Macquarie Group Ltd’s [ASX:MQG] shares dropped by 2.47% this morning, translating to a loss of $3.15 on its overall share price — its sharpest drop this week.
Macquarie Group is a global diversified financial group, headquartered and listed in Australia.
The blue-chip is trading at $124.41 per share at time of writing.
Why the drop?
Macquarie Group recently revealed it would be selling some of its stake in the New Zealand-based aged care service provider, Oceania Healthcare — a massive 95 million shares.
The Group holds 57.2% of Oceania Healthcare, and intends to offload 15.6% of its stake. This would mean they would be left with 42% interest in the aged-care company.
Not only will this relieve them of some control over the company, it also means a loss of the spot on the board of directors.
Macquarie took Oceania Healthcare to the ASX and NZX boards in May 2017 and had tried a few times previously to find a trade buyer willing to buy the company.
Meanwhile, Oceania’s stock price has been flatlining, remaining at $1.05 for more than a week now.
And that’s not the only reason Macquarie has been in the news recently. On Sunday, the company quietly removed themselves from the investor register of the struggling Mark Bouris-led mortgage and wealth group Yellow Brick Road, after a six-year involvement.
The Group offloaded its YBR holding (which was less than 5% after its downgrade from 18.4% in April) despite a takeover offer from Ron Brierley’s Mercantile Investment Company.
So, is the drop in Macquarie’s share price a reaction to Oceania, or a collection of headlines?
What’s next for Macquarie Group?
Macquarie Group’s mortgage book amounted to $34.3 billion at the end of March and has a business banking loan portfolio of $7.5 billion. Macquarie also has about $86.8 billion on its investment platform — so all seems to look good internally.
It could be argued that the decline in their share price has become volatile with the announcement of the changes to their holdings. Seeing as they’ve seen a positive 12 months so far, maybe this instability will balance out now that the worst is over.
For Money Morning
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