2302 GMT -- Australian banks look expensive compared with their global peers, which means that the recent domestic bank stock rally is likely overdone, Wilsons Advisory analysts say. They view valuation multiples as having risen significantly to the point that they are now stretched relative to historical norms. Current valuations are also disconnected from fundamentals, Wilsons says. As a result, it reduces its exposure to Australian banks, and cuts it stake in Westpac by 2%. "This takes us underweight the stock and even further underweight the sector." Wilsons reckons there is limited upside to lenders' forward earnings, even with the possibility of a soft landing and interest rate cuts in the next 12 to 18 months. ( alice.uribe@wsj.com)
2237 GMT -- Canadian stocks end higher, as the benchmark S&P/TSX Composite Index rises 0.2%, to 22,087.26, and the blue-chip S&P/TSX 60 Index increases 0.2%, to 1330.38. The S&P/TSX index saw gains across its energy, financial, industrials, utilities and battery metals sectors. Among the gainers of the day were Constellation Software and Fairfax Financial. ( sabela.ojea@wsj.com; @sabelaojeaguix)
1605 GMT -- Agricultural lending by U.S. farm banks grew 6.7% last year from 2022, to $110 billion, the American Bankers Association says in its latest Farm Bank Performance Report. The association says there was a 4.5% increase in outstanding loans secured by farmland, to $64.1 billion, adding that farmland values increased 7.4%. Agricultural production loans increased 10% to $45.9 billion, ABA says. In 2024, "the agricultural sector will continue to face challenges due to monetary policy actions targeting persistent inflation...as well as reduced federal support," ABA's Chief Economist Sayee Srinivasan says in a note. ( paulo.trevisani@wsj.com; @ptrevisani)
1002 GMT -- Direct Line is now on the comeback trail and dividends are back, AJ Bell Investment Director Russ Mould writes in a research note. The nonlife insurer has been through a challenging period due to rising inflation pushing up costs and unfavourable weather causing a surge in claims, which cost its position to the former CEO, Mould says. However, new CEO Adam Winslow is taking the right approach to drive performance and will put the company back on top, Mould says. "He's being open and honest that the company needs to do more to drive performance." Shares are up 0.95% at 213.50 pence. ( najat.kantouar@wsj.com)
0927 GMT -- Virgin Money UK received an unimproved final takeover offer from Nationwide Building Society Shore Capital, analyst Gary Greenwood writes in a market comment after the companies said they agreed on a GBP2.9 billion deal. At 220 pence per share, the transaction values the financial-services group lower than its last reported tangible net asset value per share of 337 pence, he notes. "By accepting such a low valuation multiple, we think the board of VMUK must have had little faith in its management team to execute on its strategic plan and ultimately deliver a double digit return on equity and so a higher rating," he says. Shares trade 2.4% higher at 212.7 pence. ( elena.vardon@wsj.com)
0911 GMT -- M&G's results were supported by higher rates and exceeded market expectations, RBC Capital Markets says in a note after the savings-and-investments business's 2023 print. The higher rate environment -- leading to increased returns and higher treasury income -- contributed to better-than-expected results, analyst Mandeep Jagpal writes. Operating capital generation also benefited from a one-off capital reduction in asset management, he adds. Despite strong capital generation, the dividend was broadly flat while the market expected around 2% growth, the analyst adds. Shares in London rise 3.6% to 240 pence, their highest price since mid-2021. ( elena.vardon@wsj.com)
(END) Dow Jones Newswires
March 22, 2024 09:16 ET (13:16 GMT)
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