Tag: Motley Fool

The MetalsTech Ltd (ASX: MTC) share price is plummeting during early afternoon trade on Friday. This comes after the gold explorer provided the ASX with a clarification update on its previously disclosed lithium spinout announcement.

At the time of writing, MetalsTech shares are down 7.89% to 52.5 cents. This means that its shares have lost around 20% in value in the past week, reversing October’s gains.

Why is MetalsTech shares nosediving?

On Wednesday, MetalsTech advised that its wholly-owned subsidiary Winsome Resources signed a binding agreement with leading fibreglass manufacturer, China Jushi.

However, today’s updated release informed that the entity which executed the binding subscription agreement was a subsidiary of Zhenshi.

The Chinese company will subscribe for up to 9.9% of all shares issued in the proposed Winsome float. This equates to around $2.7 million in value, bringing the total float amount to $5.7 million. The remaining $3 million is being committed by North America’s Lithium Royalty Corp.

Zhenshi is the second largest shareholder of the $15 billion market capitalised, China Jushi. Furthermore, Zhenshi has a diversified investment in fibreglass products, stainless steel, wind energy, composites minerals, logistics and real estate.

The issue price for each share is listed at 20 cents apiece which equates to roughly 13.5 million shares.

Metalstech shareholders are expected to receive about $9 million worth of shares in Winsome by a way of distribution. This translates to 45 million Winsome shares (1 free share held for every 3.68 Metalstech shares held).

More on MetalsTech’s subsidiary, Winsome

A lithium-focused exploration and development company, Winsome operates three project areas in the James Bay Region of Quebec Province, Canada. It’s worth noting that all three projects – Cancet, Adina and Sirmac-Clappier are 100% owned by the company.

Cancet is the Company’s most advanced lithium asset, comprising of an area of over 20,000 hectares. The project sits on a favourable geological setting with a well-mineralised spodumene bearing pegmatite.

Winsome is currently undertaking an initial public offering (IPO) to list on the ASX under the ticker code of WR1. It is expected that the company will begin trading on the ASX around mid-November this year.

The post Metalstech (ASX:MTC) share price sinks further 8% on lithium update clarification appeared first on The Motley Fool Australia.

More reading

• Here’s why the Metalstech (ASX:MTC) share price is sliding on Thursday
• Why is the Metalstech (ASX:MTC) share price sliding 8% on Wednesday?
• Metalstech (ASX:MTC) share price soars 17% on record gold hit
• Why the Metalstech (ASX:MTC) share price hit a record high today
• Why the Metalstech (ASX:MTC) share price is rocketing 26% higher today

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3agmNC7

The Aristocrat Leisure Limited (ASX: ALL) share price is on course to end the week with a small decline.

At the time of writing, the gaming technology company’s shares are down almost 1% to $44.88.

Despite this, the Aristocrat Leisure share price is still up a whopping 43% since the start of the year.

Can the Aristocrat share price go even higher?

The good news for shareholders is that a couple of leading brokers believe the Aristocrat share price can keep rising from here.

For example, the team at Goldman Sachs have recently put a buy rating and $48.60 price target on the company’s shares.

Based on the current Aristocrat share price, this suggests there’s still a further 8.3% upside left for its shares.

Goldman is positive on the company due to its strong balance sheet, continued design and development (D&D) investment to drive growth, and its attractive valuation. In respect to the latter, the broker highlights that the company’s shares are trading largely in line with the average for ASX 200 industrials. This is despite its significantly stronger growth potential.

It commented: “We stay Buy on ALL noting that our MT positive thesis on ALL remains firmly intact, given i) balance sheet strength, ii) management’s focus on continued D&D investment to drive sustained LT growth, iii) leaving it well positioned for further share gains or M&A opportunities, and iv) relative valuation support, trading at ~28x 1-yr fwd PER, broadly in line with ASX200 industrials despite >30% EPS growth forecast in FY22E.”

Who else is bullish?

Another broker is even more bullish on the Aristocrat share price. According to a recent note out of Credit Suisse, its analysts have an outperform rating and $50.30 price target on its shares. This implies potential upside of 12% over the next 12 months.

Credit Suisse believes that Aristocrat’s growing Digital business will benefit from lower mobile platform fees. This follows recent regulatory pressure on app stores following Epic Games’ court battle with Apple.

The broker has previously estimated that Aristocrat could pay a commission in the region of $700 million in FY 2021 to mobile platforms such as Apple’s App Store and Google Play. Clearly, any reduction in fees would be a big win for the company.

