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The REA Group Limited (ASX: REA) share price will be one to watch closely on Friday.

This follows the release of the property listings company’s first quarter update this morning.

REA Group share price on watch after strong start to FY 2022

• Revenue up 35% to $264 million (22% excluding acquisitions)
• Operating expenses up 49% to $107 million (13% excluding acquisitions)
• EBITDA jumped 25% to $158 million (24% excluding acquisitions)
• Free cash flow up 20% to $49 million (29% excluding acquisitions)
• National listings up 11% (Sydney down 7%, Melbourne up 79%)

What happened during the quarter?

For the three months ended 30 September, REA delivered a 35% increase in revenue to $264 million and a 25% lift in EBITDA including associates to $158 million. This was driven by growth across all Australian segments, underpinned by an increase in national listings.

The company notes that the Australian residential property market showed resilience during the quarter. After modest declines in July, national listings increased 11% for the quarter, with Sydney down 7% and Melbourne up 79% due to lockdown impacts in the prior period.

Also boosting REA’s financial performance was a rise in Australian Residential revenue from increased depth and Premiere penetration, price increases from 1 July, and continued growth in add-on products.

The release also highlights that its Financial Services segment performed well. Management notes that the Smartline and Mortgage Choice businesses experienced strong growth in operating revenues. This was driven by continued growth in settlements and brokers. It also advised that the Mortgage Choice integration is progressing well.

Another positive is that the Indian market has rebounded following the negative COVID impacts experienced in the second half of FY 2021. REA India achieved strong year on year revenue growth, driven by Housing.com’s core business and growth in adjacency products.

Finally, taking some of the shine off the result was an increase in REA’s costs. This reflects a combination of continued investment to deliver strategic initiatives, which has seen higher headcount and salaries in a tight labour market, and reduced operating costs in the prior period as it navigated through COVID uncertainty.

Nevertheless, the company continues to target positive operating jaws (revenue growth greater than costs growth) in FY 2022, excluding the impact of acquisitions.

Management commentary

REA Group’s Chief Executive Officer, Owen Wilson, commented: “REA has delivered an impressive result given the prolonged lockdowns in Sydney and Melbourne. Our performance reflects the continued value our premium listing products are delivering to our customers, and realestate.com.au’s clear position as the number one place to search, find and finance property.”

“Our teams have made excellent progress across a number of key initiatives including the integration of our Mortgage Choice and Smartline businesses, the roll out of new products such as our Connect offering and our integrated rental applications platform, all of which provide the foundations for continued growth,” he added.

Trading update

Potentially giving the REA Group share price a boost today will be management’s comments on current trading.

It explained: “Residential property market conditions are positive, with high levels of buyer enquiry underpinned by continued low interest rates and healthy bank liquidity. October National residential listings were up 16% YoY, with an increase in Melbourne of 20% and 29% in Sydney.”

Though, the company has warned that growth rates are likely to slow as it cycles very strong prior period listing volumes. It also notes that regulatory measures to slow house price inflation could impact listing volumes.

Nevertheless, the company’s CEO remains positive on REA’s outlook.

“As vaccination milestones are met and restrictions continue to be lifted, we expect property markets across Australia to revert to normal operating settings. Buyers remain out in force and this strong demand is likely to fuel ongoing positive momentum,” concluded Mr Wilson.

The post REA Group (ASX:REA) share price on watch after delivering strong Q1 growth appeared first on The Motley Fool Australia.

More reading

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• 2 compelling ASX shares that could be buys in November 2021
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• 3 buy-rated blue chip ASX shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA 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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Investors may want to know how the Sydney Airport (ASX: SYD) share price performed in October 2021.

The business continues to be impacted by COVID-19 effects. But that’s probably not the main thing that is influencing the Sydney Airport share price.

Sydney Airport share price performance

Over October 2021, the Sydney Airport share price dropped around 0.6%.

Sydney Airport is currently dealing with a consortium of investors that want to buy the Sydney Airport business outright. This consortium, called the Sydney Aviation Alliance, wants to buy the whole business for an indicative price of $8.75 cash per share.

The airport business did grant the consortium the opportunity to conduct due diligence over a four-week period. That concluded in the middle of October 2021. A couple of weeks ago, Sydney Airport said that its boards continue to negotiate the relevant transaction documents with the parties seeking their respective internal approvals over the coming weeks.

If those documents are agreed, the Sydney Airport boards intend to unanimously recommend that investors vote in favour of the proposal if a better offer doesn’t appear and an independent expert concluding that the transaction is in the best interest of securityholders.

