MQG 0.07% $136.18 macquarie group limited

only down $145m .... better than expected

  1. 13,594 Posts.
    lightbulb Created with Sketch. 4
    according to an article in the Australian
    this is much better than expected which is unusual for newspaper report.
    $145m is nothing
    profit in the vicinity of $860m

    huntley is expecting something in the vicinity of $600m
    they have an intrinsic value of $47 and a buy up to $34.45

    it is now trading at $23

    Macquarie Group faces $145m hit as funds' value plungeFont Size: Decrease Increase Print Page: Print Scott Murdoch | November 15, 2008
    Article from: The Australian
    MACQUARIE Group will take a $145 million hit on its cash earnings as its struggling satellite funds plunge in value.

    The Macquarie share price target has been sliced in half, after the stock's woeful performance to lose 35 per cent in the past eight trading sessions.

    The bank, which was in the race to become Australia's first $100 stock, is now worth $22.73 a share after losing another 3.7 per cent yesterday.

    The share plunge came after Deutsche Bank and Goldman Sachs analysts cut their earnings forecasts for Macquarie by 30 per cent on the back of the shaky economic and financial market outlook.

    The downgrades follow similar action by UBS and Merrill Lynch earlier in the week, with analysts now uncertain as to the future performance of Macquarie, the largest domestic investment bank.

    There was speculation that Macquarie could sack 4000 of its 13,000 global workforce, but the claim was denied by the bank yesterday.

    The number of sackings has started to soar, though, with at least 200 of the 600 bankers in the real estate and property division now gone.

    The division was put on notice earlier this week that jobs had been placed on review, given a lack of deal flow in recent times.

    Goldman Sachs JB Were's analyst James Freeman said the fluctuating mark-to-market valuation of Macquarie's listed specialist and managed funds would need to be written down by $438 million pre-tax, which would create a $145 million hit to cash earnings. The greatest write-down is expected to occur in Macquarie Infrastructure Group, and two of its real estate funds which have struggled in the domestic and international real estate markets.

    Mr Freeman cut the profit outlook for the bank, on an earnings-per-share basis in the full year of 2009, by 24 per cent, 3.6 per cent in 2010 and 2.9 per cent in the following year.

    Goldman has estimated Macquarie could have to make a full write-down on its real estate investment trust assets and a 50 per cent write-down on infrastructure investments.

    Deutsche Bank's banking analyst Ross Brown cut the Macquarie share price target by more than half yesterday, moving it down from $85 to $40. However, a "buy" recommendation was still kept on the stock.

    Mr Brown said rising impairment provisions on investment and a lack of general deal activity would prompt a 30 per cent drop in earnings.

    Macquarie has fallen from favour in equity capital market activity, particularly after its disastrous float of Brisconnections, the trust behind the construction of the airport link in Brisbane which has a unit value of just one-10th of a cent.

    Mr Brown said it was likely that Macquarie could have faced impairment charges of $1 billion in full-year 2009, which prompted him to downgrade earnings by 29 to 32 per cent.

    "More recent deterioration in financial markets has led us to cut our Macquarie forecasts due to rising impairment provisions on investments and reduced market activity," he said.

    Macquarie will deliver its half-year result next Tuesday.
 
watchlist Created with Sketch. Add MQG (ASX) to my watchlist
(20min delay)
Last
$136.18
Change
0.100(0.07%)
Mkt cap ! $49.78B
Open High Low Value Volume
$136.76 $137.34 $136.18 $133.3M 976.6K

Buyers (Bids)

No. Vol. Price($)
1 873 $136.18
 

Sellers (Offers)

Price($) Vol. No.
$136.37 121 1
View Market Depth
Last trade - 16.10pm 23/10/2020 (20 minute delay) ?
(live)
Last
$136.62
  Change
0.100 ( 0.62 %)
Open High Low Volume
$136.64 $137.29 $136.20 28059
Last updated 15.59pm 23/10/2020 (live) ?
MQG (ASX) Chart
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.