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(Bloomberg) — Commonwealth Bank of Australia’s market value hit a fresh milestone, with the stock seemingly undeterred by recent geopolitical tensions that have rattled equity markets.
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Australia’s biggest stock rose as much as 2.3% on Tuesday to a record high of A$188.55, lifting its market cap to more than $200 billion, according to data compiled by Bloomberg. CBA is among the ten largest global lenders, surpassing Royal Bank of Canada’s market value of $179 billion.
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The stock has continued to gain even as the war between Israel and Iran sparked renewed selling in riskier assets. Commonwealth Bank, which makes up 12% of Australia’s stock benchmark, has benefited from the perception that the country’s assets offer defensiveness amid periods of volatility. On Tuesday, the stock climbed the most in about a month after US President Donald Trump announced a ceasefire in the Middle-East conflict.
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“The driving reason for this continued rally is that there are still offshore investors who want exposure to the Australian stock market,” said Tony Sycamore, a market analyst at IG Australia in Sydney. Investors looking to invest in the relative safety of the nation’s equities are heading toward CBA, he added.
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Still, analysts remain skeptical on the stock’s run of advances, with Commonwealth Bank having the weakest return potential among global lenders. It’s also one of the sector’s most expensive shares, trading at 30 times forward earnings, compared to JPMorgan Chase & Co.’s multiple of 15.
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