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The ASX Ltd (ASX: ASX) share price is falling lower on Wednesday despite an address from the company Chairman spruiking an “exchange for the future”.

Shares in the share market operator are down 1.3% this morning with the broader market falling lower. The S&P/ASX 200 Index (ASX: XJO) has fallen 1.4% to 7,170 points at the time of writing as the Aussie market followed Wall Street lower.

So, apart from the broader market decline, what should interest ASX shareholders right now?

ASX share price slides despite ‘exchange of the future’ message

Today’s update contained the annual general meeting (AGM) addresses from company Chairman Damian Roche as well as CEO Dominic Stevens.

Mr Roche touted a vision for an “exchange for the future” in his address including the below excerpts:

While FY21 had its share of challenges for ASX, it was a year of significant achievement too.

We must continue to perform our core functions with excellence and adopt new, world-best technologies too. That is exactly what we are doing.

We are also serious about investing in world-leading technology to serve the market for the next decade and beyond. This investment in improved infrastructure helps unlock innovation. It is also vital for our customers and for the reputation, stability and competitiveness of Australia’s financial markets.

It is part of ASX’s goal to transform our technology stack and digitise manual processes to build an exchange for the future. This is a multi-year and multi-project undertaking.

The focus on technology and innovation comes after the November 2020 equity market outage. The ASX share price slid lower after the outage which also led ASIC to investigate its fitness to hold a licence.

CEO Dominic Stevens’ address was also included in today’s update with the following excerpts below:

FY21 marks five years of progressing our strategy to build an exchange for the future.

In many ways, ASX has been investing and evolving its operations for the future for over 150 years – only the technology enabling our business and the breadth of our focus have changed.

Our strategy has seen revenue continue to break new records, and it has also seen expenses increase as we fund the transformation of the exchange.

I would like to thank all our shareholders for your support over the past five years. I look forward to ASX continuing to improve, evolve and build its value in the years to come.

Foolish takeaway

While today’s addresses focused on building for the future, the ASX share price has been under pressure in early trade. Shares in the share market operator have slumped on Wednesday morning in line with broader market movements.

The post ASX (ASX:ASX) share price slides despite chair spruiking ‘exchange of the future’ message appeared first on The Motley Fool Australia.

More reading

• ‘Pump & dump’ of ASX shares could lead to jail, ASIC warns
• Why has the ASX (ASX:ASX) share price slumped 6% in 3 weeks?

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

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The Bigtincan Holdings Ltd (ASX: BTH) share price is in negative territory today regardless of a positive company announcement.

At the time of writing, the enterprise mobility software company’s shares are down 3.38% to $1.285. This means its shares are now down by more than 12% in a month.

What did Bigtincan release to the ASX?

According to its update, Bigtincan advised it has signed a contract with Asurion to deploy its sales enablement platform. This comprises of Bigtincan’s Content Hub and Learning Hub for the initial deployment.

It is expected the deal will generate around $2 million in revenue for Bigtincan over the next three years.

The software will be used by Asurion’s channel partners across North America. The platform will deliver training, communications and mobile content centred on improving sales techniques for Asurion’s products.

Bigtincan’s solution is anticipated to reach up to 50,000 Asurion distributor users over the course of the agreement.

Bigtincan CEO and co-founder David Keane commented:

It’s great to see Asurion choosing to use the Bigtincan platform to provide content and training to its distributors’ employees, enabling their customer facing teams to intelligently prepare for, measure, and continually improve the buying experience.

This is a further example of how Bigtincan is helping our customers create the buying experience of the future for their customers. We are excited to support Asurion’s deployment across its partner network.

Who is Asurion?

Founded in 1994, Asurion is a global tech care company that provides a number of services for a wide range of technology products. This includes insurance, installation, repair, replacement and support for mobile phones and laptops, also extending to household appliances.

The company operates its offices across a number of locations worldwide and has more than 300 million customers.

Bigtincan share price snapshot

Since this time last year, Bigtincan shares have lifted more than 20% but are flat for 2021. The company’s share price is hovering around the middle of its 52-week range of 76.1 cents to $1.561.

Based on today’s price, Bigtincan has a market capitalisation of roughly $725.7 million with approximately 545.6 million shares on issue.

The post Bigtincan (ASX:BTH) share price dips despite new contract appeared first on The Motley Fool Australia.

