investors, leading to outsize volatility as price discovery unfolds. 

Now what

The overall crypto market continues to hover just a hair above the psychologically important $1 trillion market cap level. Accordingly, there is some concern brewing among crypto investors that traders could be enticed to hit the sell button if we fall back into 12-digit territory. In the weeks to come, more volatility could become the norm, as investors push and pull at this seemingly critical level.

Additionally, it will be interesting to see how the crypto market reacts to the upcoming Fed decision this week. Whether this rate hike is met with relief, or pessimism, is something many will be interested to see. 

Until this decision, I expect more choppiness on the horizon. For long-term investors in these top cryptocurrencies, the next few days and weeks appear to be shaping up to be exciting (for lack of a better word). 

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

The post Why top cryptocurrencies Bitcoin, Ethereum, and Dogecoin are slumping today appeared first on The Motley Fool Australia.

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More reading

• 2 things need to happen for a sustained Bitcoin price rally: experts
• Why Bitcoin, Ethereum, and Shiba Inu are falling today
• 3 cryptos to avoid no matter what
• Can Ethereum reach $10,000?
• Will Ethereum and Bitcoin see the ‘flippening’ in 2022?

Chris MacDonald has positions in Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. 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. 

 

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

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