Here are the news headlines from the S&P/ASX 200 (INDEXASX: XJO)(ASX: XJO) on Thursday. In focus: analysts are putting a hefty price tag on Commonwealth Bank of Australia’s (ASX: CBA) CFS Group business.
Here’s the key headline data:
Australian Dollar ($A) (AUDUSD): 73.42 US cents
Dow Jones (DJI): down 0.7%
Oil (WTI): $US72.39 per barrel
Gold: $US1,254 per ounce
Australian Investing News
Making news in Australia, Commonwealth Bank of Australia’s (ASX: CBA) decision to offload some of its wealth management and advisory businesses has caught the attention of analysts.
Morgan Stanley says the CFS Group, which will include CBA’s funds management and broking arms, could be worth as much as $8 billion, or $4.50 per share. Meanwhile, Citi analysts reckon it could fetch up to $7 billion, implying a profit multiple of 10 to 14 times.
As we reported here, Why Commonwealth Bank of Australia (CBA) Is Selling CFSGAM, the big banks have been under pressure to divest their mortgage broking and advisory businesses because of the inherent conflicts of interests it causes for financial advisers. Despite the move to sell some of its assets, however, CBA said it will retain its, “salaried financial advice business”.
Also in the news, property business Ingenia Communities Group (ASX: INA) released a trading update presentation showing upgraded profit guidance. For its 2018 financial year (FY18), Ingenia is targeting profit before interest and tax (EBIT) over $48.5 million. Ingenia expects to report between 280 and 285 new home settlements.
Dental business Pacific Smiles Group Limited (ASX: PSQ) also provided a trading update for FY18. Pacific Smiles expects to report the opening of 10 new centres and report underlying operating profit growth of between 2% and 4%.
Finally, the Australian Dollar ($A) (USDAUD) has continued its fall against the US Dollar (USD) as speculation of a trade war between the US and China rages on. While a trade war could hurt our miners like Rio Tinto Limited (ASX: RIO) and BHP Billiton Ltd (ASX: BHP), some commentators believe Trump’s decision to ban Chinese investments in US technology could be a net positive for our technology sector.
Would Warren Buffett be worried about Trump and Beijing?
We doubt it. Buffett was a millionaire in his late 20’s but ‘only’ worth $300m at his 50th birthday. Now he is a $US84 billion investor. That means he made 99% of his wealth after turning 50! How does a 50-year-old do that? Download the free Aussie investing ebook, “What Buffett’s Investing Checklist Can Teach Aussie Investors“ when you join the free Rask Group Investor Club Newsletter. You’ll get insights into the 4 steps Buffett uses to pick his investments.