All in all, the Aristocrat share price may already be smashing the market in 2021, but these brokers appear to believe its run could continue.

The post These brokers think the Aristocrat (ASX:ALL) share price can keep climbing appeared first on The Motley Fool Australia.

More reading

• Brokers name 3 ASX shares to buy today
• 2 top ASX shares that could be strong buys
• Broker tips Aristocrat Leisure (ASX:ALL) share price to keep rising
• Lithium surge, Sydney Airport takeover, ACCC torches Qantas deal. Scott Phillips on Nine’s Late News
• The Aristocrat (ASX:ALL) share price has hit 10 new record highs in the past month

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.

from The Motley Fool Australia https://ift.tt/3uZW9as

The Immuron Ltd (ASX: IMC) share price is taking off today after it was found the company’s drug might be able to treat COVID-19.

Researchers from the Hebrew University’s Hadassah Medical Center tested if the company’s proprietary product, IMM124E, has potential antiviral benefits.

They found IMM124E might boost antiviral immunity across certain viral strains, including severe acute respiratory syndrome coronavirus-2, the virus that causes COVID-19.

Immuron also announced it has filed a Patent Cooperation Treaty application to seek patent protection for IMM124E.

At the time of writing, the Immuron share price is 14.5 cents, 11.54% higher than its previous close. Earlier today it was up 25% to 17 cents before partially retreating.

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

Data suggests IMM124E may help treat COVID-19

The Immuron share price is surging upwards on news the company’s IMM124E drug could have the potential to treat COVID-19.

Recently published research on IMM124E has detailed the results of a mouse model and human clinical study that attempted to find if the drug could promote antiviral interferon γ T cell responses.

The trial saw 5 human volunteers given 600mg of IMM124E daily for four days and 1200mg on the fifth day.

After the fifth day, researchers took blood samples from the volunteers. They then tested the samples for the number of T cell clones secreting antiviral interferon γ in response to viral antigens of SARS-CoV-2 and hepatitis B virus.

The data suggests IMM124E could enhance antiviral responses against COVID-19 and hepatitis B.

Meanwhile, data from the mouse model suggested IMM124E might enhance antiviral immunity for swine flu, New Caledonia influenza, and cytomegalovirus.

The results won’t be validated until more detailed research on IMM124E’s potential to treat certain viruses has been completed. However, it’s an encouraging outcome.

Though, it’s not the first time IMM124E has been linked to the treatment of COVID-19.

The most recent time the company announced similar news was in May, when researchers from Monash University found the drug may inhibit COVID-19 infection.

Immuron share price snapshot

Despite today’s boost, the Immuron share price is still well and truly in the red on the ASX.

The company’s share price has fallen 31% since the start of 2021. It is also 40% lower than it was this time last year.

The post Immuron (ASX:IMC) share price surges 11% on COVID-19 treatment data appeared first on The Motley Fool Australia.

More reading

• Why is the Rumble Resources (ASX:RTR) share price leaping 11% today?
• Why Fletcher Building, Magellan, Sezzle, & Starpharma are racing higher
• How did ASX lithium shares perform in the FY22 first quarter?
• Here’s why these top brokers reckon the Magellan (ASX:MFG) share price is cheap
• Metcash (ASX:MTS) share price struggles as CEO steps down

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.

from The Motley Fool Australia https://ift.tt/3uORFDq

The Rumble Resources Ltd (ASX: RTR) share price is climbing in afternoon trade and now trades 11% higher at 49.5 cents apiece.

Rumble shareholders have been on a bumpy ride these past few months, and the company has also made several advancements over this time.

It’s worthwhile taking a dive into this progress and see what has led us to Rumble’s share price gain of 15% in the last 2 days.

What’s tailwinds are behind the Rumble Resources share price?

Rumble has made several announcements over the past 2 months regarding drilling and exploration updates.

In late August, the company advised that the drill program at its Earaheedy Joint Venture with Zenith Minerals Ltd (ASX: ZNC) had been expanded by 30% to 40,000 metres.

This came following a 125% increase in the zinc-lead mineralisation footprint at this site announced in July.

Afterwards, the company announced in early September that reverse circulation (RC) drilling had commenced at its Lamil Gold-Copper joint venture with AIC Mines Ltd (ASX: A1M).

The JV is located within the Paterson Province of WA, known as one of the “most highly endowed yet under explored mineral provinces in Australia”, and hosts the “world-class” Telfer gold-copper mine and Nifty copper mine.

