Stocks under the Scanner: MQG, JHG, PDL, PPT, MGG

Summary

• Australian Financial sector has made a significant contribution to the overall economy and has given a negative return of ~22% in the last year.
• Central banks, big financial institutions, small to medium-sized regional banks, financial technology, and challenger banks have all experienced challenges during the pandemic.
• Initiatives have been taken by the players to ensure the safety of the staff and customers and strengthen the financial system.
• Macquarie Group delivered a negative return of 4.17% in the last year and an impressive 44.74% growth in the previous three months.
• Perpetual Limited completed Trillium acquisition and has plans to launch new Trillium ESG offerings in Australia in 1H FY2021.

The Australian ASX 200 index comprises of 11 sectors with the financial sector having the biggest share in it. According to the S&P Dow Jones Indices, the financial sector contributes 27.3% to the overall index (As on 30 June 2020). The breakdown is depicted in the below image:

When we see the performance of the financial sector, the sector has delivered -5.28% in the five years and -21.83% in last one year (as on 3 July 2020). On 3 July 2020, S&P/ASX 200 Financials (Sector) improved marginally by 0.09% and settled at 4,935.22.

An article published by KPMG states that banks are at the frontline of the economic disruption brought by COVID-19 pandemic. Central banks, big universal banks, small to medium-sized regional banks, financial technology and challenger banks have been experiencing challenges and risk. Several measures have been taken by them to aid their staff and customers and strengthen the financial system.

As per Daniel Knoll, Australian financial services are undergoing considerable change regarding innovation, technology and risk management.

Let us look at a few stocks from the financial sector that are under the scanner after being touted as the ‘best of the ASX lot’:

Macquarie Group Limited (ASX:MQG)

A diversified financial group, Macquarie Group Limited offers customers with solutions related to asset management, risk advisory, banking, equity, and commodities, among others.

Macquarie Group raises GBP 2.7 billion to fund UK infrastructure

On 24 June 2020, Macquarie Infrastructure Debt Investment Solutions announced that it had raised GBP 2.7 billion from corporate pension schemes, insurance companies, and local authority pension schemes to finance UK infrastructure.

Stock Performance:

Macquarie Group shares have delivered a return of 225.76% since its inception. In the last year, the shares have provided a negative 4.17% return. However, in the previous three months, the shares have given an impressive performance of 44.74%.

On 6 July 2020, MQG shares were trading at A$124.060 (at 1:29 PM AEST), up 1.672% from the previous close.

Janus Henderson Group Plc (ASX:JHG)

Janus Henderson is a top global active asset manager that helps its clients to achieve their long-term financial goals.

Chess Depositary Interest Update for June 2020:

On 3 July 2020, Janus Henderson updated on the status of the total number of CDIs quoted on ASX at the end of statement June 2020 was 35,700,288 which was 36,581,093 by the end of May 2020.

Further, the total number of securities at the end of June 2020 was 183,852,855. This number slipped by 623,190 as compared to the previous month. The reason for the change was the 2020 Accretive Share Buyback Programme.

Stock Performance:

JHG shares have delivered a return of 41.88% since its inception. In the last year, the shares have provided a return of 0.45% return. However, in the previous three months, the shares have given an impressive return of 33.62%.

On 6 July 2020, JHG shares were trading at A$30.660 (at 1:29 PM AEST), down 1.097% from the previous close.

Pendal Group Limited (ASX:PDL)

Pendal is an independent, global investment management company that aims at providing better investment yields to its customers via active management. Its fund managers are experienced and have the independence to decide with conviction, developed on a philosophy of meritocracy that encourages success from a variety of understandings and methodologies to investment.

Westpac’s Sell Down of 9.5% Stake in Pendal:

On 18 June 2020, Pendal Group announced the completion of Westpac’s sell-down of its remaining 9.5% stake in Pendal.

Despite the sell-down of 9.5% stake by Westpac Banking Corporation (ASX:WBC), Pendal has continued to build on the strong foundations of the business since 2007. Its balance sheet remains strong, with zero debt and positive cash flows.

Stock Performance:

Pendal Group shares have delivered a return of 133.05% since its inception. In the last year, the shares have provided a negative 15.01% return. However, in the previous three months, the shares have given an impressive return of 33.48%.

On 6 July 2020, MQG shares were trading at A$6.120 (at 1:29 PM AEST), up 0.99% from the previous close.

Perpetual Limited (ASX:PPT)

Perpetual Limited is a financial services group operating in funds management, financial advisory and trustee services.

Trillium’s Acquisition:

On 01 July 2020, Perpetual Limited announced the completion of the acquisition of specialist ESG investment firm Trillium Asset Management (Trillium). Trillium is based in Boston USA and has more than A$5.7 billion AUM and offer its client with equity, fixed income, and alternative investment strategies.

The acquisition is consistent with the company’s objective. To meet the increasing investor demand, the company is progressing with plans to launch new Trillium ESG offerings in Australia in 1H FY2021.

Stock Performance:

Perpetual Limited shares have delivered a return of 8.32% since its inception. In the last year, the shares have provided a negative 26.78% return. However, in the previous three months, the shares have given an impressive return of 30.53%.

On 6 July 2020, PPT shares were trading at A$32.200 (at 1:29 PM AEST), up 1.099% from the previous close.

Magellan Global Trust (ASX:MGG)

Magellan Global Trust offers investors with an opportunity to invest in a specialised and focused global equity fund that invests in the shares of those companies listed on stock exchanges around the world and aims to provide investors with a cash distribution yield of 4% per annum.

Distribution for Six-Month Period Ending 31 December 2020:

On 2 July 2020, Magellan Asset Management Limited announced that the Target Cash Distribution per unit of Magellan Global Trust for six months ending 31 December 2020 would be 3.58 cents. The calculation of the distribution is as per the distribution policy for the Trust highlighted in the Product Disclosure Statement dated 21 August 2017.

Stock Performance:

Magellan Global Trust shares have delivered a return of 18.63% since its inception. In the last year, the shares have provided a 0.55% return. However, in the previous three months, the shares have given an impressive return of 14.15%.

On 6 July 2020, MGG shares were trading at A$1.785 (at 1:29 PM AEST), down 1.653% from the previous close.