SYDNEY: Commonwealth Bank of Australia has shot past the world’s biggest miner BHP Group Ltd and is now the country’s most valuable company.

The lender’s market capitalisation hit a record high of A$229bil (US$149bil) in Sydney yesterday.

That leaves it comprising 9.6% of the benchmark S&P/ASX 200 Index of the nation’s leading firms, and slightly ahead of BHP’s weighting, which slipped below 9%.

The valuation gap has widened somewhat since the pair switched top spot on July 12.

The changing status highlights investor appetite for the Matt Comyn-led institution, that has become more beloved than the producer of earth’s most in-demand minerals.

Such a differential would have seemed unlikely as recently as 2021 when BHP scrapped a dual-listing structure and abandoned its London listing in favour of Sydney.

The valuation of Commonwealth Bank shares received scrutiny last month when veteran hedge fund manager Philip King said he had amassed a short position in the shares, citing one of the world’s most expensive valuations.

King, the chief investment officer at Regal Funds Management Pty, said at the time that he expects the lender’s earnings-per-share to decline in the coming years.

He cited amid mounting competition behind his short.

The nation’s banks have defied analysts who have widely expected a drop in earnings as a result of fierce mortgage competition.

Instead, they’ve been buoyed by higher borrowing costs and an absence of economic shocks thanks to an ultra-low unemployment rate.

Just one of the 13 banking analysts tracked by Bloomberg that cover Commonwealth Bank have a “hold” rating on the stock.

The rest have “underweight” or “sell” recommendations, the data showed.

 - Bloomberg