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Speaker 1: The Commonwealth Bank reports a nine point eight billion dollar profit,

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Speaker 1: demonstrating its growing strength in the Australian market. The latest

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Speaker 1: napland results show government funding is failing poorer families, and

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Speaker 1: the Corporate Watchdog alleges that ASX Limited misled the market.

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Speaker 1: Welcome to Fear and Greed. Daily business news for people

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Speaker 1: who make their own decisions. It is Thursday, the fifteenth

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Speaker 1: of August twenty twenty four. Are Michael Thompson and good morning, Sean.

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Speaker 2: Aylmer, Good morning, Michael Sewan.

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Speaker 1: The main story this morning. The country's largest company, the

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Speaker 1: Commonwealth Bank, has unveiled a better than expected cash profit

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Speaker 1: of nine point eight billion dollars, down two percent from

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Speaker 1: last year, and a hike in its dividend.

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Speaker 2: The two dollars fifty share final dividend takes the full

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Speaker 2: year dividend of four dollars sixty five fully franked. That's

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Speaker 2: a dividend yield on its current share price of just

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Speaker 2: three and a half a cent, But most investors have

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Speaker 2: been in the stock for much longer, meaning they're getting

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Speaker 2: more like a five percent plus dividend yale. They've also

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Speaker 2: gotten growth in the share price. That's a pretty good return.

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Speaker 2: The all important net interest margin, the difference between what

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Speaker 2: a bank pays on deposits and receives on loans or

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Speaker 2: steady at one point nine to nine percent. That's a

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Speaker 2: good result. And while the economy might be slowing, people

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Speaker 2: are still paying back their home loans, with the majority

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Speaker 2: of mortgagees in front of their scheduled repayments. The bank's

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Speaker 2: impaired loan expense what it puts aside for bad loans,

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Speaker 2: it fell, demonstrating confidence in Commonwealth Bank's loan book. It's

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Speaker 2: why the bank's share price rose following the announcement yesterday.

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Speaker 2: It finished up one point three percent. Even though it

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Speaker 2: is very highly priced already. It's got a market valuation

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Speaker 2: now of over two hundred and twenty two billion dollars,

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Speaker 2: which is more than the combined value of the next

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Speaker 2: two biggest banks, National Australian Bank and Westpac.

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Speaker 1: Shahan, you just said the Commonwealth Bank is highly priced,

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Speaker 1: and previously I've talked about like the market being priced

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Speaker 1: to perfection at the moment. Was yesterday's result good enough

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Speaker 1: to match just how much faith investors have been putting

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Speaker 1: into the bank.

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Speaker 2: Seemingly yes, even though most professional analysts still think it's

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Speaker 2: way too expensive. Commonwealth Bank just keeps growing its market share.

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Speaker 2: The proportion of Ossie Bank customers who say Combank is

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Speaker 2: their primary financial institution is thirty five and a half percent.

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Speaker 2: That's phenomenal. The next best is sixteen point four percent.

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Speaker 2: The other two big banks are more around that eleven

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Speaker 2: twelve percent. It has twenty four and a half percent

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Speaker 2: of the home lending market, twenty six and a half

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Speaker 2: percent of the household deposit market, and twenty five and

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Speaker 2: a half percent of the business market. Now, given there

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Speaker 2: are four major banks plus a bunch of smaller operators,

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Speaker 2: these are pretty impressive numbers. Combank's also getting better at

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Speaker 2: convincing customers to use its channels rather than third parties.

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Speaker 2: For example, two thirds of Commonwealth Bank's home loans are

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Speaker 2: sold by its own channels rather than through mortgage brokers,

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Speaker 2: so sixty six percent. For the overall market, it's only

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Speaker 2: twenty eight percent via own channels. The question, though, is

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Speaker 2: the bank too expensive at more than one hundred and

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Speaker 2: thirty three dollars a year. Well analysts argue that the

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Speaker 2: comm bank is trading on three times book value. What

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Speaker 2: that means is three times the value of the bank's

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Speaker 2: net assets now NAB's trading at one point nine times

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Speaker 2: book value, west Pac and Ain's at around at one

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Speaker 2: point four times book value. On that metric based on

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Speaker 2: assets owned by Commonwealth Bank, it is very very expensive.

