The recent fall in bank share prices through August and September saw banks give up around half the gains of late May/June, with the valuation lows of the COVID-19 era being re-tested. Bank valuations bottomed in late May, just prior to an aggressive, but short-lived, re-rating of bank share prices.
While we acknowledge valuation appeal – both relative and absolute – we remain guarded around adopting a more positive stance towards the banks in the Wilsons Australian Equity Focus List – where we remain underweight.
In this week’s view on Australian equities we unpack banking sector performance, look at the catalysts and conditions for a potential re-rate.
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John is a leading investment strategist with 20 years experience.