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Australia Market Wrap www.asx.com.au

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Rate cut rewards high dividend paying ASX financial stocks

In an intriguing turn of events, the Reserve Bank of Australia’s decision to drop the official cash rate to 3.75% today has not had a negative impact on financial stocks, with a number of high dividend paying companies receiving a boost.

The RBA surpassed expectations today, cutting rates by 50 basis points, rather than the predicted 25 points.

This might be due to investors looking to increase yields by moving from cash to fully franked dividend paying companies.

For the dividend hunters, there are some high relative yields in the market at present.

Suncorp Group (ASX: SUN), with a dividend yield of 4.82%, was one of the best performers of the day, its shares closing 1.84% higher after a dip in early trade.

This was followed by the Commonwealth Bank of Australia (ASX: CBA), with a dividend yield of 6.16%, which came back from a weak start to rise 1.69% at close of business.

AMP (ASX: AMP) closed 1.64% higher, sporting a dividend yield of 6.67%, while Perpetual (ASX: PPT) was up 1.06% with a dividend yield of 5.43%.

Sliding into positive territory were big four banks Westpac Banking Corporation (ASX: WBC) (6.82% dividend), up 0.44%, and ANZ Banking Group (ASX: ANZ) (5.84% dividend), up 0.34%.

Bendigo and Adelaide Bank (ASX: BEN) held its ground, finishing flat after a dip in early trade. Bendigo offers a dividend yield of 7.97%.

The only companies to go against trend today were National Australia Bank (ASX: NAB) (6.82% dividend), down 0.08%, and Bank of Queensland (ASX: BOQ) (7.32% dividend), down 2.68%.



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