Foreign investors sell Aussie bank stock
(29 May 2013 – Australia) The big four Aussie banks have been touted as overvalued on the sharemarket, following the huge sell-off last week, particularly by foreign investors.
The Commonwealth Bank of Australia (CBA) is the most expensive bank in the world – its price-to-earnings ratio recently lifted to about 15.5 times its annual earnings.
Analysts said a falling Australian dollar and expectations of an end to quantitative easing in the US already saw foreign investors sell-off their shares in Australian banks last week.
As the currency has eased, overseas investors have sold stocks in Australian banks and resources until it is determined how far the dollar falls.
CIMB analysts said foreign investors were marginal buyers in financial institutions, according to bank registry data. But they expected the sell-out could "trigger an unwinding of this overvaluation".
Subscribe