More reading

• 3 rapidly growing ASX tech shares to buy
• Here’s why the Bigtincan share price has soared 50% higher in the past 6 months
• 3 small cap ASX shares analysts rate highly
• 4 small cap ASX shares to watch
• 3 stellar small cap ASX shares for your watchlist this month

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended BIGTINCAN FPO. The Motley Fool Australia owns shares of and has recommended BIGTINCAN FPO. 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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At lunch on Wednesday, the S&P/ASX 200 Index (ASX: XJO) has followed the lead of US markets and is a sea of red. The benchmark index is currently down 1.5% to 7,166.6 points.

Here’s what is happening on the ASX 200 today:

Big four banks weigh on ASX 200

The big four banks are tumbling today and are weighing down the ASX 200. This has been driven by broad market weakness and concerns over plans by financial regulators to clamp down on housing market risks. The Commonwealth Bank of Australia (ASX: CBA) share price is down 1.5% at the time of writing.

Gold miners rise

Gold miners Evolution Mining Ltd (ASX: EVN) and Newcrest Mining Limited (ASX: NCM) are pushing higher today despite weakness in the gold price overnight. It appears as though investors have been buying safe haven assets today due to the market volatility. S&P/ASX All Ordinaries Gold index is up 0.9% at lunch.

Afterpay shares tumble

It has been a bad day for the Afterpay Ltd (ASX: APT) share price on Wednesday. Investors have been selling down the buy now pay later provider’s shares in response to a pullback in the Square share price overnight. As Square is acquiring Afterpay in an all-scrip deal, the value of the takeover rises and falls with Square’s shares. The Square share price dropped 6% overnight.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Wednesday has been the St Barbara Ltd (ASX: SBM) share price with a 4.5% gain. Demand for safe haven assets appears to be behind this rise. The worst performer has been the Mineral Resources Limited (ASX: MIN) share price with a 6% decline. This morning Morgan Stanley retained its underweight rating and cut its price target on the company’s shares to $41.00.

The post ASX 200 (ASX:XJO) midday update: Big four banks fall, Afterpay tumbles appeared first on The Motley Fool Australia.

More reading

• Afterpay (ASX:APT) and Zip (ASX:Z1P) share price falls as Mastercard opens up the BNPL sector
• Confirmed: APRA is planning action on home loans, ASX 200 banks drop
• Why ASX tech shares are crashing on Wednesday
• The S&P 500 just dropped 2%. Why is this impacting ASX 200 shares?
• Square slides 5%. What does this mean for the Afterpay (ASX:APT) share price?

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 AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. 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 Novonix Ltd (ASX: NVX) is climbing higher on Wednesday as most ASX shares slump in early trade.

Shares in the Aussie battery materials and technology company have jumped more than 4% at the time of writing to outperform the All Ordinaries Index (ASX: XAO) today. The broad market index is down 1.56% at midday with Aussie shares getting off to a weak start.

So, why is Novonix any different to other ASX shares on Wednesday?

Why the Novonix share price is outperforming on Wednesday

For long-term investors, a one-day price trend doesn’t necessarily tell a story. However, the Novonix share price continues to climb this morning despite broad market weakness.

Today’s gains are not a once-off, however. The Novonix share price is up nearly 200% in the last 6 months and 447.6% year to date. Those are some impressive numbers that have boosted the group’s market capitalisation above $2.5 billion.

Novonix shares recently hit an all-time high on the back of strong lithium demand. Battery grade lithium carbonate prices jumped more than 20% in the Chinese domestic market in the first 2 weeks of September alone.

That means battery grade lithium prices are up more than 200% in 2021, which may help to explain the bumper performance seen in the Novonix share price. Those gains have also propelled Novonix into the S&P/ASX 300 Index (ASX: XKO), which has helped further boost its profile and coverage.

Today’s gains have continued that run despite many ASX shares slumping lower on Wednesday. This morning’s gains continue the recent trend we’ve seen amongst ASX lithium shares.

The Pilbara Minerals Ltd (ASX: PLS) share price is up more than 130% this year, while the Li-S Energy Ltd (ASX: LIS) share price soared as much as 260% above its 85 cent-per-share listing price in yesterday’s initial public offering (IPO).

Foolish takeaway

Despite the market weakness today, we’re seeing gains in the Novonix share price as investors continue to hunger for Aussie lithium shares to capitalise on the current boom.

