What Happened to Macquarie Group Ltd’s Share Price?
Shares in investment bank Macquarie Group Ltd [ASX:MQG] rose by 5.35% today. The stock handily outperformed an Aussie share market that struggled for direction. It’s a welcome return to form for Macquarie, whose shares fell to an eight-month low last week.
Why Did This Happen to MQG Shares?
This morning Macquarie upgraded its profit outlook. Thanks to better trading conditions as well as the lower Australian dollar, Macquarie tentatively expects its profit for the year ending 31 March 2015 to be up between 10% and 20%.
This suggests a lot has changed in two months. When Macquarie last briefed investors in November, chief executive Nicholas Moore said the result for this period would be ‘slightly up’ on the previous year. It looks like equity capital market activity — particularly that surrounding the float of Medibank Private Ltd [ASX:MPL], on which Macquarie was a key adviser — has given the old ‘millionaire’s factory’ a real shot in the arm.
What Now for Macquarie Group Ltd?
Stocks in the financial sector live or die by the strength of the Aussie economy. That goes even more so for Macquarie. The ‘animal spirits’ that encourage mergers and acquisitions are the same forces that drive Macquarie’s share price.
If you think Australia’s recent spate of initial public offerings (IPOs), mergers, acquisitions, and capital raisings is here to stay, then an investment in Macquarie Group offers you plenty of bang for your buck.
But maybe even that’s not exciting enough for you. How about three stocks with the potential to rise hundreds of percent in a single year? Go here to find out more.
Cheers, Tim Dohrmann
Small-Cap Analyst, Australian Small-Cap Investigator