A: Thanks for the question.

I don’t think there is anything particular happening in Westpac shares, except that the market has been narrowing the differentials between the “expensive” banks (CBA and Westpac) compared to the “cheap banks” (ANZ and NAB). Arguably, the strategies of the banks are almost now identical, earnings outlooks about the same, and capital strength about the same.

As a result, the multiples have come right in. Westpac is trading at a multiple of 12.3 times forecast FY17 earnings, compared to ANZ at 11.2 times, and NAB at 11.3 times. CBA, which has a different financial year, is trading at a multiple of 12.9 times forecast FY 18 earnings. These differences are, compared to where they were 18 months ago, very small.

So, just rotation. If anything, it looks like over the last few days the market has started to say that Westpac and CBA, on relative terms, are starting to look better value.