The post Why the Novonix (ASX:NVX) share price is climbing among a sea of red on Wednesday appeared first on The Motley Fool Australia.

More reading

• Which ASX 300 shares are the top movers today?
• Which ASX 300 shares are leading the way on Monday?
• Novonix (ASX:NVX) share price leaps to another new all-time high
• Which ASX shares are looking to finish the week as the top movers on the ASX 300 today?
• The Novonix (ASX:NVX) share price appears to have come off the boil. Is it a buy?

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

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Bitcoin (CRYPTO: BTC) hasn’t been immune to the global selloff in equities.

Bitcoin is down 2.2% over the past 24 hours, currently trading for US$41,320 (AU$57,388).

Ethereum (CRYTPO: ETH), the world’s number 2 crypto by market value, is sliding as well.

One Ether is currently worth US$2,846, down 3.5% since this time yesterday.

And it’s not just Bitcoin and Ether. All of the top-10 cryptos by market cap are in the red over the past 24 hours, according to data from CoinMarketCap.

This, as the S&P/ASX 200 Index (ASX: XJO) follows US equity markets sharply lower, with investors fretting about the US Federal Government hitting its debt ceiling and sharply rising commodity prices fuelling renewed inflation fears.

And it’s this inflationary angst that could end up supporting the Bitcoin price.

That’s according to a new survey, which reveals more Aussie investors are looking to cryptos as a hedge against a potentially sinking dollar.

What did Gemini’s crypto survey reveal?

Global crypto platform Gemini commissioned a survey of 1,010 Australians who have invested in cryptos.

Chief among the results was that 59% of respondents believe cryptocurrencies will offer better long-term growth potential than the Aussie dollar. Meaning if inflation fears kick in, more investors may turn to Bitcoin and other leading digital tokens.

Not surprisingly, cryptocurrencies remain more popular with younger investors than older investors. 72% of 25–34-year-olds said they believe cryptos are a valuable asset in a diversified portfolio, compared to 57% of those over 55.

Some issues holding respondents back from investing more in cryptos are lack of regulation and lack of information. 32% of the surveyed panel who don’t currently invest said they will invest more when cryptocurrencies are regulated. 34% said they’d up their investments when they have more information about crypto markets.

As for gold, gold bugs rest easy. Only 8% of respondents thought cryptos were a better investment than gold.

And, with the resurgent price, 51% of respondents believe it’s too late to invest in Bitcoin.

Bitcoin has experienced “meteoric growth”

Commenting on the survey results, Jeremy Ng, Gemini’s Asia-Pacific managing director said:

Both cryptocurrency and gold are often seen as ways to hedge against inflation. Gold has historically been considered a safe-haven asset. However, Bitcoin and several other cryptocurrencies have experienced meteoric growth and offer unique, innovative features that make them stand out.

Some cryptocurrencies have the potential to benefit investors by creating tools and resources that support the growth and exchange of value outside of traditional financial institutions, without the need for an intermediary. The blockchain technology that underlies crypto can be applied to a large range of industries, beyond simply money and finance.

Jeremy isn’t being hyperbolic when he says there’s been meteoric growth in the crypto world.

According to Gemini’s release, the total crypto market cap in September 2020 was roughly AU$529 billion. As of September 2021, it stood at AU$2.9 trillion

However, Jeremy added these words of caution to would be Bitcoin and crypto investors:

The cryptocurrency space is still in its early stages and is therefore subject to much more volatility than the traditional asset classes like the stock market. As a result, it is possible for individuals to see short-term losses.

In other words, do your homework before making any investments. And never invest more than you’re prepared to lose.

The post Why inflation angst is driving more Aussie investors to Bitcoin appeared first on The Motley Fool Australia.

More reading

• Will Ethereum overtake Bitcoin?
• China brings the hammer down on Bitcoin and all other crypto transactions
• AMP Capital’s chief economist on the future of Bitcoin and altcoins
• Not even Bitcoin and Dogecoin are immune to the Evergrande fallout
• How could a share market correction impact cryptocurrencies like Bitcoin?

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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The FYI Resources Ltd (ASX: FYI) share price has jumped 1.8% higher on Wednesday morning, up 12.8% in the past week. Here’s why shares in the Aussie alumina group are soaring right now.

Why the FYI Resources share price has surged 13% in a week

Let’s start with what FYI Resources actually does. The company describes its focus as “developing an innovative and vertically integrated high quality, high-purity alumina for use in various high growth tech applications”.

