The S&P/ASX 200 Index (ASX: XJO) didn't have a great month in April. Last month saw the flagship index go backwards by about 0.86%, not including the nasty falls we have seen today. But it was an even bleaker month for the Commonwealth Bank of Australia (ASX: CBA) share price. April saw CBA shares fall from $105.77 a share to $103.88, a fall of 1.8% or so, more than twice the fall of the ASX 200.
But what might stick even deeper in CBA investors' craw is that CBA was the worst-performing ASX 200 big four bank share. CBA investors have long enjoyed the bank's reputation as the best performing ASX bank share. But that was certainly not the case last month.
Take the National Australia Bank Ltd (ASX: NAB) share price. NAB shares ended April in the green with a rise of 0.87%. Westpac Banking Corp (ASX: WBC) shares didn't do quite as well as that, but fell less than CBA did. It was a similar story with Australia and New Zealand Banking Group Ltd (ASX: ANZ).
So after a period of topping out the ASX bank sector, what went wrong with CBA shares last month?
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Why was the CBA share price sold in April?
One possible explanation for this scenario comes from reporting in the Australian Financial Review (AFR) today. The report quoted analysis from investment bank and broker JP Morgan. JP Morgan noted that NAB is currently the "only big four bank stock that domestic fund managers have a 'well held' position in". This, the broker suggests, might mean that "investors have less conviction in the other three majors, which rank as 'underheld'".
"This cooling on the banks follows a period of particularly strong performance, with the sector outperforming the ASX 200 and MSCI World Banks in the year-to-date," the report quotes JP Morgan's Jason Steed.
But many ASX brokers have been warning about possible falls in the value of the CBA share price for a while now. Just this week, broker Morgans has retained a 'reduce' rating on CBA shares. That came with a 12-month share price target of just $77. Part of Morgans' pessimism on CBA shares is the view that they are overvalued at current levels.
So if the various commentary on CBA is to be believed, perhaps the bank might have a few more months of disappointing performance in front of it yet. But we shall have to wait and see what happens.
At the current CBA share price, this ASX 200 bank share has a market capitalisation of $175.33 billion. That comes with a dividend yield of 3.65%.
