Magellan Financial Group Ltd

MFG Details

Improving FUM:Magellan Financial Group Ltd (ASX: MFG) delivered a better Funds Under Management (FUM) performance as at September 2017, which reached $ 51,576 million as compared to $ 50,641 million as at August 2017. Infrastructure Equities rose to $8,637 million during the month, up from $ 8,394 million in August 2017. The group delivered net inflows of $146 million in the month of September 2017, which comprised net retail outflows from Global Equities strategies of $230 million. MFG also generated net retail inflows into Infrastructure Equities of $36 million, while net institutional inflows reached $340 million. The group has raised over $1.55 billion for Magellan Global Trust. The estimated costs that would be paid by Magellan would be over $84 million, before tax and net of recoverable GST. Meanwhile, the shares of MFG rallied over 8.1% in the last four weeks (as of October 09, 2017) and we believe this bullish momentum in the stock will continue. Trading at a decent dividend yield, we give a “Buy” recommendation on the stock at the current price of $ 24.96



MFG Daily Chart (Source: Thomson Reuters)

AMP Ltd

AMP Details

Expect subdued cashflows in wealth management: AMP Ltd (ASX: AMP) isthe major financial advice network in Australia and New Zealand having 3,370 financial advisers and planners with over 4 million retail customers and has greater than A$245 billion in assets under management. Their comprehensive program of reinsurance has been said to generate major capital release while retail book would be effectively 65% reinsured for claims incurred from 1 November 2017. The group reported a 27% rise in AMP Capital international institutional clients to 252 during the first half of 2017 and delivered a 33% external AUM managed on behalf of international clients. The group’s share surged 3.5% on October 10, 2017 at the back of improving market sentiments.


First half of 2017 operating margins (Source: Company reports)

For the wealth management, the group now expects their investment-related revenue to AUM margin compression to be over 5% per annum on an average through to December 2017 while the compression might be volatile from period to period. As a result, AMP stock corrected over 7.9% in the last three months (as at October 09, 2017). The group forecasts their second half of 2017 cash flows to be subdued on the back of forward effect of 1 July super change for the wealth management. The group has also put a pause on its buyback program that was not completed. We give an “Expensive” recommendation on the stock at the current price of $ 4.96



AMP Daily Chart (Source: Thomson Reuters)

Platinum Asset Management Ltd

PTM Details

Rise in funds under management:Platinum Asset (Investment) Management Ltd (ASX: PTM) stock rallied over 30.3% in the last three months (as of October 09, 2017) and we believe this bullish momentum in the stock to continue in the coming months. The group’s funds under management improved to $24,770.6 million in the month of September 2017 as compared to $23,890 million in the prior corresponding period. The group had earlier reported for inflows of ~$100m in August and material outperformance of the International Fund.


Broad range of PTM investment products (Source: Company reports)

The group’s Platinum unhedged fund and Platinum International Brands Fund reported returns of 32% and 28%, respectively for FY17. The group also paid a fully-franked ordinary dividend of 15 cents per share in September 2017. PTM recently launched two active ETFs to feed funds into the existing International and Asia strategies. However, this recapturing of funds is associated with an increase in costs. Looking at the performance and trading scenario, we give a “Hold” recommendation on the stock at the current price of $ 6.67



PTM Daily Chart (Source: Thomson Reuters)

Macquarie Group Ltd

MQG Details

FY18 performance to be in line with FY17: Macquarie Group Ltd (ASX: MQG) forecasts their FY18 performance to be in line with FY17 while expects their performance fees to be recognized in the first half of 2018 to drive the half better than the first half of 2017 but in line with 2H17, subject to the conduct of period end reviews and the completion rate of transactions. The group’s Asset Management fell 6% to $A1.5 billion in the fiscal year of 2017 as compared to the prior corresponding period. The base fees are also forecasted to be broadly in line with earlier result. The group expects their short-term outlook to be affected by foreign exchange as well as potential regulatory changes and tax uncertainties. Trading at high levels, we give an “Expensive” recommendation on the stock at the current price of $ 92.46



MQG Daily Chart (Source: Thomson Reuters)

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