Essentially, FYI is focused on the exploration and evaluation of potash projects in South East Asia. That exposure to alumina, however, is proving to be a winner in 2021.

The May 2021 agreement with Alcoa Australia to enter an exclusivity agreement to facilitate negotiations of a high purity alumina project joint venture has certainly helped.

FYI subsequently completed its due diligence and extended the agreement by a month. The promising developments have been enough for shareholders to jump on board. Subsequent buying has bid up the FYI Resources share price this year to its current level.

The FYI Resources share price is flying, having surged 198% higher this calendar year. Shares in the ASX resources share were just shy of a 13-year high this morning before settling 0.61% lower to 81.5 cents at the time of writing.

What about commodity prices?

The key here has been recent gains in global alumina prices. According to the London Metals Exchange, LME Alumina (CRU/Fastmarkets MB) is changing hands for US$378.41 per tonne right now.

That represents a more than 25% gain since the August 31 price of US$302.24 per tonne. The FYI Resources share price has been charging higher this year and the underlying commodity price has had a big hand in that.

It’s been a similar story for Alumina Limited (ASX: AWC). Alumina shares have gained 47.9% in the past year in line with the strong commodity demand.

Foolish takeaway

The FYI share price has even had some double-digit, single-day increases in 2021. For instance, on 9 August, shares in the ASX resources group jumped 22% higher despite no news.

Shares in the alumina company are trending up today and are now up 12.8% in the past week.

The post Why the FYI Resources (ASX:FYI) share price has surged 13% in a week appeared first on The Motley Fool Australia.

More reading

• Here’s why the FYI Resources (ASX:FYI) share price is down 9% on Friday

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

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The Smartgroup Corporation Ltd (ASX: SIQ) share price has jumped out of the starting blocks from the opening of trade this morning and now trades at $9.15.

Shares in the employee management services provider are edging higher after it revealed a consortium of investors put forward a proposal to acquire the company.

Here’s what we know.

Smartgroup receives offer of acquisition from investor group

Smartrgoup advised a consortium of investor groups had put forward an “indicative, non-binding and conditional proposal to acquire 100% of the shares in Smartgroup”.

The consortium is made up of US-based investment firm TPG Global, LLC, and Australian private equity investor Potential Capital.

Pension fund Aware Super is also in on the deal, providing trustee services, according to the company’s announcement.

Together, the consortium’s proposal is an all-cash consideration of $10.35 per Smartgroup share.

This represents a 32% premium to the Smartgroup opening share price on Wednesday but just an 11.5% premium to what it’s trading at now.

That price is also a 38.6% premium to “the 90-day volume-weighted average price of Smartgroup shares up until Tuesday 28 September”.

What’s interesting is that, under the scheme, “any franking credits attached to a dividend or capital return would be received by Smartgroup shareholders in addition to the proposed scheme consideration”.

Even still, the proposal is subject to a number of considerations including due diligence and final approval from Smatgroup’s board.

As such, Smartgroup has granted the consortium 4 weeks of due diligence by “opening the data room over the next week” to see if the parties can strike a deal.

Smartgroup’s board unanimously recommended that shareholders vote in favour of the proposal and has appointed an independent expert to see if the deal is a good fit for shareholders.

If successful, the deal would see Smartgroup de-list from the ASX as a private entity. Investors want a piece of the action and are driving the Smartgroup share price higher on the day. It jumped 20% at market open this morning before settling around 17% higher.

Smartgroup share price snapshot

After lagging the S&P/ASX 200 Index (ASX: XJO)’s return since 2019, the Smartgroup share price has climbed 38% this year to date and a further 59% over the past 12 months.

Both of these returns have outpaced the broad Index’s return of around 25% in this time.

The post Smartgroup (ASX:SIQ) share price soars 17% on TPG Global takeover bid appeared first on The Motley Fool Australia.

More reading

• Top ASX shares to buy in September 2021

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 owns shares of and has recommended SMARTGROUP DEF SET. 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 Vital Metals Limited (ASX: VML) share price is out of form again on Wednesday.

In morning trade, the rare earths explorer’s shares are down 5% to 5.4 cents.

This means Vital Metals shares have now lost over 20% of their value since this time last month.

Why is the Vital Metals share price sinking?

There appear to have been a couple of catalyst for the decline in the Vital Metals share price.

