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The Aussie bank bubble, which boils down to a CBA bubble, has been noticed by short-sellers:
Veteran hedge fund manager Philip King has taken a short position in shares of Commonwealth Bank of Australia, citing one of the world’s most expensive valuations.
With a forward price-earnings multiple of 22 times, CBA is the priciest bank on the MSCI World Bank Index and compares with 11.7 at JPMorgan Chase & Co. King, the chief investment officer at Regal Funds Management Pty, said he expects CBA’s earnings-per-share to decline in coming years.
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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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