The Rumble Resources share price popped on the day of this announcement, closing at a high of 54.5 cents on 13 September.

It made an immediate u-turn and headed back down to where it was trading prior to this – around 44 to 45 cents each.

There, it continued in a tight channel trading sideways until this Wednesday, when bullish investors began to get a hold of Rumble’s shares once again.

There was no price-sensitive information behind this action, only that the company’s shares have gained 6.5 cents per share in the last 2 days.

One other asset gaining in price these past few days is the price of copper, which the company has direct exposure too.

Copper has increased 3% in the past 2 days and now trades at US$4.275/lbs, up from US$4.15 on Wednesday. The price of zinc has also gained around 2.5% in this time.

Given that Rumble Resources is an ASX resource share whose share price will fluctuate with volatility in the broader commodity market, as well as the recent price action of copper and zinc, there may be more to it than meets the eye with the company’s shares today.

Rumble Resources share price snapshot

The Rumble Resources share price has gained 330% this year to date, well ahead of the S&P/ASX 200 Index (ASX: XJO).

It has also gained 200% in the past 12 months, after rallying a further 5% in the last month – again well ahead of the broad index’s return of about 25% in that time.

The post Why is the Rumble Resources (ASX:RTR) share price leaping 11% today? appeared first on The Motley Fool Australia.

More reading

• Immuron (ASX:IMC) share price surges 11% on COVID-19 treatment data
• Why Fletcher Building, Magellan, Sezzle, & Starpharma are racing higher
• How did ASX lithium shares perform in the FY22 first quarter?
• Here’s why these top brokers reckon the Magellan (ASX:MFG) share price is cheap
• Metcash (ASX:MTS) share price struggles as CEO steps down

The author Zach Bristow has no positions 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.

from The Motley Fool Australia https://ift.tt/3llkX9y

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to finish the week on a strong note. At the time of writing, the benchmark index is up 0.8% to 7,314.1 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are racing higher:

Fletcher Building Limited (ASX: FBU)

The Fletcher Building share price is up over 2% to $6.90. Investors have been buying the building products company’s shares following the release of a bullish broker note out of UBS. According to the note, the broker has upgraded the company’s shares to a buy rating with an NZ$8.00 (A$7.59) price target. UBS expects Fletcher Building to benefit from the reopening of the ANZ economy.

Magellan Financial Group Ltd (ASX: MFG)

The Magellan share price is up 5% to $33.78. On Thursday, analysts at Macquarie upgraded this fund manager’s shares to an outperform rating with a $38.00 price target. Macquarie made the move on valuation grounds following a significant de-rating. It feels Magellan’s shares are too cheap to ignore, especially given the potential for a dividend yield of ~7% in FY 2022.

Sezzle Inc (ASX: SZL)

The Sezzle share price is up a further 5% to $5.92. Investors have been buying the buy now, pay later (BNPL) provider’s shares this week after US retailer Target launched Sezzle’s BNPL service across its network. Consumers shopping with the retail giant ahead of the holiday season will now be able to pay for their purchases in instalments through Sezzle or rival Affirm.

Starpharma Holdings Limited (ASX: SPL)

The Starpharma share price is up 2% to $1.22. This morning the dendrimer products developer announced a sales and distribution agreement for Viraleze with Admenta Italia Group. It is a leading pharmaceutical retail and wholesale distribution company in Italy. Viraleze is a broad-spectrum antiviral nasal spray which is applied in the nose to provide a physical barrier between viruses and the nasal mucous membrane. The product traps and irreversibly inactivates virus, including SARS-CoV-2.

The post Why Fletcher Building, Magellan, Sezzle, & Starpharma are racing higher appeared first on The Motley Fool Australia.

More reading

• Here’s why these top brokers reckon the Magellan (ASX:MFG) share price is cheap
• The Sezzle (ASX:SZL) share price has leapt 19% in 2 days. Here’s why
• How did ASX fintech shares perform in the FY22 first quarter?
• Here’s why the Starpharma (ASX:SPL) share price is charging 4% higher today
• Why A2 Milk, Magellan, Santos, & Whitehaven Coal shares are falling

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Starpharma Holdings Limited. The Motley Fool Australia has recommended Starpharma Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3Ai1B9r

The price of lithium continued to rage higher during the first quarter of FY22, sending ASX lithium shares skyward. This generally meant if you owned shares in a lithium producer/explorer, you enjoyed a rewarding quarter.