One is weakness in the resources sector over the period in question. For example, Vital Metals isn’t the only share falling materially.

The Lynas Rare Earths Ltd (ASX: LYC) share price has fallen 13% over the last couple of weeks.

In addition to this, profit taking could be weighing on the Vital Metals share price. After all, its shares are still up approximately 80% in 2021 even after recent declines.

Why are its shares up 80% this year?

Investors have been bidding the Vital Metals share price higher this year amid excitement around its Nechalacho project in Canada.

Earlier this year, the company received formal acceptance from its offtake partner, REEtec AS, for its rare earth carbonate sample.

At the time, Vital Metals’ Managing Director, Geoff Atkins, commented: “Customer acceptance from REEtec is a key milestone for the development of the Nechalacho rare earth project and the construction of our Extraction Plant in Saskatoon.”

“This achievement demonstrates that we have our processes at Nechalacho working correctly and we can proceed in line with our plans. With the satisfaction of this milestone, the procurement of equipment for our Rare Earth Extraction Plant in Saskatoon will proceed.”

If all goes to plan, the company will be supplying REEtec with 1,000 tonnes of rare earth oxides (REO) per year over five years. After which, there is an option to increase the offtake volume by as much as 5,000 tonnes REO annually over 10 years.

However, with a market capitalisation of ~$250 million, judging by its recent share price performance, some investors may believe this is now priced into its shares.

The post The Vital Metals (ASX:VML) share price is down 20% in a month. What’s happening? appeared first on The Motley Fool Australia.

More reading

• Smartgroup (ASX:SIQ) share price soars 17% on TPG Global takeover bid
• Afterpay (ASX:APT) and Zip (ASX:Z1P) share price falls as Mastercard opens up the BNPL sector
• Confirmed: APRA is planning action on home loans, ASX 200 banks drop
• Why is the Prospect Resources (ASX:PSC) share price up 11% this month?
• Li-S Energy (ASX:LIS) share price up another 3% in second day of trading

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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The Afterpay Ltd (ASX: APT) share price and the Zip Co Ltd (ASX: Z1P) share prices are trending downwards today.

The negative price movement follows a recent Sydney Morning Herald article. The article confirms Mastercard Inc (NYSE: MA) will begin rolling out technology for any bank or financial institution to offer their own buy now, pay later (BNPL) service.

At the time of writing, shares in Afterpay are trading for $123.11 – down 3.24%. Zip shares are 1.41% lower at $7. The S&P/ASX 200 Index (ASX: XJO) is down 1.45%.

Let’s take a closer look.

The BNPL sector gets a little more crowded

The news might be rattling the Zip share price. Mastercard says “strong demand for BNPL services” has led it to develop the technology to enable any business to provide the BNPL model of payment.

According to the SMH, Mastercard will launch the program next year in Australia and already has 2 Aussie business partners. Those partners are Qantas Airways Limited (ASX: QAN) and Latitude Group Holdings Ltd (ASX: LFS).

Mastercard already offers its services to BNPL providers Afterpay and Commonwealth Bank of Australia (ASX: CBA). It is now expanding its scope to sell the infrastructure and services necessary to allow any business that wishes to offer payment for goods and services in 4 increments.

“We will expect to see, and frankly have already seen, interest from banks of all sizes, lenders, merchants looking for alternatives and new ways to offer lending products to consumers,” Mastercard Australasian president Richard Wormald told the outlet.

Latitude Financial CEO Ahmed Fahour also told the paper:

Through our long-standing partnership, Latitude is looking forward to working with Mastercard to bring new BNPL payment solutions to life in Australia, benefiting merchants and providing customers with a superior shopping experience.

This isn’t the first time increasing competition in the BNPL sector has affected the Zip share price. In September 2020, PayPal Holdings Inc (NASDAQ: PYPL) announced it was launching its own BNPL service. Zip shares would fall a whopping 12.8% by the end of the day.

Afterpay and Zip share price snapshot

Over the past 12 months, the Zip share price has increased 8.12% while the Afterpay share price has increased 50.46%. Of course, Afterpay shares got a real shot in the arm when Square Inc (NYSE: SQ) announced it would acquire the company. That was in a deal worth $39 billion at the time.

The post Afterpay (ASX:APT) and Zip (ASX:Z1P) share price falls as Mastercard opens up the BNPL sector appeared first on The Motley Fool Australia.

