Macquarie (ASX:MQG) share price jumps on FY21 Q1 update

The Macquarie (ASX: MQG) share price is up more 1% after giving investors its first quarter update for FY21.

Macquarie is a global investment bank which is listed on the ASX. It has four divisions including Macquarie Asset Management (MAM) – it’s one of the world’s largest infrastructure managers.

Macquarie FY21 Q1 update

Macquarie has given an update ahead of its annual general meeting (AGM).

The investment bank said that its operating groups have been impacted by mixed trading conditions. Its FY20 first quarter operating net profit contribution is “slightly down” on the first quarter of FY20.

MAM assets under management (AUM) at 30 June 2020 was down 5% over the quarter. Adverse foreign currency movements was the main reason for the decline. But this was offset by market appreciation of other assets.

The banking and financial services saw total deposits rise by 8% to $69 billion over the quarter and the home loan portfolio rose 4% to $54.3 billion.

The commodities and global markets (CGM) division benefited from increased activity as clients sought to rebalance their portfolios to manage risk. Trading was reduced near the end of the quarter.

Macquarie capital fee revenue was down due to lower mergers & acquisitions as well as less activity in the debt capital market. However, capital raisings provided a boost and the strong performance of the equities platform also helped.

Macquarie Managing Director and CEO Shemara Wikramanayake said: “Macquarie’s annuity style businesses were up 1Q20 with MAM up primarily due to the sale of its rail operating lease business, partially offset by lower income in banking and financial services (BFS) which included higher provisions. Macquarie’s market-facing businesses were down on 1Q20 primarily due to significantly lower investment-related income in Macquarie Capital partially offset by stronger contributions from certain divisions in CGM.”

Macquarie capital position

Macquarie said it had surplus group capital of $8.1 billion with a bank CET1 ratio of 13.2%.

Summary

Macquarie is a high quality business which has global growth prospects, better than the big four ASX banks in my opinion. However, it has recovered strongly since the March 2020 crash so I don’t think today’s price represents great value. I believe there are other ASX growth shares out there, like Bubs (ASX: BUB), which have much better growth prospects – partly because Macquarie is just simply so big.

Expert Analyst Report: 1 ASX Stock for 2020 & Beyond

Want to know the name of 1 of our lead analyst’s top 10 growth stocks?

Click the button above and enter your email to receive a 3,500-word analyst report, valuation research note, exclusive CEO interview and more.

It’s completely free. Just enter your email and we’ll send you the report.

Expert Analyst Report: 1 ASX Stock for 2020 & Beyond

Want to know the name of 1 of our lead analyst’s top 10 growth stocks?

Click here to access our free member content, including this 3,500-word analyst report, valuation research note, exclusive CEO interview and more. It’s completely free.

At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Keep reading:

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.