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Macquarie Group Limited (MQG.AX)

ASX - ASX Delayed price. Currency in AUD
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126.75-1.09 (-0.85%)
At close: 4:10PM AEDT
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Previous close127.84
Open127.63
Bid138.21 x 0
Ask126.81 x 0
Day's range126.75 - 128.79
52-week range70.45 - 152.35
Volume903,075
Avg. volume878,545
Market cap46.325B
Beta (5Y monthly)1.35
PE ratio (TTM)16.58
EPS (TTM)7.64
Earnings date06 Nov 2020
Forward dividend & yield4.30 (3.39%)
Ex-dividend date18 May 2020
1y target est129.79
  • What Beyonce Can Tell Us About M&A
    Bloomberg

    What Beyonce Can Tell Us About M&A

    (Bloomberg Opinion) -- If you could have bought the future earnings of the members of Destiny’s Child in 2001, would you really have turned it down because you weren’t sure where Kelly Rowland’s career was headed?That’s a good analogy for Ares Management Corp.’s interest in AMP Ltd., the Australian asset manager that’s lost more than two-thirds of its value over the past three years amid an official investigation into misconduct in the financial sector, combined with boardroom turmoil and a sexual harassment scandal. While the focus has been on the problems of AMP’s retail divisions, it still has a Beyonce on its books that a bold investor can pick up on the cheap.Years of bad publicity have been devastating to AMP’s retail-focused wealth management business. Revenues that were running at more than 1.1% of assets under management five years ago will be in the region of 0.7% this year. Even that’s not enough to stem the flood of withdrawals from customers. Net cash outflows since the start of 2018 have amounted to about A$14.67 billion ($10.34 billion), equivalent to nearly half a billion dollars a month.Things look very different, though, when you consider AMP Capital. This division is a global infrastructure and real estate business that could be likened to Macquarie Group Ltd., with investments in airports, rolling stock, parking garages and office blocks across multiple continents.Macquarie is currently valued at about 7.6% of its A$607 billion in assets under management, at the higher end of the typical 3% to 8% range for the sector. Ares, for its part, runs at about 6.1% of its $179 billion AUM. Even after surging 22% Friday on news of the takeover interest from Ares, the whole of AMP is worth only A$5.36 billion. That's roughly 3.4% of AMP Capital’s A$190 billion in AUM, and 2.1% compared with the A$253 billion at the group as a whole.Suppose the retail-focused wealth management business and bank turn out to be duds. Ares is still picking up a global infrastructure investor on the cheap, at a time when the prospects for such businesses look rosy. Record-low interest rates and pandemic-hit global economies are likely to start channeling yet more money into physical assets over the coming years.The problems with AMP’s core business have even been modestly beneficial to AMP Capital. The fees it charges to the company’s wealth management arm, at 18.1 basis points in the first half of this year, are not much more than a third of the 45.7 basis points levied on external investors. As AMP’s wealth management customers withdraw their cash and external investors show ongoing demand, that’s weighting the business more and more toward its most profitable clients. Fee income last year was up 56% over its levels five years earlier.To be sure, any buyer is going to have to decide what to do with those retail businesses. It’s anyone’s guess when the tarnished image of AMP’s wealth management arm will recover. Meanwhile, its bank has a A$20.21 billion mortgage book that’s likely to suffer from a shaky pandemic-hit property market and net interest margins that are being squeezed by competition. Still, it’s not impossible that a new American owner could help on that front. AMP was traditionally one of Australia’s most widely held stocks. Only Commonwealth Bank of Australia has more individual shareholders than AMP’s 723,387. That means that the twists and turns of its half-yearly reporting cycle are a constant reminder of its troubled past to local investors who should be its core customer base. If you wanted to rebuild AMP’s image, there would be worse ways of doing it than burying its performance in humdrum aggregate numbers reported out of Los Angeles.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    How Harley-Davidson Lost Its Rumble in India

