The Commonwealth Bank is a banking corporation based in Sydney, Australia and provides a variety of financial services including retail, business and institutional banking services in several countries in the pacific region. The bank’s current CEO is Ian Narev whose current earning is $ 16.2 million annually and for the year ended 30th June 2011, the company reported a profit after tax of $ 6835 million and paid a total dividend for the year of $ 3.20 per share, with the last instalment paid on 6th October 2011.Its size of business by total assets is $ 667,899 million as at 30th June 2011. It has 51000 employees and its share value recorded a high of $ 57.52 and a low of $ 44.52 for the 52 week period to 8th October 2011.
B: GRAPH OF THE DAILY SHARE MOVEMENTS OF THE COMMONWEALTH BANK (CBA)
Closing Price ($)
GRAPH OF THE DAILY MOVEMENTS OF THE ASX200
Closing Value (points)
C: PERFORMANCE OF COMMONWEALTH BANK OF AUSTRALIA SHARES AGAINST THE TREND OF THE ASX200
The shares of the Commonwealth bank of Australia for the 52 week period to October 2012 against the trend of the ASX 200 for the same period can be said to have been consistent for the period up to December 2011 when the performance of the shares broke from this trend. Between October 2011 and December 2011, a rise in the performance of the ASX200 had the same effect on the performance of the shares of the Commonwealth Bank of Australia. However, this trend changed from January 2012 as the performance of the Commonwealth Bank of Australia broke from this trend and recorded a better performance against the trend of the ASX200, and the difference in percentage change of the ASX200 and the shares of CBA grew substantially. The only major dip in the performance of the shares of the shares of CBA in December 2011 and the subsequent months can be attributed to the “Unhappy Banking” action by a client of the Bankwest group which had been taken over by the Commonwealth Bank of Australia, and the subsequent senate enquiry which followed. The rise in the trend which followed this can be attributed to the confidence that investors had with the bank shown by the stellar performance in the period ended 30th June 2012 as shown in its annual report.
D: GAIN MADE BY SHARE FOR THE TRACKING PERIOD
Price at the start of tracking period:
$ 46.56
Price at end of tracking period:
$ 56.59
Difference in prices:
$ 9.88
73
Gains made:
= (73* $ 9.88) =$ 721.24
E: BUY/ SELL/HOLD DECISION
The shares held for Commonwealth bank of Australia should be held since from the trend discussed above, they have been on an upward trend in price and holding on to them may realise higher gains in the future.
REFERENCES
Commonwealth Bank 2011 Annual report, retrieved from http://www.commbank.com.au/about-us/shareholders/pdfs/annual-reports/2011_Commonwealth_Bank_Annual_Report.pdf
Osborne, Paul. 10 August 2009. "Storm Financial collapse plan outlined". The Age (Melbourne). Retrieved 15 January 2010.
The Sydney Morning Herald. 12 March 2012. "Bankwest inquiry may start within days, senator says". Retrieved from http://www.smh.com.au/business/bankwest-inquiry-may-start-within-days-senator-says-20120312-1utud.html 21 March 2012.
