Today on 11 March 2019, Pendal Group witnessed bulk trading on the Australian Securities Exchange recording the daily volume change of 8.15 million shares. The stock opened the day at $8.86 but fell straight to $8.61 in some early hours of the trading continuing to the previous slump.
However, there has been significant optimism in the mid-day trading that led the stock to recover and trade as high as $8.815 on 11 March 2019. But still, the stock closed in red, down 1.242% to last trade at $8.750 on Monday.
The performance of ASX-listed investment company Pendal Group Limited (ASX: PDL) has been highly appreciated by the investors as the stock price surged up by 12.58% in the last three months. It reflects the optimism driven by the company’s decision to acquire the 50% stake in Regnan to bring its ownership to 100%.
Governance Research & Engagement Pty Ltd, commonly known as Regnan, was jointly held by founders Pendal Group and Commonwealth Superannuation Corporation (CSC). In the first week of February, the asset manager stated that now it has increased its stakes in Regnan to 100 percent and consequently, the co-founder Commonwealth Superannuation Corporation will cease to be the shareholder in Regnan.
That means now Regnan will be solely owned and operated by Pendal Group, strengthening the Group’s objective to deliver fully-embed ESG Research which is a field of specialisation of Regnan. Pendal manages circa $2 billion in dedicated ethical and sustainable strategies on behalf of its clients. Whereas, the Regnan is focused on providing the independent advisory and engagement services especially in environmental and social issues.
Richard Brandweiner, CEO of Pendal Australia stated that Pendal’s unique value proposition is to deliver evidence-based, multi-asset ESG research with a continued focus on stewardship. It further supports the Group’s core objective to achieve sustainable, risk-adjusted out-performance for its clients.
Driven by the temporary adverse conditions in the global financial market, Pendal Group’s Funds Under Management (FUM) declined to $92.8 billion for the quarter ended 31 December 2018, compared to $101.6 billion as at the end of the September 2018 quarter.
Pendal’s wholly owned subsidiary, J O Hambro Capital Management (JOHCM) experienced net outflows of -$0.4bn during the quarter with redemptions in European and Asian OEIC funds being offset by inflows into the UK and global OEIC funds. The effect of the net flows during the December quarter on Pendal Group revenue was a decrease to annualised fee income of $3.2 million.
For the year ended 31 December 2018, JOHCM earned approximately $4.4 million performance fees, more than 10 times lower than the previous corresponding period’s performance revenue of $47.5 million. This performance fees contributed approximately $1.9 million to Pendal Group’s cash net profit after tax for the current financial year ending 30 September 2019, down from the previous contribution of $17.8 million in the Fiscal Year ended 30 September 2018.
Looking to the long-run performance of PDL, it can be seen that the stock price has gone up by 34.65% over the last five years despite the plunge of 17.66% recorded in the last 12 months to date, i.e., 11 March 2019.
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