BHP and Woodside move higher, as the big banks digest recent gains

BHP Woodside Petroleum National Australia Bank Commonwealth WPL NAB CBA ASX March 2022
Australia’s mining and oil giants have come out higher than the ASX 200 this week as commodity prices surge.

Earlier this week, BHP Group (ASX: BHP) along with Exxon Mobil Corp, announced they will pursue a gas output-boosting project from their Gippsland Basin Kipper field off southeast Australia, aiming to address an impending gas shortage in the local market.

BHP shares closed the week trading at $49.77, up 7.12%.

Woodside Petroleum

Rising energy prices have helped Woodside Petroleum (ASX: WPL) clock 47.29% gains since the beginning of the year, while its shares finished the week trading at $33.59, gaining 8.99%.

As investors continue to chase oil and gas stocks, Woodside chief executive officer Meg O’Neill told an energy conference audience that “rushing the energy transition would be detrimental to global energy security”.

She reiterated that the transition to zero emission fuel sources will take time while noting that liquefied natural gas (LNG) producers have made substantial progress in reducing carbon footprint.

Meanwhile Woodside shareholders, within months, are expected to vote on a stock-based $41 billion merger deal with BHP Petroleum, which will create a top 10 independent energy company and the largest ASX-listed energy firm.

National Australia Bank

Following its new buyback offer declared during the week, Australia’s second largest lender National Australia Bank (ASX: NAB) recovered from its mid-week losses and closed out Friday at $31.66, up 1.47%.

NAB announced on Thursday a $2.5 billion on-market share buyback, following the completion of a similar repurchase program. The new buyback is expected to reduce the bank’s common equity tier one capital ratio by about 58 basis points towards its targeted range of 10.75% to 11.25% over time.

Melbourne-based NAB will start the fresh buyback program after its half-year results slated for 5 May.

Commonwealth Bank

Australia’s largest mortgage lender Commonwealth Bank’s (ASX: CBA) shares fell 0.35% over the week as it lifted its fixed rate and lowered its variable rate.

On Friday, the bank raised its fixed rate by as much as 30 basis points while lowering its variable interest rates by 10 basis points, which experts also believe is in anticipation of the Reserve Bank of Australia (RBA) raising cash rates earlier than expected in August.

Commonwealth Bank shares closed trading at $105.92 on Friday.

Earlier this week, Commonwealth Bank head of Australian economics Gareth Aird said that if financial markets are right and the RBA is set to raise interest rates to around 2.5% over the next 15 months, it shall push the cost of servicing a home loan to record levels.

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