Q: What would be a good entry point for CM and when will mortgages rollover and how might that affect the price point?
5i Research Answer:
CM is now less than 8X earnings and its valuation already reflects a lot of concern about the housing market. We would be quite comfortable buying at $52 which is possible if the market weakens a bit. Over the next year, many mortgages will renew, but at the same time interest rates are likely to 'peak'. So there may be an earnings impact but this could be offset by an improved sentiment. Timing this of course perfectly is essentially impossible, and we would decide on a long term investment rather than basing a decision on what may happen.