Needle on leading Blue-chips on ASX: NAB, CBA, WBC, ANZ, CSL

  • Jun 16, 2020 AEST
  • Team Kalkine
Needle on leading Blue-chips on ASX: NAB, CBA, WBC, ANZ, CSL

Summary

  • Investment in blue-chip companies are relatively less risky as compared to mid-cap and small-cap companies as these companies are mature and possesses solid strength to navigate through economic downturn.
  • By the end of May, NAB finalised its SPP offer by May-end, growing the SPP size by A$750 million, and raised a total amount standing at A$1.25 billion under SPP, to help the bank aid in situations arising out of coronavirus and during acute crisis in economy.
  • Recently, CSL notified that it agreed to exercise its right for the acquisition of Vitaeris Inc., which would aid in the growth of the Company’s strategic scientific platform.

In general, blue-chip investment in a portfolio provides an investor, with support to combat an economic crisis. Blue chip entities are usually economically stable ones, functioning with gains even during economic fallout. They are safe investment option for an investor because of their lower degree of volatility. Such stocks include of marginal to zero debt, huge market cap and robust balance sheet.

In the below article, we will look at some of leading ASX-listed blue-chip companies.

National Australia Bank Limited

National Australia Bank Limited (ASX:NAB) is one of the well-known banks of Australia, which provides banking, financial and related services.

The bank on 9 June this year issued A$205,000,000 subordinated notes, with respect to its US$100,000,000,000 global medium-term note programme. The bank has also finalised its share purchase plan and raised A$1.25 billion, as announced on 27 May. NAB increased the size of share purchase plan by A$750 million as compared to its previous target of A$500 million considering strong support showcased by eligible shareholders.

Previously, as notified in April the bank also completed institutional placement of A$3 billion. The total amount raised would assist NAB to navigate through numerous possible scenarios related to COVID-19 pandemic, including a prolonged and severe economic downturn.

Do Read: How these major banks are navigating the COVID-19 storm?

On 16th June 2020, the stock of NAB was trading at A$18.86 per share, with a rise of 4.199% (at AEST 1:57PM). The stock of WBC has delivered returns of 19.78% and 2.54% during the period of one month and three months to shareholders.

Commonwealth Bank of Australia

Baking and financial services provider, Commonwealth Bank of Australia (ASX:CBA) on 12 June announced that it has appointed Simon Moutter as an independent, Non-Executive Director of the Company, effective 1st September 2020.

CBA has also issued A$ 210 million worth of subordinated notes pursuant to its U.S.$70,000,000,000 Euro Medium Term Note Programme on 28th May 2020.

Sales of 55% Interest in CFS: In the month of May 2020, CBA reached an agreement with KKR (global investment firm) to sell its 55% interest in Colonial First State (or CFS) to KKR. The total valuation for CFS on a 100% basis stood at $3.3 billion, which would result in CBA receiving cash proceeds of around $1.7 billion from KKR. The sale price indicates a multiple of 15.5x pro forma net profit after tax of around $200 million of CFS.

During Q3 FY20 for the period closed 31 March, the unaudited statutory net profit of CBA stood at around $1.3 billion. Net interest income for the period was flat, with strong volume growth in core markets offset by lower margins.

 

Source: Company's report

 

On 16th June 2020, the stock of CBA was trading at A$68.82 per share, with a rise of 3.801% (at AEST 1:55PM). The stock of WBC has delivered returns of 11.24% and11.02% during the period of one month and three months to shareholders.

Westpac Banking Corporation

Westpac Banking Corporation (ASX:WBC) provides banking, financial and related services.

In the announcement dated 4th June 2020, Westpac notified the market on the outcome of AUSTRAC statement of claim issues related to WBC’s AML/CTF (compliance) failures.

Further, on 12 June, WBC filed its Defence on AUSTRAC’s Statement of Claim on 15 May 2020, wherein WBC admitted to a substantial majority of the contraventions alleged by AUSTRAC. However, WBC has kept on reviewing its procedures and portion of that has been divulged to AUSTRAC matters with respect to its obligation to submit (threshold) transaction reports.

During 1H FY20 ending 31 March, the net interest margin of the bank stood at 2.13%, reflecting a rise of 1 basis points. WBC’s statutory net profit stood at $1,190 million, reflecting a fall of 62%. 

Do Read: Asset write down of $1.43 billion by Westpac.

On 16th June 2020, the stock of WBC was trading at A$18.04 per share, with a rise of 3.797% (at AEST 1:54 PM). The stock of WBC has delivered returns of 13.89% and 8.76% during the period of one month and three months to shareholders.

Australia and New Zealand Banking Group Limited

Australia and New Zealand Banking Group Limited (ASX:ANZ) recently announced the sale of its asset finance business in New Zealand, UDC Finance to Shinsei Bank Limited for the consideration of NZ$762 million following a strategic review of UDC Finance. This sale transaction provides around A$439 million of Level 2 Group CET1 capital at settlement.

 

                        

 

During 1H FY20 for the period close 31 March, ANZ reported a decline of 51% in statutory profit after tax, which amounted to $1.55 billion primarily due to credit impairment charges of $1.674 billion.

On 16th June 2020, the stock of ANZ was trading at A$19.16 per share, with a rise of 4.074% (at AEST 1:49 PM). The stock of ANZ has delivered returns of 19.24% and 11.91% during the period of one month and three months to shareholders.

CSL Limited

International biotech entity, CSL Limited (ASX:CSL) is engaged into developing producing and marketing of pharma and diagnostic items.

The Company recently on 9 June announced that it has agreed to exercise its right acquire Vitaeris Inc., which is a clinical-stage biotechnology entity having focus on the development of phase III of a treatment for rejection in solid organ kidney transplant patients.

Do Read: A look at business update of CSL.

In another update, CSL stated that in order to fast-track development and production of COVID-19 vaccine candidate, it has inked a partnership deal with the University of Queensland and CEPI.

On 16th June 2020, the stock of CSL was trading at A$285.13 per share, with a rise of 2.274% (at AEST 1:35 PM). The stock of CSL has delivered returns of -7.64% and -0.91% during the period of one month and three months to shareholders.

 


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