These popular banking and mining stocks for Australia have been the darling of stock punters for their generous dividends and steady and stable rising stock prices over a period of time in the Australian stock market. But the scenario has changed for some of these with the current times and circumstances.
The miners while some of them have been lack lustre, some have been spiking the charts like a hungry shark in the waters. The banks have been on struggle streets recently, but do they look cheap because of that price drop?
The Gold miners that has been a bit lacklustre for some time has suddenly picked up pace due to the covid depression and underlying signs of a stock market depression to come yet in the future. However, the iron ore miners have been doing great thanks to stronger resurgence in manufacturing after Covid struck china lull in industrial production for a while and the contributing woes and troubles of one of the biggest iron ore miners (vale) on the other side of the continent.
We have tracked 10 stocks from the Australian stock market with a mix of mining companies and banks to see how they have performed in the last 11 months. They include the top banking stocks and some top miners including iron ore and gold miners.
Below is a video showing the price rise and drops in AUD of mining and banking stocks from the last 11 months from Sep 2019 to August 2020.
The video shows opening market prices on a monthly basis for the below mentioned stocks
Banking Stocks Australia
• Westpac banking (WBC.ASX)
• National Australia Bank (NAB.ASX)
• Commonwealth Bank (CBA.ASX)
• Australia and New Zealand Bank (ANZ.ASX)
• Suncorp Bank (SUN.ASX)
Mining Stocks Australia
• Rio Tinto (RIO.ASX)
• Broken Hill Propriety Company Ltd (BHP.ASX)
• Fortescue Metals Group (FMG.ASX)
• Newcrest Mining Company (NCM.ASX)
• Northern Star Resources (NST.ASX)
Watching the video, there is no doubt that FMG is the biggest mover in relation to price movement in the last 11 months. It starts at $7.81 in Sep 2019 and ends at a price of $17.50 in august 2020. If you had invested $3000 over this period, you would roughly be making about $3,700 in returns on this investment that is more than 100 % returns on investment whichever way you want to see it.
Miners stock prices have surged mainly due to price rise not only for iron ore but also a push up in record gold prices after it crossed the $1800 mark. Rising iron ore prices coupled with continued growth in iron ore exports to china and record gold prices due to stock market uncertainty and COVID still creating havoc in countries have boosted the mining sector this last couple of months.
You can notice that most of the banking stocks in this video has dropped by quite a bit during this time period and this chart just shows what has happened to the banks in the last 12 months. Bank stocks have taken a beating due to them having huge impairment and remediation costs due to the royal banking commission (Hayne Royal Commission), having to defer home loan repayments and small business loans due to COVID and them having to cap their dividends
APRA had warned major banks to scrap planned dividend payments to shareholders over fears the payments would impact the financial institutions’ capital and free cash flow position. Since this was announced the restrictions have now been eased.
Who are you going to place you punt on? Let us know in comments 😊