While relevant transaction documents remain under negotiation, the Sydney Airport boards note that there is no guarantee that an agreement will be reached.

Over the last five months, the Sydney Airport share price has gone up by around 35%.

Airport passengers

Before the takeover approach, one of the main influencers on the Sydney Airport share price was its regular passenger update.

Total passenger traffic in September 2021 was 42,000 passengers, down 98.8% compared to the same month in 2019. Domestic passengers totalled 23,000 in September 2021, which was down 99% on 2019. There were only 19,000 international passengers that passed through Sydney Airport in September 2021, down 98.6% on 2019.

Sydney Airport noted international and domestic passenger traffic in September continued to be impacted by NSW stay at home orders and ongoing border restrictions.

Looking at the top six nationalities that had travelled through Sydney Airport in 2021 to date, they were these countries in order: Australia, China (including Hong Kong), India, the USA, the UK and New Zealand,

Is the Sydney Airport share price a buy?

The broker Ord Minnett thinks that Sydney Airport shares are a hold, with the price target of $8.75 being the takeover offer price. That means there is a potential upside of around 5%, if the deal goes ahead.

The post Own Sydney Airport (ASX:SYD) shares? Here’s how the share price performed in October appeared first on The Motley Fool Australia.

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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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Investors should prepare for a 10% share market correction over the next month, one financial expert has warned.

Global supply chain pressures, rising energy costs and reopening economies have all conspired to keep inflation around for longer than the central banks had hoped.

This has already forced some countries to raise interest rates.

Perhaps the last of the “holdouts” — the Reserve Bank of Australia — this week announced the early abandonment of bond yield curve control.

“Today’s decision is a sure sign interest rates are going to start to rise,” Monash University economics lecturer Isaac Gross said on Tuesday.

“Not today, or even for the rest of this year, but sooner [than] was previously expected.”

And from next month the US Federal Reserve will start doing the same, reducing its balance sheet.

Inflation is running both “hot” and “stickier”

All this uncertainty over interest rates is trouble, according to DeVere Group chief executive Nigel Green.

“Inflation is running hotter and is becoming a bigger issue than most analysts previously expected,” he said.

“The real story for the markets is how the Fed, the world’s de facto central bank, will talk about inflation.”

Green believes that the US Federal Reserve will now abandon the term “transitory” to describe current inflation, and this will rock share markets like the S&P 500 Index (SP: .INX) and S&P/ASX 200 Index (ASX: XJO).

“Inflation appears to be stickier than they had expected. This means that they are likely to have to raise interest rates sooner and/or more aggressively,” he said.

“Therefore, markets are actively pricing in 2 or 3 hikes next year and this could lead to a 5% to 10% market adjustment over the next month.”

Corrections are opportunities for wise folk

Central banks were forced to resort to near-zero interest rates and keep bond yields down when the COVID-19 pandemic first hit last year.

But with economies now running hot, they feel the stimulus has done its job and a gradual transition to more “standard” monetary conditions must begin soon.

In Australia, Gross believes this week was the end of an era.

“We don’t yet know how quickly variable interest rates will start to rise, but given the Reserve Bank has walked away from a battle to defend yield curve control, we do know it’ll be a long time before it even considers doing it again.”

According to Green, his predicted shock to share markets should not trigger panic in long-term investors.

“A market correction will be seen by savvy investors as the first major step towards the likely return to normal monetary policy and they will be seeking out the inherent opportunities that will be presented.”

The post Get ready for a 10% share market correction: expert appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Here are the top 10 ASX shares today
• These were the 5 best performing ASX retail shares in October
• Why the Amcor (ASX:AMC) share price is outperforming today

Motley Fool contributor Tony Yoo 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 Macquarie Group Ltd (ASX: MQG) share price rose by around 9% during October 2021.

Macquarie is one of the largest financial businesses on the ASX, with four different segments.

The global investment bank recently reported its FY22 first half result, which included a large profit increase year on year.

Macquarie’s major HY22 profit result

Macquarie reported that in the first six months of its 2022 financial year, net profit more than doubled, rising by 107%, to $2.04 billion. This was essentially in line with the profit that was generated in the second half of FY21.

The business continues to grow globally, with international income making up 72% of total income in the first half of FY22.

Assets under management (AUM) had reached A$737 billion at 30 September 2021, which was up 31% from 31 March 2021.