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Speaker 2: But still investors are very keen to buy Commonwealth Bank shares.

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Speaker 1: Indeed, and of course we are not an investing podcast,

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Speaker 1: and you should seek professional advice before making investment decisions.

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Speaker 1: But sawn after the show, stick around because there is

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Speaker 1: an interview coming up with Commonwealth Bank CEO Matt Common

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Speaker 1: about yesterday's results.

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Speaker 2: Yes, so during reporting season we're working with a team

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Speaker 2: at Osby's to bring you interviews with leaders of some

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Speaker 2: of the Australia's biggest companies. Yesterday afternoon, David Kosh spoke

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Speaker 2: to me Common. The chat gives great insight into the

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Speaker 2: strategy behind the bank's results and what we were just

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Speaker 2: talking about. What Matt Common says to analysts who think

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Speaker 2: the stock is too expensive.

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Speaker 1: Yeah, Koshi and the team at Osby's do a great

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Speaker 1: job there. Australia's leading provider of live and on demand

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Speaker 1: video of the latest news in Australian business markets, economy, startups,

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Speaker 1: you can find it all head along to osbiz dot

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Speaker 1: com dot au to sign up. It's absolutely free. Shaw

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Speaker 1: on local markets. How do they perform yesterday?

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Speaker 2: There's some PASX two hundred closed up zero point three

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Speaker 2: percent to seven eight hundred and fifty one points, with healthcare,

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Speaker 2: technology and real estate stocks doing best. Much of the

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Speaker 2: action was around the stocks that were reporting otherwise. Aria

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Speaker 2: rose nearly four percent, Goodman Group jumped to three percent,

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Speaker 2: Wiesteak Global two point six percent, and CSL was up

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Speaker 2: two percent. On all prices fell yesterday to a four

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Speaker 2: month low, with futures dropping to ninety six fifty US

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Speaker 2: dollars a ton on the Singapore Exchange. That really hit

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Speaker 2: the major minors. BHP and Rio were both off nearly

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Speaker 2: three percent yesterday, four to Skew Metals Humble closer to

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Speaker 2: five percent. Plenty of results around the place. One worth

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Speaker 2: a mention is Bunning's landlord BWP Trust. It delivered a

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Speaker 2: big jump in profit, sending its share price up nearly

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Speaker 2: three percent. Take over target Aurora's share price jumped five

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Speaker 2: percent after the packaging group's underlying earnings beat estimates. Remember,

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Speaker 2: on Tuesday, Aurora rejected a two dollars fifty five a

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Speaker 2: share bid from a US private equity group. Yesterday's share

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Speaker 2: price closed at two dollars thirty nine, not far off

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Speaker 2: that two fifty five level. And also worth mentioned Cold

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Speaker 2: and Copper group Evolution Mining. Its underlying profit nearly tripled

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Speaker 2: on higher prices of the precious metal. The result beat expectations.

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Speaker 2: It's share price jumped at seven percent.

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Speaker 1: As Shawn, BWP Trust which you mean landlord Favor? So

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Speaker 1: what they own? They owned the warehouses and leased them

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Speaker 1: to Bunnings.

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Speaker 2: Yeah, yeah, yeah, yeah. It's a great little business because

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Speaker 2: if Bunnings is doing well and growing, then presumably BWP

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Speaker 2: Trust is as well.

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Speaker 1: Some fascinating businesses and some great stories.

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Speaker 2: Around sure, and Michael, that's something we actually talk about

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Speaker 2: in today's Ask Fear and Greed.

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Speaker 1: Fantastic segue, Sean, because Ask Fear and Greed is our

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Speaker 1: bonus podcast comes out at midday every Tuesday and Thursday.