In fact, lithium shares bucked the trend across the broader materials sector in Q1. Looking at the S&P/ASX 200 Materials Index (ASX: XMJ), the sector was pulled down 10.5% over the 3-month duration. This was mostly from heavy losses in iron ore producers including BHP Group Ltd (ASX: BHP), Fortescue Metals Group Limited (ASX: FMG), and Rio Tinto Limited (ASX: RIO).

To grasp an understanding of which ASX lithium shares delivered the goods we need to take a closer look.

Outsized returns from these ASX lithium shares

While the S&P/ASX 200 Index (ASX: XJO) barely budged in the first quarter (increasing 0.26%), lithium companies went for a run. A large chunk of the euphoria stems from the unrelenting surge in the price of the battery-making chemical element.

According to Trading Economics, the price per tonne of lithium carbonate skyrocketed from approximately 88,800 Chinese yuan to 165,000 yuan during the quarter. This is on top of the strengthening in lithium prices that had been playing out since late 2020.

As a result, investors flocked to Aussie companies set to benefit the most from this continuing trend. In response, the majority of lithium shares on the ASX experienced upwards movement. The company undergoing the strongest share price appreciation during the quarter was AVZ Minerals Ltd (ASX: AVZ). Over the 3-month period, AVZ surged around 110% in value.

Adding to the optimism, in September AVZ announced a transaction implementation agreement with Suzhou CATH Energy Technologies, which would see CATH pay US$240 million in a joint venture to kickstart the Manono Lithium and Tin Project.

Following closely behind, these 5 other ASX lithium shares delivered outsized returns to their shareholders in Q1 FY22:

• Ioneer Ltd (ASX: INR) up 90.9%
• Liontown Resources Limited (ASX: LTR) up 77.8%
• Vulcan Energy Resources Ltd (ASX: VUL) up 66.6%
• Pilbara Minerals Ltd (ASX: PLS) up 40.9%
• Orocobre Limited (ASX: ORE) up 34.9%

Interestingly, Elon Musk, CEO of Tesla Inc (NASDAQ: TSLA), shared his thoughts on lithium in the company’s annual general meeting this morning.

Musk and his company don’t foresee any lithium supply shortages, stating: “There’s lithium everywhere, so that’s not an issue. Also, lithium is maybe only 1 or 2 per cent of the [battery] cell.”

Lagging the pack

Although the far majority of ASX lithium shares experienced strong price appreciation, there was an exception. Specifically, Piedmont Lithium Inc (ASX: PLL) took a 30.1% tumble during the quarter.

This disappointing move coincided with difficulty winning over residents near its proposed open-pit lithium mine in Gaston Country, North Carolina. During a presentation in July, residents expressed discontent towards the mine proposal set out by Piedmont.

Additionally, the ASX lithium share took another hit following a class-action lawsuit being filed against it. As a result, Piedmont shareholders have missed out on the same gains that other lithium producers enjoyed.

The post How did ASX lithium shares perform in the FY22 first quarter? appeared first on The Motley Fool Australia.

More reading

• 2 ASX 200 shares surging this week despite inflation worries
• US warns Evergrande crisis could affect ‘entire world’
• ASX 200 (ASX:XJO) midday update: EML crashes, mining shares rise
• What happened on the US stock market last night?
• October is ‘crash’ month: Will history repeat for the ASX 200?

Motley Fool contributor Mitchell Lawler owns shares of Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Tesla. 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.

from The Motley Fool Australia https://ift.tt/3uRhliE

The Magellan Financial Group Ltd (ASX: MFG) sahre price is having a pretty happy day this Friday. Magellan shares are, at the time of writing, trading at $33.55 each, up a healthy 4.48% so far today.

But if we put that in just a little bit of context, it doesn’t look quite as good as it might seem. It was only yesterday that Magellan, one of the ASX’s largest fund managers, hit a new 52-week low of $31.34 a share. That’s the lowest Magellan shares have been since early 2019.

This descent into these new lows seemed to have been sparked by Magellan’s latest funds under management (FUM) report. On Wednesday this week, Magellan announced that its FUM for the quarter ending 30 September (the first quarter of FY2022) came in at $113.3 billion.

That was a decline of roughly $600 million from where it stood at the start of the quarter. It also represented a fall of $4.7 billion from where Magellan’s FUM was at the end of August.

This obviously wasn’t good news for the company, and investors seemed to have reacted accordingly.

But now that Magellan shares are sitting just a few percentage points off of their new 52-week low, some investors might be wondering if this is a sitting bargain.