Macquarie said that its financial position comfortably exceeded regulatory minimum requirements, with surplus capital of $8.4 billion. The bank CET1 capital ratio was 11.7%.

The board decided to declare an interim dividend of $2.72 per share, which represented a payout ratio of 50%. At the current Macquarie share price, the last two declared dividends amounts to a partially franked dividend yield of 3%.

Individual segment performance

Macquarie Asset Management (MAM) contributed $1.3 billion of net profit, an increase of 23% year on year. This was driven by the divestment of Macquarie Infrastructure Corporation assets, partially offset by a gain on the sale of Macquarie European Rail in the first half of FY21 and lower performance fees.

The banking and financial services division saw net profit grow 52% year on year to $482 million. This reflected growth in home loan, business lending, platforms and deposits, as well as lower credit impairment charges, partially offset by a higher headcount and investment in technology to support growth.

Commodities and global markets (CGM) saw profit increase 60% year on year to $1.73 billion. There was higher revenue from ‘commodities’, with strong risk management income from gas and power, resources and agriculture.

Finally, Macquarie Capital delivered a net profit of $468 million, which was up “significantly” from a loss of $189 million in the first half of FY21. This came about due to higher fee and commission income thanks to mergers and acquisitions, and debt, income.

Investing for growth and increasing green exposure

From 1 April 2022, the Green Investment Group (GIG) will operate as part of MAM, to bring together Macquarie’s specialist capabilities to provide clients with greater access to green investment opportunities.

Macquarie noted that the need for investment has grown substantially in GIG’s area of focus, and this move will enable long-term investment across the asset lifecycle, from development to operations. GIG will retain its brand and continue its mission to accelerate the green transition, providing greater scale of decarbonisation solutions for clients, portfolio companies, communities and the environment.

The global investment bank recently completed its $1.5 billion institutional placement to invest further in the business and find new opportunities.

Is the Macquarie share price a buy?

Opinions are mixed on the business. Credit Suisse rates it as ‘neutral’ with a price target of $195. But Citi calls it a buy with a price target of $226 after continuing high levels of profitability from the business.

On Citi’s numbers, Macquarie shares are valued at 18x FY22’s estimated earnings.

The post Why did the Macquarie (ASX:MQG) share price have such a great month in October? appeared first on The Motley Fool Australia.

More reading

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• ASX 200 (ASX:XJO) midday update: Westpac sinks, Macquarie raises $1.5bn
• Can the Macquarie (ASX:MQG) share price break new highs over $200?

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 owns shares of and has recommended Macquarie 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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On Thursday the S&P/ASX 200 Index (ASX: XJO) was on form again and charged higher. The benchmark index rose 0.5% to 7,428 points.

Will the market be able to build on this on Friday? Here are five things to watch:

ASX 200 expected to rise again

The Australian share market looks set to end the week on a positive note. According to the latest SPI futures, the ASX 200 is expected to open the day 23 points or 0.3% higher. This follows a decent night of trade on Wall Street, which late on sees the Dow Jones down 0.35%, but the S&P 500 up 0.3% and the Nasdaq up 0.85%.

REA Group quarterly update

The REA Group Limited (ASX: REA) share price will be one to watch today when it releases its first quarter update. Lockdowns in Melbourne and Sydney are expected to have weighed on the property listings company’s performance, offsetting some of the benefits of the booming housing market. The team at Goldman Sachs is forecasting full year EBITDA growth of 8.6% in FY 2022.

Oil prices fall again

Energy producers including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could end the week in the red after oil prices dropped again. According to Bloomberg, the WTI crude oil price is down 2.5% to US$78.84 a barrel and the Brent crude oil price is down 1.9% to US$80.45 a barrel. Traders were selling oil after OPEC agreed to stick to its production growth plans.

Westpac shares go ex-dividend

The Westpac Banking Corp (ASX: WBC) share price is likely to trade notably lower on Friday. This is because this morning the banking giant’s shares will trade ex-dividend for its fully franked 60 cents per share final dividend. This dividend will then be paid to eligible shareholders next month on 21 December.

Gold price rebounds

Gold miners Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a good finish to the week after the gold price stormed higher. According to CNBC, the spot gold price is up 1.7% to US$1,793.7 an ounce. Traders were buying gold after the US Federal Reserve signalled that it would be patient with rate hikes.

