@Mujo the whole justification of CBA's price performance based on ETF flows is just group BS that market commentators who have no idea why it's going up have gravitated to. It makes no sense that CBA would outperform the rest of the ASX200 if ETF flow were the reasons, because it would get flows proportional to it's size, ie would have the same price pressure as all other stocks in the index.

There may be some credibility if the ETF flows are into ASX50 or ASX20 ETF's where CBA is an even bigger portion, but to your point they include the likes of CSL which is down a lot. Also no one has explained why the ETF flows are any different over the last 12 months that CBA has shot up compared to the last 20+ years we have had compulsory super and ETF's have been around.

Large overseas investors using CBA as a liquid dumping ground to avoid US geopolitical issues has probably the best case. That and having a very high retail base which don't sell, meaning that it's not as liquid as it's size implies, so inflows are going to push the price higher. Again, if that is the case why is CSL underperforming share price wise relatively, it's got better growth prospects, but is heavily exposed to the US economy - so that may be why overseas investor are choosing CBA rather than CSL (or miners who also have overseas exposure).

Gravity will prevail eventually - in the meantime the talking heads will come up with all sorts of BS to justify it, but dare not talk it down for fear of putting off their clients who this CBA is without equal.

At Tom73 , maybe not so fast Kemosabe. 

It is possible CBA is being uniquely impacted by the current popularity ETFs. The price of any article or share is a function of supply and demand. As we know for a particular ETF and a particular index ETFs are forced buyers.

However, what if the ownership of CBA shares is skewed in a way there are few sellers at a given price point?  This could be the case for current CBA shareholders. Many will have been bought at the price of $5.40 in the first government sell off in 1991 and subsequent $9.35 price paid several years later or similarly low prices.

The Commonwealth Bank definitely had/has a place in the Australian psyche like few other companies.  CBA shares were so popular with the public at the time of the first IPO they had to be rationed.  Also once bought, CBA shares tended to keep going up, so there was also capital gains taxation reasons why people were reluctant to sell. The result has been many have been passed down to children and grandchildren, and these shareholders now have a an even bigger Capital Gains Tax problem.  And still those twice a year fully franked dividends keep coming for the fortunate owners, another reason not to sell.

 Much the same might be said for CSL shares. However when floated by the Australian government in 1994, they were never as widely held by the public as CBA shares. The market cap of CBA being 13 times as large as CSL at the time.  I think it is possible there is something unique happening with the CBA share price in relation to ETFs.  

OK, so leaving aside Bank ETFs and Healthcare ETFs and just looking at broad ETFs @Scoonie Are you suggesting that there could be similar ETF demand for both CBA and CSL but that there is more supply at lower price points with CSL and less supply for CBA hence the buying causing more of a share price rise with CBA than it does with CSL? That does make sense. Interesting.

@Scoonie , spot on I reckon mate, I know people who will never (ever) sell their CBA shares. If you got $100,000 worth of CBA shares back at $5.41, this year alone you would have got almost $88,000 dollars in dividends before franking credits (not to mention their current value of almost $3.4 million - I wouldn't want to pay the CGT on that even with a 50% discount). So yeah, ETF's need to buy them and with limited CBA available the shares that do trade go at a premium. I'd love to know what proportion of CBA never change hands.

@Scoonie im happy to sell you mine at a discount if you pay the CGT as well. ;)

i think we went through this discussion about 6 months ago, maybe we will in another 6 months lol

Yes @Scoonie, I acknowledge that there is lower liquidity in CBA relative to size compared to other top ASX index companies for exactly the point you explain so well - diamond hand retail investors in the company.

BUT

That has been the case for 20+ years and while super fund flows have steadily increased year on year, it hasn't changed that dramatically to justify the below price chart for CBA over the last year and a half:

What has changed in the last year and a half?

Commentators blaming ETF's just doesn't carry water from my point of view (What The Franking).

Please convince me otherwise.

:)

I did a quick look at the annual turnover of the top few stocks. Personally, I think there's a lot of just following the crowd here tied in with HODL. Long term ownership from those who are basically asking 'where else can I put my money?'. It's TINA to the core...

Interesting article - Did you know BHP rallies often trigger CBA selloffs? - Kerry Sun | Livewire

The CBA-to-BHP share price ratio now sits at levels not seen since 2016, and before that, 1999.