CBA shares reach $100 milestone

Commonwealth Bank shares have traded for $100 for the first time since the bank joined the market in 1991.

The shares changed hands for the triple-digit amount in the first hour of trade on Wednesday after opening at $99.25.

They soon set a new high of $100.30.  

CBA is the biggest player on the market and has a market value of about $177 billion.

The shares traded, for the most part, at little more than $60 each during 2020.

However, Australia’s strong economic recovery from the coronavirus pandemic has investors punting on the CBA to benefit from better times ahead.

Those who bought shares in the first-tranche initial public offer in 1991 will be particularly pleased with the momentum.

The bank offered shares for $5.40 each. The minimum investment was $2,160.

Employees had a better offer. They could buy shares for $4.86 each and only needed a minimum investment of $486.

The Commonwealth this month posted a jump in earnings for its third quarter.

Strong takeup of home loans and increases in business lending helped, while the bank set less money aside for bad debts.

IG Markets analyst Kyle Rodda said banks such as the Commonwealth were at the centre of the economic recovery.

“We’re seeing an upswing in economic activity and credit growth, which is good for banks,” he said.

Mr Rodda said global interest rates were at record lows last year but were moving higher in the long term, which would also help.

If the share prices gains can be entrenched, the CBA will join a select group of stocks trading at more than $100.

These are biotech CSL ($290.88), hearing implant provider Cochlear ($225.69), property advertising firm REA Group ($162.41), investment group Macquarie ($152.51), accounting software vendor Xero ($129.80), miner Rio Tinto ($119.45) and Dominos Pizza ($113.75).

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