The post 5 things to watch on the ASX 200 on Friday appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Here are the top 10 ASX shares today
• Why is the Woodside (ASX:WPL) share price slipping and sliding today?
• These were the 5 best performing ASX retail shares in October
• Why the Amcor (ASX:AMC) share price is outperforming today

Motley Fool contributor James Mickleboro owns shares of Westpac Banking Corporation. 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 REA 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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Investors that are interested in boosting their income portfolio with some dividend shares might want to look at the two listed below.

Here’s what you need to know about these highly rated ASX 200 dividend shares:

Commonwealth Bank of Australia (ASX: CBA)

The first ASX 200 dividend share to look at is Australia’s largest bank, Commonwealth Bank.

Analysts at Bell Potter are very positive on the bank. They likes CBA due to its strong position as the leader in home lending and retail deposits. The broker also notes that the bank has a very strong balance sheet with significant surplus capital of over $11 billion. This could bode well for potential share buybacks or other capital management initiatives in the future.

Bell Potter currently has a buy rating and $118.00 price target on its shares. It is also forecasting fully franked dividends per share of $4.06 in FY 2022 and $4.27 in FY 2023.

Based on the current CBA share price of $108.50, this will mean yields of 3.7% and 3.9%, respectively.

South32 Ltd (ASX: S32)

Another ASX 200 dividend share to consider is this mining giant. It has a diverse portfolio of world class operations that provide investors with exposure to a range of commodities. This includes alumina, aluminium, energy coal, metallurgical coal, manganese ore, nickel, silver, lead, and zinc.

South32 has also just announced a US$1.55 billion agreement with Sumitomo Corporation to acquire a 45% stake in the Sierra Gorda copper mine in Chile. This deal is expected to be immediately accretive to the company’s earnings.

The acquisition went down well with the team at Goldman Sachs, which was already very bullish on South32. In response to the news, the broker retained its conviction buy rating and lifted its price target to $4.40. This is notably higher than the current South23 share price of $3.53.

But it gets even better! Goldman believes the mining giant is well-placed to generate bumper free cash flow for the foreseeable future. In light of this, it is forecasting fully franked dividend yields greater than 11% from FY 2022 through to at least FY 2026.

The post Brokers name 2 excellent ASX 200 dividend shares to buy appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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Today was a great day on the ASX for the Avita Medical Inc (ASX: AVH) share price.

The medical technology company’s stock was boosted by news that the US authority Centers for Medicare and Medicaid Services has approved Avita’s application for a new device category code.

The new code means the cost of Avita’s RECELL System will be able to be offset when it’s used in hospitals and surgical centres.

Avita’s RECELL System is a skin restorative system that allows healthcare professionals to restore skin cells to burned areas.

As of Thursday’s close, the Avita share price is $15.13, 15.8% higher than it was at Wednesday’s close.

Let’s take a closer look at today’s news from Avita.

The latest news of the RECELL System

The Avita share price surged higher today as the company’s CEO noted the new code could see its RECELL System adopted widely.

According to the company’s release, the code under which the RECELL System will soon lie is designed to help facilities adopt new technology by offsetting the cost. The system will adopt the new code on 1 January 2022.

Avita’s CEO Mike Perry commented on the news that drove the company’s share price, saying:

The new code will enable health care providers to treat burn patients with RECELL in various care settings especially during the pandemic, and over the long run, help foster adoption of RECELL in small burns as well as in future indications.

Perry noted the new code “lays the reimbursement foundation for the soft tissue repair indication”. He also said the space represents a $450 million serviceable market.

Previous studies have found that the RECELL System resulted in 97.5% less donor skin being needed to treat second degree burns. Other findings from the studies have also highlighted that the RECELL System means there is 32% less donor skin required to treat patients with third degree burns.

Avita share price snapshot

Today’s gain has boosted the Avita share price back into the ASX green.

It is now 1.3% higher than it was at the start of 2021. However, it’s still 14.9% lower than it was this time last year.

The post The Avita Medical (ASX:AVH) share price just leapt 16% because of this appeared first on The Motley Fool Australia.

More reading

• Why this medical tech ASX share could rocket today

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. owns shares of and has recommended Avita Medical Limited. The Motley Fool Australia has recommended Avita Medical 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 Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), AKA Soul Patts, share price is in focus today as the investment conglomerate’s annual general meeting (AGM) gets closer.

Upcoming AGM

Today, Soul Patts sent out an invitation for shareholders to attend the AGM, which is scheduled for 10 December 2021. This AGM is going to be held virtually because of various COVID-19 effects.

Within the AGM, Soul Patts said that it was considering a shareholder offer for Round Oak Minerals.

