The National Australia Bank led the major banks and financial stocks generally to a massive rise yesterday.
The gains almost dragged the ASX 200 into the green by the close (at one stage the market was positive) but the momentum faded late and the index ended with a small loss of just five points.
The strong performance yesterday by the NAB and other big banks saw financial sub-index of the ASX jump 5.27% – its best day since March 30 – which also took the rise so far this week to more than 10%. The sector was up by 7.1% at one stage.
The NAB continued the surge from Monday and Tuesday with the news that it had more than doubled the size of its capital raising for retail shareholders to $1.25 billion, citing strong demand for from small investors.
NAB said it had decided to increase the size of its share purchase plan from its original target of $500 million to $1.25 billion, further bolstering its balance sheet after a $3 billion institutional placement last month.
National Australia Bank shares jumped 7.81% to $17.94 which means every shareholder who participated in the issue and hasn’t sold the shares are looking at a paper profit of nearly $3.80 a share.
The upsurge in confidence saw ANZ shares jump 8.6% to an 11-week high of $17.94. It touched a high of $18.31.
Westpac climbed 8.04% to $17.61 and Commonwealth Bank shares rose a more modest 4.88% to $64.30 (it had been stronger earlier in the month as the ANZ, Westpac and the NAB were battered by uncertainty in the wake of their interim results.
Just over $2 billion worth of shares in the big four banks were traded on Wednesday with a combined volume of about 30 million shares traded for each of ANZ, NAB and Westpac, and 11 million Commonwealth Bank shares.