Up 38% in a year, why the CBA share price outpaced the benchmark again in January

CBA shares delivered another month of strong returns in January. But how?

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The Commonwealth Bank of Australia (ASX: CBA) share price again defied a host of bearish analysts' sell recommendations to charge higher in January.

Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed out December trading for $153.25. When the closing bell rang on 31 January, those same shares were changing hands for $160.56.

This saw the CBA share price up 4.8% for the month, once more outpacing the 4.6% gains posted by the ASX 200.

In the longer term, and despite today's retrace, CommBank stock is up 38% over 12 months. CBA shares also trade on a fully franked dividend yield of 2.9%.

Here's what's been happening with the big four banks.

A young bank customer wearing a yellow jumper smiles as she checks her bank balance on her phone.

Image source: Getty Images

How does the CBA share price keep charging higher?

There was no fresh price-sensitive news released by the ASX 200 bank stock in January.

So, why did the CBA share price march higher over the month?

Well, one strong tailwind looks to be blowing in from Australia's trillion-dollar superannuation sector. Superfunds are often rated by their comparative performance to major benchmarks, like the ASX 200.

As the Motley Fool's Sebastian Bowen reported on 10 January, CBA's index-dominating market cap may have made it too big for the super funds to lower their holdings.

According to the strategists at JPMorgan, while "Australian equity managers dumped the big four banks because they were too expensive to own, super fund investment teams worked against them by stepping in as buyers".

The CBA share price also looks to have received a boost later in the month after the bank reported it had entered into a binding sale agreement to sell its remaining 5.45% shareholding in the Chinese regional commercial bank, Bank of Hangzhou (HZB).

CBA said it expected total gross proceeds of around $940 million for the sale of its holdings to New China Life Insurance.

Commenting on the divestment, CBA CEO Matt Comyn said:

CBA has been a longstanding shareholder of HZB since its original investment in 2005, and we are pleased to have contributed to the development of HZB into a significant player in retail, wealth management and commercial banking across the Yangtze Delta region.

As for today, the CBA share price is down 1.1% at $158.79 a share on this first trading day of February.

The ASX 200 bank stock has been unable to avoid the broader market sell-down on Monday, which sees the benchmark index down 1.8%. Investor jitters look to be driven by US President Donald Trump's major tariffs on imports from Mexico, Canada and China, announced over the weekend.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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