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Speaker 1: It's where we answer listener questions. If you've got a

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Speaker 1: question about anything to do with markets, or the economy

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Speaker 1: or anything like that, send it on through via the

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Speaker 1: website Fearangreed dot com dot are you any of our

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Speaker 1: social media platforms. Today's question it feels like it's right

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Speaker 1: up your ally sean.

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Speaker 2: So to speak.

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Speaker 1: Goodness, who knows what you're going to get at mid day?

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Speaker 1: Now stick around for that one. International markets mu's going on.

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Speaker 2: Oil prices are higher following a report showing a sizeable

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Speaker 2: drop in US crews dot piles. Goal prices are flat.

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Speaker 2: Aussie dollars up a bit, buying sixty six point three

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Speaker 2: US cents. Also, yesterday, the Reserve Bank of New Zealand

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Speaker 2: announced a surprise cut and interest rates, dropping the benchmark

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Speaker 2: rate twenty five basis points to five point twenty five percent.

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Speaker 2: And that, of course compares to our benchmark right to

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Speaker 2: four point three five So the kiwi's push rates higher, quicker,

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Speaker 2: and now they're cutting before we start cutting. It's actually

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Speaker 2: the first time that the Reserve Bank of New Zealand

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Speaker 2: has cut since the COVID nineteen pandemic.

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Speaker 1: Does the Reserve Bank here take much notice of that?

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Speaker 2: A diplomatically, I'm sure they take notice of everything that's

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Speaker 2: going on around the world, and reality probably not.

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Speaker 1: Thank you for a very direct answer to that one shot.

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Speaker 2: Well, there are interdependencies between Australia and New Zealand, but

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Speaker 2: to be honest, what's happening in China is more important

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Speaker 2: for Australia probably than anywhere else in the world. So

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Speaker 2: I mean, I'm sure they're interested, but it probably doesn't

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Speaker 2: mean a lot for what reserve banks going to do.

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Speaker 1: All right, I just slipped my own ask fear and

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Speaker 1: greed question in there. Thank you very much, Sean. We'll

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Speaker 1: be back in a moment with the rest of the

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Speaker 1: day's business news Sean. Immigration from Gaza has become the

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Speaker 1: hot political topic at the moment, with oppositionally at a

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Speaker 1: Peter Dutton calling for a blanket ban on arrivals from

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Speaker 1: the region based on national security concerns.

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Speaker 2: That call was pretty much immediately rejected by Prime Minister

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Speaker 2: Anthony Albersi. But it's a difficult issue for the government

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Speaker 2: to address. Home Affairs Minister Tony Burke played down the

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Speaker 2: coalition's concerns that any Palestinian refugee who harbored it sympathies

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Speaker 2: for hamas a listed terrorist organization, risks being granted a

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Speaker 2: visa to Australia. He said that Australia security agencies were

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Speaker 2: involved in the vetting process, which hadn't changed since the

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Speaker 2: Coalition was in office. Now the Department of Home Affairs

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Speaker 2: has rejected more than seventy one hundred visa applications from

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Speaker 2: Palestinian since October seven, according to The Australian. At the

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Speaker 2: same time, the department has granted two nine hundred and

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Speaker 2: ninety two visas to holders of a Palestinian authority travel document,

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Speaker 2: the vast majority receiving visitor visas. Around half of those

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Speaker 2: visas have actually resulted in a journey to Australia. Now,

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Speaker 2: more than nine thousand visas have been issued to Israeli

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Speaker 2: applicants since October seven, only two hundred and thirty five

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Speaker 2: applications have been refused.

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Speaker 1: AGL Energy share price so as much as five percent

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Speaker 1: yesterday before finishing up two percent after the group said

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Speaker 1: earnings in the current financial year are likely to hold

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Speaker 1: up better than forecast.

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Speaker 2: Underlying profit at the energy giant went from two hundred

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Speaker 2: and eighty one million dollars in twenty twenty three to

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Speaker 2: eight hundred and twelve million dollars last financial year. Now

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Speaker 2: that result is pretty good, though it was only slightly

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Speaker 2: ahead of expectations. It comes after the company had already

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Speaker 2: upgraded guidance twice in recent months. Agel also declared a

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Speaker 2: much higher dividend, and the higher profit was due to

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Speaker 2: improved performance at its power stations and higher electricity prices.

