What: The share price of leading blue-chip Wesfarmers Ltd (ASX: WES) closed 0.65% higher yesterday, narrowly beating the gain in the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) which added 0.6%. Wesfarmers' stock is now just 1.5% away from its six-year high having rallied 5% in the past month alone.
So what: The conglomerate's share price gains come in the wake of a report in the Australian Financial Review that Wesfarmers' supermarket division Coles is in discussions about joining the Financial Services Council. This latest news comes just days after Coles formed a joint venture with financial services giant GE Capital and would appear to reinforce speculation surrounding the group's ambitions to further expand its financial services capabilities beyond its current offering of insurance and credit cards.
Now what: Moves by Coles will almost certainly be closely monitored by its rival Woolworths Limited (ASX: WOW), however it is really the established financial services players such as AMP Limited (ASX: AMP) and the banks, which should be watching as they would likely be the major losers should Coles make a concerted effort to enter the financial services sector.