The investment conglomerate said it’s thinking about an initial public offering (IPO) of Round Oak Metals Ltd, which is a subsidiary of Soul Patts. It is proposed that the prospectus for Round Oak that will be issued will be lodged with the Australian Securities and Investments Commission (ASIC) on or about 10 November 2021. Shareholders that have an Australian registered address will be entitled to subscribe for shares in Round Oak through an exclusive offer.

What is Round Oak Metals?

It’s described as a growing producer of copper, zinc, gold and silver.

It has a “major” copper development project in north east Victoria called Stockman – it holds three exploration leases and one mining lease, covering approximately 42sq km. The development consists of two underground mines: the historic Wilga Mine which previously operated in the 1990s, and a new mine to be developed at Currawong. Soul Patts has said that a 10-year life of mine plan is expected to produce 30kt of copper equivalent per annum

The Jaguar operation is an operating zinc and copper mine in WA. Mt Colin is a copper and gold mine in north west Queensland. The Barbara mine is a copper mine in western Queensland, which is currently on care and maintenance.

Soul Patts pointed out that Round Oak’s profit improved by $103 million in FY21, which was a “significant improvement”.

Tailwinds for Round Oak

Soul Patts has outlined a number of structural tailwinds in supply and demand which are expected to support strong copper prices.

The first point is the robust construction demand led by China. The Asian superpower accounts for around half of global demand for copper, with further tailwinds for growth due to expected increasing urbanisation, investments in transportation and power networks, and strong manufacturing.

Another tailwind is the transition to renewable energy source. It was pointed out that offshore wind, onshore wind and solar all use significantly more copper per MW of energy production than conventional sources.

The next expected tailwind for copper prices is the increasing electric vehicle uptake. Plug-in hybrid electric vehicles and battery electric vehicles are estimated to require 2.6x and 3.6x (respectively) the copper used in internal combustion engine cars with total sales expected to triple by 2025.

Other tailwinds for future copper prices include a declining mill grade, increasing capital intensity to bring new production online and declining discovery rates of new major copper sources.

Is the Soul Patts share price a buy?

The broker Morgans currently has a price target of $36.78 on the business, though it rates Soul Patts as a hold at the moment.

The post What’s with the Washington H Soul Pattinson (ASX:SOL) share price today? appeared first on The Motley Fool Australia.

More reading

• 3 reasons why the Soul Patts (ASX:SOL) share price could be a buy
• 2 ASX dividend shares that could be buys in November 2021
• Why has the Soul Patts (ASX:SOL) share price tumbled 16% in a month?
• Soul Pattinson (ASX:SOL) share price wobbles as company touts track record
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Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company 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 Washington H. Soul Pattinson and Company 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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To the disappointment of shareholders, the Tyro Payments Ltd (ASX: TYR) share price endured another negative session today. Interestingly, the deepening decline occurred despite there being no new announcements from the payments solutions company.

Unfortunately, the Tyro Payments share price finished 4.35% lower to $3.30 by the end of the day. As a result, the company’s shares are now closer to their 52-week low than they are to their 52-week high.

With no news from the company itself, we’ll need to dig deeper into what’s going on.

Analyst downgrades hit Tyro share price

It appears investors weren’t done with selling down their Tyro shares today after its steep fall yesterday. For reference, the company held its annual general meeting (AGM) for FY22 yesterday.

At this event, management refrained from giving guidance and warned of increased expenses as it looks to expand operations. A 15% sell-off in the Tyro share price shortly followed.

Today, two brokers have shared a negative perspective on Tyro following its AGM.

Firstly, analysts at Jefferies pointed out a reduction in gross profit growth from 24% to 14% from July to October. Jefferies suggested this was likely due to lower terminal rental fees, among other things. Citing this, the analysts decreased their price target from $4.00 to $3.60. Yet, this target is still around 9% above the current Tyro share price.

Similarly, senior analyst Richard Coles from Morgans shared some concerns over the company’s gross profits today. According to the note, Coles believes the FY22 gross profit forecast of $159 million is a stretch. For this reason, the Morgans team downgraded its FY22 and FY23 earnings per share (EPS) forecasts for Tyro by more than 10%.

Additionally, the broker reduced its Tyro share price target but retained its add rating — drawing on the company’s potential long-term growth.