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Speaker 2: The company warned that twenty twenty four was a boom

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Speaker 2: year and unlikely to be repeated, at least in the

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Speaker 2: short term, though the fall and earnings won't be as

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Speaker 2: significant as previously expected. Through Group also announced two hundred

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Speaker 2: and fifty million dollars of battery and solar acquisitions, which

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Speaker 2: boosts Agel's pipeline for potential projects by eight point one

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Speaker 2: gigle what's of capacity. The most progressing of those projects

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Speaker 2: are in Queensland and New South Wales.

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Speaker 1: I mentioned this next one at the top of the show, Sean,

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Speaker 1: and it really is quite shocking. One in three children

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Speaker 1: are not performing at baseline numeracy and literacy standards, with

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Speaker 1: poor kids suffering much more than rich kids.

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Speaker 2: That's despite the state and territory government spending about forty

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Speaker 2: billion dollars on schools each year and the federal government

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Speaker 2: spending around twenty six billion dollars. Results from the twenty

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Speaker 2: twenty four National Assessment Program Literacy and Numeracy, much better

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Speaker 2: known as NAPLAN, shows that at a year nine level,

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Speaker 2: the percentage of wealthy children below the national standard for

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Speaker 2: reading is three point nine percent. For poor kids, it's

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Speaker 2: forty seven point seven percent. The trend occurs across all

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Speaker 2: school grades and across reading, writing, spelling, grammar and punctuation

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Speaker 2: and numeracy. The figures come in the thirteenth year after

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Speaker 2: businessman David Gonski recommended a needs based approach to education

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Speaker 2: funding thirteen US is relevant because anyone in kindergarten in

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Speaker 2: twenty twelve when that report came out is now in

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Speaker 2: their final year of schooling. The poor standards were widely

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Speaker 2: criticized across the country yesterday, and they come as the

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Speaker 2: federal and state governments ready themselves for a new funding

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Speaker 2: agreement later this year. Let's hope that they can make

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Speaker 2: some headway into that just atrocious statistic about poor kids v.

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Speaker 2: Rich kids.

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Speaker 1: Yeah, that is really quite extraordinary. Now, the corporate regulator

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Speaker 1: Sean has alleged that ASX Limited, the share market operator,

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Speaker 1: made misleading statement about how the overhaul of its clearing

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Speaker 1: and settlement system was progressing months before it revealed the

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Speaker 1: crucial upgrade was actually failing.

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Speaker 2: Now, remember the AX Limited, the company should be beyond

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Speaker 2: approach because it operates the market. It's the one that

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Speaker 2: goes out and says to companies, Hey, your share price

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Speaker 2: is moving around. What's going on? Have you been informing

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Speaker 2: the market correctly? Et cetera, et cetera. This lawsuit in

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Speaker 2: the federal court is the first litigation against ASX for

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Speaker 2: the botched upgrade of the post trading platform ax Face

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Speaker 2: is a maximum penalty more than five hundred million dollars.

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Speaker 2: According to report in the fin Review, the replacement of Chess,

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Speaker 2: as the clearing and settlement system is known by blockchain technology,

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Speaker 2: was eventually abandoned. Work started on the project in twenty fifteen,

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Speaker 2: and a more basic replacement is now likly in about

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Speaker 2: twenty twenty eight twenty twenty nine. That's how poorly it's gone.

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Speaker 2: ASEK has alleged the comments from ASEX in February twenty

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Speaker 2: twenty two that the Chess project remained on track for

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Speaker 2: go live in April twenty twenty three and was progressing

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Speaker 2: well were misleading. The company only revealed that the project

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Speaker 2: had unraveled in November twenty twenty two, seven months later.

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Speaker 2: AX chair Damien Roach, who has been in that role

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Speaker 2: since April twenty twenty one, and on the board for

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Speaker 2: a decade is pretty much in the firing line on

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Speaker 2: this one. Ax Limited share price fell nearly four percent yesterday.

