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(Bloomberg) -- Macquarie Group Ltd. shares lost the most in more than five months as dealmaking in Australia appeared slow to gather pace unlike the activity surge in the US. Most Read from Bloomberg Harris Just Showed Why Trump Is So Afraid of Her I Changed My Mind. The Fed Needs to Cut Rates Now. Stocks Tumble as Wall Street Gets AI Wake-Up Call: Markets Wrap What Initial Polling Data Show About the Trump-Harris Matchup $1 Trillion Rout Hits Nasdaq 100 Over AI Jitters in Worst Day Since 2022 Shares in the Sydney-based investment bank and asset manager dropped as much as 4.2% on Thursday, the most since Feb.
13, as it fell short of investor expectations regarding asset sales by its investing arm and transaction advisory. “The US is turning around faster than Australia in terms of activity levels in the capital markets,” Macquarie Chief Executive Officer Shemara Wikramanayake said on a call with media alongside its annual meeting on Thursday. “In Australia clients are still looking at things and there is a lot of dry powder in private funds but we haven’t seen the activity levels pick up yet,” Wikramanayake said. She added the bank’s advisory arm was predicting transaction activity “to be up significantly on a challenging year last year, but at this stage the world is mostly seeing that in the US market.” The CEO has struck a more positive tone on the outlook for dealmaking in recent months, saying confidence is returning as the path for global interest rates becomes clearer. Still, while the firm’s stock is up about 10% over the past 12 months, that’s lagging behind a gauge of global banks and for some investors, the comments weren’t reassurance enough.
“We think the update reads worse than the market expected,” wrote UBS Group AG analyst John Storey, who placed a valuation on the bank that was 4% below Thursday’s opening price. Storey also noted that fees from the bank’s investing arm Macquarie Asset Management were not promising. Macquarie’s guidance comes amid buoyant commentary from its Wall Street counterparts. Large US banks posted better-than-expected results earlier in July, driven in part by the gains from equity trading. The bank also said that profit would be supported by an uptick in its commodities business from increased trading activity in North American gas and power.
It told investors that performance in the first quarter was consistent with expectations and was broadly in line with a year ago. “Continued strong client demand across fixed income, currency and commodities should offset continued weak deal flow in Macquarie Capital,” wrote Bloomberg Intelligence’s Matt Ingram in a note to clients. Story continues (Updates headline and throughout with investor reaction) Most Read from Bloomberg Businessweek The Miseducation of America’s Nurse Practitioners The $12,000 Harvard Class Celebrities Are Fighting to Get Into Elon Musk Goes All In for Trump The US Economy Is Slowing, Which Is Just Fine With the Fed The Real Reason Erewhon Is a Cult Brand ©2024 Bloomberg L.P. View comments
Macquarie Shares Fall With Investors Let Down by Slow Dealmaking
July 25, 2024 04:29 PM AEST | By EODHD
