Credit Suisse upgrades forecasts by 1-2% for FY19-21 to reflect the better activity trends in the March quarter. Upgrades are driven by stronger than expected derivatives activity. Meanwhile, corporate actions were down -40% with only $7bn in equity being raised.
Credit Suisse suggests narrowing BBSW spreads and cash rate reductions could create some headwinds going forward.
The -25 basis points drop in the BBSW spread to the cash rate over the past month could negatively affect earnings by -3% from FY20. A -50 basis points reduction in the cash rate would impact earnings by -1%.
Underperform rating and $60 target maintained.
Sector: Diversified Financials.
Target price is $60.00.Current Price is $71.65. Difference: ($11.65) – (brackets indicate current price is over target). If ASX meets the Credit Suisse target it will return approximately -19% (excluding dividends, fees and charges – negative figures indicate an expected loss).
