The banking wrap 1: CBA loses last buy recommendation

This time last week the ASX 200 had just suffered from a big overnight correction in commodity prices, leaving banks looking smug in outperforming their resource rivals. Commodity prices merely blinked however, and with the US Treasury market under a deal of pressure the resource sector has led the index 2.9 per cent higher this week (ending Thursday), with the big four banks trailing on an average 1.1 per cent gain.

It was all about Westpac again nevertheless, as the long-time favourite continued to claw back from its interim result and guidance thrashing with a 3.2 per cent jump. Commonwealth added another 1.8 per cent, but the smaller banks struggled, with ANZ adding 0.2 per cent and National losing 0.9 per cent.

There was no individual news of note amongst the big four this week, and no changes to the average target prices of sell-side. CBA, ANZ and NAB finished the week five to seven per cent ahead of average targets. Westpac remains alone at 3.6 per cent below the average price target despite an ongoing, valiant comeback of its share price.

There was, however, one recommendation change. Research house Aspect Huntley this week lowered CBA from accumulate to hold. For the purpose of correlation, FNArena equates accumulate with buy, which means CBA has now lost its last buy rating among the ten leading brokers and researchers in the FNArena universe.

The equity market continues to love CBA, but the brokers now collectively rate the bank on a 0/6/1 ratio of buy/hold/sell. This also drops the net buy/sell ratio among the big four to 7/9.