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Speaker 1: John another big result yesterday Promedicus's share I surged more

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Speaker 1: than seven percent, even though the Medical Imaging Group said

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Speaker 1: it's going to be tough to keep up its current

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Speaker 1: growth rate.

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Speaker 2: Yeah, that's because its current growth rate is about thirty

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Speaker 2: seven percent or something other.

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Speaker 1: That may be a touch hard to sustain.

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Speaker 2: I love this company. It's been a share market star.

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Speaker 2: Its price is more than doubled over the past year.

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Speaker 2: It's now got a fifteen billion dollar market capitalization Top

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Speaker 2: forty company, bigger than Quantas, bigger than JB hi Fi,

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Speaker 2: bigger than Treasury Wine Estates. Though most people won't have

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Speaker 2: heard much about it, it basically worked out how to

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Speaker 2: stream medical images to workstations and mobile devices, meaning diagnostic

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Speaker 2: decisions can be done remotely, totally reinventing radiology. Pro Medical

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Speaker 2: is founder and CEO Sam Hoopert. He's been with the company.

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Speaker 2: We founded the company just over forty years ago, and

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Speaker 2: since the beginning of covid, its share price has gone

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Speaker 2: from about twenty bucks to more than one hundred and

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Speaker 2: forty dollars. Yesterday, mister Hoopert said he believes the company

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Speaker 2: can maintain this trajectory of strong profitable growth. Keeping up

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Speaker 2: these thirty seven percent growth rates might be a bit tough.

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Speaker 1: Just perhaps Seven Groups made a push into the industrial sector.

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Speaker 1: It's paying dividends, with the company reporting a twenty percent

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Speaker 1: jump in underlying earnings to one point four billion dollars

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Speaker 1: last financial year.

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Speaker 2: But the conglomerate, controlled by the billionaire Stakes family warn

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Speaker 2: profit growth is likely to tape back to high single

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Speaker 2: digits this year. According to chief executive Ryan Stokes, this

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Speaker 2: is a fascinating company nowadays. The West Track Caterpillar unit,

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Speaker 2: which sells and maintains heavy machinery for mining, contributed around

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Speaker 2: forty five percent of earnings. Profits from the building materials

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Speaker 2: group Borrel rose slightly, while earnings at industrial higher company

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Speaker 2: Coats jumped sharply, not doing so well as oil and

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Speaker 2: gas group Beach Energy, where earnings fell nine percent. But

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Speaker 2: I think the black sheep in the conglomerate is seven

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Speaker 2: West Media, where revenue fell five percent and earnings tumbled

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Speaker 2: almost sixty percent on weaker advertising sales. Seven Groups share

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Speaker 2: price jump seven percent event while seven West Media, which

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Speaker 2: is listed separately a majority owned by seven Group Holdings,

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Speaker 2: It was up three percent okay.

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Speaker 1: Turning to International News Now and Japanese Prime Minister Fumio

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Speaker 1: Kasheda yesterday announced he will not seek re election as

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Speaker 1: head of his party, meaning the end of his premiership

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Speaker 1: after just under three years.

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Speaker 2: The ruling Liberal Democratic Party has governed Japan almost uninterrupted

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Speaker 2: since nineteen to forty five and is due to hold

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Speaker 2: an internal leadership contest next month. According to AFP, its

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Speaker 2: popularity has sumped somewhat because of rising prices. There's also

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Speaker 2: been a bunch of scandals hitting the party as well

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Speaker 2: as the Prime minister, missed Ksheedah said it's important to

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Speaker 2: show people that the Liberal Democratic Party is changing. He

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Speaker 2: said the first step in doing that is for him

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Speaker 2: to step aside. The head of the ruling party is

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Speaker 2: traditionally also prime minister. Now, the sixty seven year old

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Speaker 2: mister Kisheda has been in office since October twenty one

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Speaker 2: and has seen his and his party's pole ratings slide

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Speaker 2: sharply in response to rising prices hitting Japanese incomes Sean.