The post The Tyro (ASX:TYR) share price had another stinker on Thursday. Here’s why appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Here’s why the Tyro (ASX:TYR) share price tumbled 15% today
• Why did the Tyro (ASX:TYR) share price lift on Monday?
• Why Beach, Flight Centre, Tyro, and Whitehaven Coal are dropping
• Tyro (ASX:TYR) share price tumbles after being hit with class action

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Tyro Payments. The Motley Fool Australia has recommended Tyro Payments. 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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Commonwealth Bank of Australia (ASX: CBA) yesterday broke new ground when it announced it will begin offering crypto services to its customers.

CBA’s crypto service will allow customers to trade and hold up to 10 selected cryptos, including big names like Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), Bitcoin Cash (CRYPTO: BCH) and Litecoin (CRYPTO: LTC).

I reported on CBA’s crypto plans yesterday. You can find that article here.

Today we turn to 3 industry experts for their take on what this means for Aussie investors and CommBank’s competitors.

CBA crypto service likely to increase Aussie adoption

Asked about the wider implications of CBA’s new crypto service, Darren Abrams, managing director of Aus Merchant Investments, told The Motley Fool:

CBA’s announcement is further validation of the legitimacy of this nascent asset class. Globally, there has been a paradigm shift amongst reputable incumbents in the retail and investment banking industry. Many have formally acknowledged the validity of this asset class and have since started providing a plethora of digital asset services. This zeitgeist will inevitably increase adoption amongst Australian individuals and institutional investors.

Ian Lowe, CEO of global crypto platform Dacxi, had a somewhat different take, saying, “It’s tempting to call CBA’s crypto move one that ‘legitimises’ the industry, but there are few people left who don’t believe that cryptocurrency should play some role in your investment portfolio.”

Lowe continued:

What it does do is lower the learning curve to investing significantly – particularly for those in older cohorts who are looking to manage their own wealth. This is undoubtedly a good thing. We’re undoubtedly going to see more of these collaborations between the Australian banks and major cryptocurrency exchanges as they adapt to consumer demand.

Jonathon Miller, managing director Australia of cryptocurrency exchange Kraken said:

It’s a big turnaround from a major bank, particularly as we saw many big banks criticised during the Senate Select Committee on Australia as a Technology and Financial Centre for their antagonistic nature towards the cryptocurrency industry and the conflation between de-banking and blockchain. We welcome this [crypto] pivot from CBA and hope it brings more support for the burgeoning Australian cryptocurrency and blockchain sector.

What’s next for investors’ crypto access Down Under?

Abrams told The Motley Fool the new CBA crypto service is likely to see other Aussie banks enter the virtual currency space.

According to Abrams:

I believe other banks will follow suit. Providing digital asset services will be an incredibly lucrative new revenue stream for banks. As digital assets become a growing interest for Australians, these publicly trading banks have a fiduciary obligation to shareholders and will eventually need to meet growing demand for crypto trading.

“I can’t foresee a cogent rationale for them not to provide these services. They will risk getting left behind,” he added.

Lowe stressed the importance for retail investors to educate themselves about Bitcoin, Ether and other cryptos. And not to forget the golden rule of diversification:

What we need to see next is education on how to package these assets up correctly. Nobody in their right mind would suggest you expose yourself to the technology sector by only investing in one technology stock. It’s the same with cryptocurrencies…

But getting the right information on cryptos remains tricky today. Lowe explained:

Education is inherently more difficult in cryptocurrency, not only from a sheer complexity standpoint, but also who do you trust for your information? There is far less certainty here than in the world of traditional assets. Cryptocurrency is legitimate, the new frontier is in making it accessible to everyone.

Miller agreed that investors should take the time to be as well informed on the crypto markets as they can, saying “It’s important consumers do as much research as possible and seek out the best service to allow them to take control of their crypto assets.”

However, Miller offered the reminder that Aussie investors looking to buy and hold onto Bitcoin or altcoins aren’t limited to the new CBA crypto service.

“Blockchain technology allows users to safely withdraw and hold their crypto directly,” he said. “It is open source technology and users should be aware that they are not restricted to platforms that lock up their assets such as CBA’s [crypto] offering.”

The post What these three experts are saying about the CBA crypto service appeared first on The Motley Fool Australia.

More reading

• The Ethereum (CRYPTO: ETH) price just hit all-time highs after a strong October
• The first crypto ETF (ASX:CRYP) has just hit the boards. Here’s what you should know
• Why did the Bitcoin (CRYPTO:BTC) price have such a great month in October?
• ASX 200 (ASX:XJO) midday update: CBA enters crypto market, AMP jumps
• CBA (ASX:CBA) just became the first Aussie bank to offer Bitcoin and crypto services

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of 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 Bruce Jackson.

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