Commonwealth Bank of Australia (ASX: CBA), Australia's largest bank has seen its share plunge by 3.7% in late afternoon trading to around $90.00.
Looks like the CBA will have to wait much longer to claim its 'first to $100 share price' trophy, unless CSL Limited (ASX: CSL) gets there first that is.
The fall in CBA shares has dragged on the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO), with the index down around 0.7%.
Here are three reasons why the shares might be trading lower today…
- Australia and New Zealand Banking Group (ASX: ANZ) today reported a cash profit of $1.8 billion for the first quarter, just 3.5% better than the same quarter last year. The bank says it sees a tougher trading environment thanks to global conditions, including lower commodity prices. Clearly what affects ANZ will also have an impact on Commonwealth Bank.
- Commonwealth Bank went ex-dividend today, with shareholders to receive $1.98 per share on April 2, 2015. Still, shares are down $3.46, so there's obviously more to the story. Maybe it was shareholders holding their shares until they were on the books to receive the dividend and are now selling out.
- Valuation. On a price to book, return on equity and P/E ratio basis, CBA shares are richly valued. It's all about the fully franked dividend yield though, with Commonwealth Bank paying income at 4.6%. That's getting fairly low, and investors may be ditching the big bank and switching into stocks with better yields.
The ASX stock that is a better bet than the banks
