Offshore investors are piling into Australian banks, once again.
That's the call from Macquarie analysts on Thursday morning, who reckon offshore investors increased their positions in each of Australia's big four banks in the December quarter, and were particularly active buying ANZ Banking Group shares.
"Our trading analysis suggests that recent bank sector outperformance was largely underpinned by offshore investor buying," the analysts told clients.
"While this was arguably justifiable given an improving operating environment and valuation support, we continue to see a relatively benign earnings growth environment across the sector with limited upside risk."
The buying came as short interest across the big four banks also dropped in the December quarter.
Macquarie analysts said shorts in the big four were worth $5.4 billion or 1.1 per cent of shares on issue.
Interestingly, the analysts said retail investors were net sellers of the banks in the fourth quarter.
"Retail investors appeared to maintain their fairly consistent strategy of buying the dip and selling the rally," the analysts said.
