Resilient Investment and Lending Activities Supporting the Asset Management and Banking Sector

Sector Landscape and a Look into Residential Mortgage Asset Value

Flows in Managed Funds Industry

Favourable Prospects for Authorised Deposit-Taking Institutions

Index Performance

Key Risks and Challenges

Outlook

Investment theme and stocks under discussion (PNI, JDO, CBA)

After understanding the sector, let us now look at three companies listed on the ASX. The price potential of the companies under discussion has been analysed based on the ‘Price/Book Value’ multiple method.

1. ASX: PNI (Pinnacle Investment Management Group Limited)  

(Recommendation: Buy, Potential Upside: Low Double-Digit, Mcap: AUD 2.13bn)

PNI is involved in developing and operating investment management businesses.

2. ASX: JDO (Judo Capital Holdings Limited)  

(Recommendation: Buy, Potential Upside: Low Double-Digit, Mcap: AUD 1.40bn)

JDO is an Australian company with multiple banking products and services for small and medium-sized businesses in Australia.

3. ASX: CBA (Commonwealth Bank of Australia)  

(Recommendation: Hold, Potential Upside: Low Double-Digit, Mcap: AUD 171.85bn)

CBA provides banking, financial, and related services. The company provides retail and commercial banking services predominantly in New Zealand and Australia.

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 not a reliable indicator of future performance. 

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 11^th August 2022. 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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