Macquarie Group Limited
Maintaining performance metrics: Macquarie Group Limited (ASX: MQG) has been trying to grow its business with net profit up 15% for FY18 given the strength of its global platform, business mix diversity and ongoing ability to acclimatize to changing market conditions as per the requirements of the clients. The group has based its growing profitability at the back of long-standing risk culture with share buyback programs in place and capital deployment by key businesses. The group has also planned for additional investments into renewable energy projects.
The group expects to have FY 2019 results to be broadly in line with FY 2018. Particularly, 1H 2019 is expected to be in line with the 1H 2018 result while FY 2018 net profit has been $A2557 million. MQG seems to be positioned well over the medium-term for a favorable performance while 1Q 2019 operating group contribution has been up on prior corresponding period (though below the previous quarter).
.png)
Financial Performance (Source: Company Reports)
Lately, we saw the group announcing about Nicholas Moore's retirement as the group’s MD and CEO. MQG then announced the appointment of Shemara Wikramanayake. With some recent news encircling around German authorities suspecting Macquarie Group Chief Executive Officer Nicholas Moore to be a “person of interest” in the controversies hovering around the dividend trading case, the stock has been on doldrums. Along with retiring CEO Mr Moore, incoming CEO Shemara Wikramanayake has been hit by Cologne Prosecutor’s Office (CPO) investigation. Macquarie reported that civil litigations and investigations by German authorities are in relation to its lending to investment funds in 2011. In a media release to ASX, Macquarie told that funds were trading shares around dividend payment dates to get benefited from dividends withholding tax credits. In relation to the civil case, two of the investors have earlier sued the Swiss bank that introduced them to the investment.
German authority Cologne Prosecutor’s Office (CPO) has been investigating into the case. Though up till now no staff member of Macquarie Group has been interviewed by CPO, the company disclosed that CPO wants to inquire the individuals involved in the transaction which could include 30 members of the group. The disclosure unveiled that CEO Mr Moore who is stepping down in November this year and successor Shemara Wikramanayake are in German probe. At the end of the release, Macquarie assured to cooperate with German authorities, noting that it has earlier also resolved the two other issues including German dividend trading.
With the news of civil litigations and German authorities’ investigation against Macquarie, MQG share price plunged by 3.36% in last five days as on October 3, 2018. The stock has seen a performance change of 33.9% over the past one year. Most recently, MQG traded at a PE of 16.16 x with market capitalization of $41.74 billion (reduced from $43.48 billion in last five days). The stock still looks “Expensive” at the current price of $ 122.380 with immediate resistance expected around $ 123.5 and support coming from $ 122.
Disclaimer
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.