Macquarie in the doldrums
Macquarie Group, Australia’s top investment bank, yesterday forecast a disappointing second-half profit and gave an outlook that raised worries about its key equity business, sending its shares sliding seven per cent.
Macquarie warned in its trading update that some market conditions were weakening, creating concerns over its Australian equity capital markets business. The bank is the second-largest underwriter in the domestic equity market, and Australia and New Zealand contribute nearly half the revenues of its advisory and fund management business.
Macquarie, dubbed the “Millionaire’s Factory” for its generous banker pay, said second-half profit could be 10 per cent higher than the first half’s, excluding one-off items, putting it in line with consensus forecasts of A$1.07bn (£596.5m) for the year to the end of March.
Investors, however, were disappointed as Macquarie attached disclaimers to those projections.
“People were trading a bigger number and they didn’t get it,” said Donald Williams, fund manager at Platypus Asset Management.
Macquarie shares closed down 6.1 per cent at A$47.28 – their lowest since 22 December.