Well, we have some insights on that question today.

Could the Magellan share price be a buy today?

As my Fool colleague James covered yesterday, the Magellan share price is looking attractive to the broker Macquarie. Macquarie has retained an ‘outperform’ rating on Magellan shares, albeit with a reduced 12-month share price target of $38. That still implies a potential 12-month upside of close to 15%.

Although, as we covered yesterday, Macquarie is still worried that Magellan’s FUM will remain under pressure for at least the rest of FY22, it still thinks the shares are “too cheap to ignore” right now. Macquarie is also eyeing the possibility of a dividend yield of 7% or so in FY22.

Macquarie isn’t the only broker bullish on Magellan either. According to reporting in today’s Australian Financial Review (AFR), another leading broker sees an even more optimistic 70% upside for the company.

At the current Magellan share price of $33.4, this company has a market capitalisation of $6.19 billion, a price-to-earnings (P/E) ratio of 23.13 and a dividend yield of 6.32%.

The post Here’s why these top brokers reckon the Magellan (ASX:MFG) share price is cheap appeared first on The Motley Fool Australia.

More reading

• Why A2 Milk, Magellan, Santos, & Whitehaven Coal shares are falling
• Top brokers name 3 ASX shares to buy today
• Why A2 Milk, CBA, Flight Centre, & Magellan’s shares are sinking
• The Magellan (ASX:MFG) share price is in focus on $1.5 billion FUM outflow
• 2 ASX shares that could be buys in October 2021

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3lm8qmo

The Metcash Limited (ASX: MTS) share price is sliding lower this afternoon. The shares are now changing hands at $3.98 apiece, down 0.74%.

Metcash shares are on the move as the company announced a key management restructure earlier today. Here’s what we know.

What did Metcash announce?

Metcash advised its Group CEO, Jeff Adams, informed the board of his intention to retire from the wholesale distribution company’s top gig.

The release says Doug Jones, “currently CEO and senior vice president of South African-based Massmart Wholesale”, will step into the role next year.

Adams originally joined Metcash in 2017 as CEO, and the company said it has “seen significant transformation and growth” during his tenure.

Adams’ MFuture program was successful in navigating the company through the pandemic so far, “and was a key driver of record company sales in FY21”.

The appointment of Jones follows a “well managed process, including a thorough global search instigated by the board”.

Jones is an experienced executive with extensive wholesale, retail, and eCommerce experience. Massmart group, a listed company on the Johannesburg Stock Exchange, has been Jones’ home for the past 14 years. It is majority-owned by Walmart.

The exchange of the old and the new will occur on 1 February 2022. The pair will work together to ensure a smooth transition.

Investors don’t appear to like the news, but they certainly don’t appear spooked by it either. The Metcash share price is currently trading 0.74% lower from the open at the time of writing.

Management commentary

Speaking of the CEO’s resignation, Metcash chair Rob Murray said:

The demands on Jeff through COVID have been considerable and were a factor in his decision to retire as Group CEO. His endurance and resilience during this period, which included not being able to see his US-based family, have been amazing. The board and our stakeholders greatly appreciate Jeff’s dedication and efforts, and we wish him all the best for his return to the US and his family.

Regarding the appointment of Doug Jones, and the value this can bring to Metcash, Murray added:

Doug’s extensive and distinguished international experience across wholesale, retail and eCommerce markets made him the standout candidate to succeed Jeff. He is passionate about the success of independent retailers and we are looking forward to him joining us and taking the company forward.

Metcash share price snapshot

The Metcash share price has gained 18% this year to date. It has also gained 39% over the past 12 months.

It is down around 1% this past month. However, it’s still well ahead of the S&P/ASX 200 index (ASX: XJO)’s return of about 20% in the last year.

The post Metcash (ASX:MTS) share price struggles as CEO steps down appeared first on The Motley Fool Australia.

More reading

• 2 ASX 200 shares that could be buys for dividends
• Woolworths (ASX:WOW) and Coles (ASX:COL) could face a margin shock
• 2 ASX dividend shares that could be buys with yields above 4%

The author Zach Bristow has no positions 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.

from The Motley Fool Australia https://ift.tt/3FupnDd

ASX 200 shares in the insurance sector have performed strongly this week despite rising yields and inflation concerns weighing on broader equity markets.

The QBE Insurance Group Ltd (ASX: QBE) share price is up 6.35% this week to $12.23. Insurance Australia Group Ltd (ASX: IAG) is not far behind, with the IAG share price rallying 4.75% to $5.19.