More reading

• Why ASX tech shares are crashing on Wednesday
• The S&P 500 just dropped 2%. Why is this impacting ASX 200 shares?
• Square slides 5%. What does this mean for the Afterpay (ASX:APT) share price?
• 5 things to watch on the ASX 200 on Wednesday
• 2 fantastic ASX tech shares to buy in October

Motley Fool contributor Marc Sidarous owns shares of Qantas Airways Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Mastercard, PayPal Holdings, Square, and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Mastercard and PayPal Holdings. 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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It has been confirmed that APRA is going to take action on home loans. This has happened on the same day that S&P/ASX 200 Index (ASX: XJO) banks are falling.

What is APRA?

For context on what has happened, the Australian Prudential Regulation Authority (APRA) is a regulator that supervises institutions across banking, insurance and other financial segments of Australia.

It is part of the Council of Financial Regulators, a co-ordinating body of Australia’s main financial regulatory agencies. There are four members, APRA, the Australian Securities and Investments Commission (ASIC), the Australian Treasury and the Reserve Bank of Australia (RBA).

The Council’s objectives are to promote stability of the Australian financial system and support effective and efficient regulation by Australia’s financial regulatory agencies.

This morning, the Council gave its quarterly statement for September 2021 after a meeting.

It discussed a number of items including the pandemic, the recovery and “housing market risks”. The Australian Treasurer, Josh Frydenberg, attended for parts of the meeting.

What will APRA do?

During the meeting, the Council talked about housing credit conditions and associated risks. It noted that housing credit grew in the first half of the year, from both owner-occupiers and investors. Lockdowns have reduced transactions and new listings, but prices continue to rise “briskly”.

The Council said it was mindful that a period of credit growth materially outpacing growth in household income would add to the medium-term risks facing the economy. However, it noted that lending standards remain sound.

Possible policy responses were discussed. APRA will continue to consult on implementing any particular measure. Over the next couple of months, APRA plans to publish an information paper on its framework for implementing any policies.

This could be important for many ASX 200 banks because they write billions of dollars of home loans each year and have large loan books exposed to the residential home loan market.

Yesterday, it was reported by the Australian Financial Review that regulators were looking at the increasing debt to income ratios, with the Treasurer’s blessing. In the three months to 30 June 2021, more than a fifth of new mortgage loans were to borrowers that were taking on debt of at least 6x their income.

How is this impacting ASX 200 bank share prices?

Looking at the current states of play, the share prices of Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group Ltd (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB) are down.

The smaller banks are also in the red. The Bank of Queensland Limited (ASX: BOQ) share price is down 1%, the Suncorp Group Ltd (ASX: SUN) share price is down 0.4% and the Bendigo and Adelaide Bank Ltd (ASX: BEN) share price is down 1%.

However, the ASX 200 banks are recovering from an early morning drop where the ASX 200 as a whole fell more than 1%, which could be the main reason for the decline in the banking sector.

Some of the big banks themselves have called for action to happen about loans before the housing market and loans go too far.

The CBA CEO Matt Comyn made some comments to the House of Representatives Standing Committee on Economics, saying that he is concerned by the housing market:

As the RBA has observed, activity in the housing market remains very strong, even after extended lockdowns in the two largest markets. We continue to monitor these developments closely, and have made adjustments to our lending settings. We are also thinking carefully about the impact of these dynamics on particular cohorts of home loan borrowers, including first home buyers.

The ASX 200 bank recently increased its serviceability buffer rate on assessing what rate borrowers would be able to meet repayments.

According reporting by REA Group Limited (ASX: REA), Mr Comyn also said to the committee:

It is much harder to act when the market is accelerating versus taking interventions to try to avoid too much of an acceleration. I want to be clear I’m not concerned about the point that we are at today but based on the acceleration I think it would be prudent to act sooner rather than later.

The post Confirmed: APRA is planning action on home loans, ASX 200 banks drop appeared first on The Motley Fool Australia.

More reading

• The S&P 500 just dropped 2%. Why is this impacting ASX 200 shares?
• Why these experts say the Westpac (ASX:WBC) share price could be on the way up
• Why these experts think the NAB (ASX:NAB) share price is on the way up
• Leading brokers name 3 ASX shares to sell today
• ASX 200 bank shares in focus amid planned loan crackdown

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 Bendigo and Adelaide Bank Limited. 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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