What Macquarie Group Investors Need to Know?

  • Nov 16, 2018 AEDT
  • Team Kalkine
What Macquarie Group Investors Need to Know?

There is something that could cheer up the investors in the Macquarie Group Limited (ASX: MQG). The company has informed the market players that the company is expected to report net profit amounting to $2.9 billion in FY 2019. This positive news comes after the regulator has decided to approve the unloading of one of the joint venture assets of Macquarie Group to Santos. Earlier, the Macquarie group had made an announcement that the company has been focusing to work towards achieving 10% rise in the net profits for FY 2019 and also stated that it is when the sale proceeds are not considered. However, the Australian Competition and Consumer Commission stated that it would not be becoming a hurdle for sale of the Quadrant Energy. The recent upgrade is beneficial for the company as might attract the attention of the market participants.

Macquarie Group Limited has also issued a press release on November 16, 2018 which stated that the company is holding 21.8% in Quadrant Energy and that the proceeds from this unloading are expected to be received during FY 2019. The other owners in the Quadrant Energy consist of Brookfield Asset Management.

In the press release, the company had also highlighted the factors to which its short-term outlook would be sensitive to. These factors include market conditions, foreign exchange impact, geographic composition of the income, regulatory changes as well as period end reviews’ conduct and transactions’ completion rate. The market participants are of the view that the latest upgrade was helped by the approval of the Quadrant sale. According to them, this sale represents how Macquarie’s pipeline which consists of the proprietary businesses could further improve the company’s performance and stated that unloading Pexa might help also help the company. Even though, there was nothing new about the unloading of the Quadrant Energy to the Santos, it does throw some light on the bank’s ongoing strategy.

Macquarie Group would be experiencing new chief executive officer or CEO named Shemara Wikramanayake on November 30, 2018 from the present CEO named Nicholas Moore. According to the market trackers, the incoming chief executive poses some risks with respect to staff retention. However, as far as business is concerned, it appears strong. Recently, Macquarie Group came out with the results for 1H 2019, i.e. ended on September 30, 2018. The company managed to generate net operating income amounting to $5.8 billion in 1H 2019 which reflects the YoY increase of 8%. However, in 1H 2019, the company generated net interest income or NII amounting to $998 million which implies the decline of 1% on the YoY basis.

At the time of writing, the stock price of Macquarie Group Limited was trading at A$119.120 per share which reflects that the stock price has witnessed the rise of A$0.310 per share or 0.261%. The company is having the market capitalization amounting to $40.44 billion, and its annual dividend yield stood at 4.5%. The stock price of the company is presently trading towards the higher range.


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