Why are these ASX 200 shares outperforming?

Insurance is often viewed as a defensive industry that remains stable during fluctuations in the broader economy.

Insurers hold a lot of fixed-income assets, such as short-term money, government bonds, corporate bonds and infrastructure debt, to back the insurance policies they write.

In an era where global interest rates are at or close to zero, these underlying bond investments are yielding weak returns.

But the circumstances could soon change for these ASX 200 shares given the concerns about rising inflation.

The US Federal Reserve initially flagged higher inflation as ‘transitory’ as the global economy cycles through elevated prices from 2020. However, surging energy prices and supply bottlenecks have continued to place upward pressure on inflation.

A number of Federal Reserve officials have already expressed their expectations of an increase in interest rates in 2022.

Benchmark US 10-year treasury yields are pushing higher this week, reflecting the inflation and tighter monetary policy concerns. The 10-year rate is currently fetching 1.59%, the highest since early June.

Closer to home, the Reserve Bank of New Zealand raised its official cash rate by 25 basis points to 0.5% this week. This is its first rate hike since June 2014. Policymakers say this decision is appropriate to keep inflation at bay and ease the hot property market.

ASX 200 shares in the insurance sector have held up well this week despite the whipsaw-like action from the S&P/ASX 200 Index (ASX: XJO).

Looking at the bigger picture, both QBE and Insurance Australia are both trading well below pre-COVID levels.

The post 2 ASX 200 shares surging this week despite inflation worries appeared first on The Motley Fool Australia.

More reading

• US warns Evergrande crisis could affect ‘entire world’
• ASX 200 (ASX:XJO) midday update: EML crashes, mining shares rise
• What happened on the US stock market last night?
• October is ‘crash’ month: Will history repeat for the ASX 200?
• CBA (ASX:CBA) warns iron ore price will fall by 27% in the next year

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 owns shares of 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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3oPXRd8

The Commonwealth Bank of Australia (ASX: CBA) share price is on course to end the week on a subdued note.

At the time of writing, the CBA share price is down almost 0.5% to $103.00. Though, positively, that doesn’t take much of the shine off its stunning performance this year.

Since the start of 2021, the CBA share price is up a sizeable 23%. That’s more than two and half times the return of the S&P/ASX 200 Index (ASX: XJO).

Can the CBA share price keep rising and hit $120 by the end of 2021?

The good news is that one leading broker believes the CBA share price still has room to run higher.

According to a recent note out of Bell Potter, its analysts have a buy rating and $118.00 price target on its shares.

Based on the current CBA share price, this implies potential upside of 14.5% over the next 12 months before dividends.

Bell Potter is also forecasting a $4.06 per share fully franked dividend in FY 2022. If we add this into the equation, the potential total return stretches to over 18%.

Based on this, the broker clearly believes there’s a chance that CBA shares could be trading close to $120 come the end of the year.

What did it say?

Bell Potter is positive on the CBA share price due to its belief that Australia’s largest bank will come out of the pandemic in a strong position.

It commented: “Like it or not, COVID-19 is seen as a good thing for CBA. The bank has now bounced back from its lows and is on its way back to its usual top line growth potential. Combined with effective cost management, strong prudential measures and IT leadership, CBA should be able to ride out the COVID-19 storm and emerge fundamentally stronger once the pandemic has ended and when interest rates begin to rise once again.”

And while the broker likes Australia and New Zealand Banking GrpLtd (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB) as well, it notes that Commonwealth Bank is its top pick among the major banks.

It explained: “We continue to prefer CBA (Buy) and ANZ (Buy) (the former based on future performance potential and the latter purely on pricing), the pecking order is now shifted as follows: (1) CBA; (2) NAB; and (3) ANZ.”

The post Could the CBA (ASX:CBA) share price hit $120 by the end of 2021? appeared first on The Motley Fool Australia.

More reading

• What happened for the CBA (ASX:CBA) share price in the FY22 first quarter?
• Why A2 Milk, CBA, Flight Centre, & Magellan’s shares are sinking
• CBA (ASX:CBA) share price slides as bank is awarded for rapid cloud migration
• ASX 200 bank shares fall flat amid flurry of new regulations
• Travel stocks soar. Hopes for a new COVID treatment. Evergrande drags on. Scott Phillips on Nine’s Late News

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.

from The Motley Fool Australia https://ift.tt/3AkQehe