Loan Growth Data Likely to Benefit Financial Services Space

Company Overview

Gowing Bros. Limited (ASX: GOW) is engaged in investment and wealth management. It maintains and manages a diverse portfolio of assets, which includes long-term equity, property investments, managed private equity, property development projects, and cash. Bendigo and Adelaide Bank Limited (ASX: BEN) BEN provides banking and financial services in Australia. Its broad spectrum of services encompasses deposit-taking, payment services, wealth management, superannuation, treasury, and foreign exchange services. The Kalkine’s Sector Report covers the Investment Summary, Sector Overview & Supporting Catalysts, Data Insights and analysis, Financial Metrics, Financial Commentary, Risks, Outlook, and Technical Analysis along with the Valuation, Target Price, and Recommendation on selected stocks.

Investment Summary

Sector Overview and Supporting Catalysts

Data Insights and Analysis

Index Performance

Key Drivers versus Key Constraints

Investment theme and stocks under discussion (GOW, BEN)

After understanding the sector, let us now look at two companies from the Financial Services sector listed on the ASX. The price potential of the companies under discussion has been analysed based on the Price/Book valuation multiple methods.

1. ASX: GOW (Gowing Bros. Ltd.)

(Recommendation: Speculative Buy, Potential Upside Low Double-Digit, Mcap: AUD 117.17mn)

GOW is engaged in investment and wealth management. The company maintains and manages a diverse portfolio of assets, which includes long-term equity, property investments, managed private equity, property development projects, and cash.

Insights & Outlook

2. ASX: BEN (Bendigo and Adelaide Bank Limited)

(Recommendation: Hold, Potential Upside: Low Double-Digit, Mcap: AUD 5.31bn)

BEN provides banking and financial services in Australia. Its broad spectrum of services encompasses deposit-taking, payment services, wealth management, superannuation, treasury, and foreign exchange services.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 14 December 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual’s appetite for upside potential, risks, holding duration, and any previous holdings. An ‘Exit’ from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Disclaimer

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