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Speaker 1: We have never talked about pop tarts on fear and

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Speaker 1: greed alas we have not. Today is the day, yes,

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Speaker 1: because Mars, of course, the confectionery, food and pet care giant,

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Speaker 1: has reached an agreement to acquire Kelenova, which makes springles

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Speaker 1: and pop tarts, among other things, for more than twenty

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Speaker 1: nine billion US dollars.

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Speaker 2: Yep, one of the largest deals of the year. According

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Speaker 2: to a report on the Financial Times, the offer made

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Speaker 2: by the privately held Mars company, it's a significant premium

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Speaker 2: to where Keleanover's shares for training just a few months ago.

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Speaker 2: Now the price Mars is offering is unusually high for

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Speaker 2: the consumer sector, especially for a company making products that

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Speaker 2: have fallen out of favor with health conscious customers. Kellanova

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Speaker 2: itself is only a couple of years old. In fact,

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Speaker 2: I think it was created last year. It came out

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Speaker 2: of Kellogg and Kellogg decided to separate its breakfast, cereals

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Speaker 2: and stack businesses. So things like cheese at rice, crispy treats,

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Speaker 2: ego is that how you pronounce it? Ego, ego, ego, pringles,

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Speaker 2: pop tarts, They're all part of this Calenover business. Mars,

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Speaker 2: which is one of the world's largest female businesses. It's

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Speaker 2: got annual sales of fifty billion dollars, about one hundred

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Speaker 2: and fifty thousand employees. It wants to take over Kellan

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Speaker 2: over for about twenty nine billion dollars. Have you ever

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Speaker 2: had a pop tart? Michael?

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Speaker 1: Yes, yes, I have? Have you?

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Speaker 2: I have tried on? I had a bite discussed.

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Speaker 1: Only you lived in the US for a number of years,

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Speaker 1: you worked there for a long period of time. Surely

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Speaker 1: you would have been swimming in pop tarts and eggoes

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Speaker 1: and rice crispies and all of these kind of snacks

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Speaker 1: and treats.

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Speaker 2: Yeah, it's help swimming. Yeah, I don't know. I have

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Speaker 2: pop tarts. They're the ones with the gem in the middle,

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Speaker 2: aren't they.

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Speaker 1: Yeah, and a whole bunch of that's chocolate ones.

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Speaker 2: And yeah, don't you toast them like they used to

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Speaker 2: toast it as well?

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Speaker 1: Yep. You really don't know much about pop tarts, do you?

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Speaker 1: Or about egoes? I? Yeah, you're not a snack expert.

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Speaker 1: I realized that now over a long period of time.

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Speaker 1: You don't like hot chips. Now you don't like pop

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Speaker 1: tarts and egoes any You just don't like nice things,

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Speaker 1: do you.

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Speaker 2: I don't really eat meat much either.

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Speaker 1: What do you Eatt. I've never seen you.

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Speaker 2: Eat fading away.

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Speaker 1: This is ac This is a scandal. Sean is in

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Speaker 1: fact a vampire. Up next is the Fear and Greed

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Speaker 1: Daily Interview Commonwealth Bang Poss Matt Common as a guest today.

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Speaker 2: Yes, he's talking to ozbuz's David kosh All about the

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Speaker 2: results yesterday. It is a definite master list for all

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Speaker 2: our listeners out there.

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Speaker 1: Yeah sure is up next to the Fear and Greed

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Speaker 1: playlist on your podcast platform or at Fearangreed dot com

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Speaker 1: dot au and keep listening. At midday, keep an eye

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Speaker 1: on the playlist because there will pop up the bonus

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Speaker 1: episode of Ask Fear and Greed. Check out that one

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Speaker 1: as well. Thank you very much, Sean, Thank you, Michael.

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Speaker 1: It is Thursday, the fifteenth of August twenty twenty four.

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Speaker 1: Make sure you following the podcast and please join us

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Speaker 1: online on LinkedIn, Instagram, x TikTok and Facebook. Michael Thompson

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Speaker 1: and that was Beer and Greed. Have a great day.