    (Bloomberg Opinion) -- Harley-Davidson Inc. is riding out of India. That’s as much of a problem for the American motorcycle icon as for one of the largest two-wheeler markets looking to make its mark globally.Harley said in a regulatory filing Thursday that it was discontinuing sales and manufacturing operations in the world’s second most populous country as part of its company-wide restructuring, or the “Rewire” plan, a five-year strategy to reset its business, focus on high-priority markets and tighten up by streamlining models. That the Milwaukee, Wisconsin-based company is pulling out of a thriving market for motorbikes speaks to a troubled international strategy in need of overhaul. It comes as Prime Minister Narendra Modi is pushing his “Make in India” program, with the autos sector (including two-wheelers) as a key part and potentially $23 billion in production incentives on the way. Nonetheless, Toyota Motor Corp. said last week it won’t expand further there.India hasn’t been an easy market for Harley, where it’s had an assembly plant for a decade and sells a few thousand bikes. The company operates a “complete knock-down” assembly plant, where components and parts are imported from the U.S. and assembled into motorcycles for the local market. It also produces the Harley-Davidson Street series for sale outside North America. Finding the price sweet spot and gaining traction in India, even with models made for the market with smaller engines, has been difficult. Discounts sometimes help; at other times, they turn off buyers. Bike manufacturers have struggled with the existential approach — more for less, or vice versa? Indian consumers are aspirational and not that easy to please: A cheaper model of a high-end brand won’t cut it. Taxes on larger powertrains are punitive. Harley’s bikes can cost as much as 1.1 million rupees (about $15,000). That’s steep for a market where the average bike with decent mileage starts at 50,000 rupees, and its nearest competitor prices closer to 150,000 rupees.  Harley was never going for the mass market, of course. It’s long since moved beyond the Wild One to the Weekend One, selling the emblazoned-leather-jacket lifestyle of the American biker on the open road to those who can pay a top price for it. Still, in India, there has been opportunity. Volumes of premium-segment motorcycles have been growing for the last six years. Top-end models have drawn first-time buyers from higher-income levels, and are potentially an upgrade choice for the 70-some million riders of smaller bikes, according to analysts from Goldman Sachs Group Inc. Its main rival in the segment is Eicher Motors Ltd.-owned Royal Enfield — priced well below a Harley, with a similar brand appeal. The Harley cult hasn’t grown big enough to convert into substantial sales. The top 10 brands in India have 70% of the market, according to Macquarie Group Ltd. analysts. Most of the best-selling models have been around for at least 17 years, on average. The majority of new launches fail when it comes to gaining share. As the analysts put it, the best way to get a toehold has been when new segments emerge. Harley hasn’t rolled into one. It priced itself too high, then tried to make cheaper versions that didn’t appeal to fans. The company is hamstrung to some extent by the parts it imports and then assembles at its Bawal plant. Tariffs have been a point of contention with U.S. presidents from George W. Bush to Donald Trump. But Harley struggled even after they were cut. The company has also suffered in the wider global trade frictions, with net revenues affected by tariffs imposed by China and the European Union, and by the U.S. on items imported from China. Part of the problem for motorcycles has been the transition to the latest emission norms (a good thing). Keeping up, though, has meant an increase in imported content for parts, according to Goldman Sachs analysts. Duties and taxes haven’t been lowered to keep pace, while ownership costs and road taxes have increased. All together, state levies make up to approximately 50% of a vehicle’s on-road price, the highest among comparable countries, the analysts say.Modi’s ambitious plans could have been helped by a symbolic gesture to hold on to Harley. India’s inability to keep a premium manufacturer with an outsize brand points to misaligned incentives and dim prospects for becoming a top-end hub. Middle-weight players are doing fine, and large domestic manufacturers like Bajaj Auto Ltd. and TVS Motor Co. export 47% and 26% of their production. But that may be the ceiling.In contrast, Thailand has several production-linked incentives, along with significant research and development expenditure benefits and relatively low corporate tax rates. Premium, larger-engine motorcycle makers have flocked there, including Harley, which has a manufacturing facility.Both India and Harley are walking away from what could have been a big opportunity.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Anjani Trivedi is a Bloomberg Opinion columnist covering industrial companies in Asia. She previously worked for the Wall Street Journal. For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    Japanese Chip Gear Supplier Eyes Rebound in Flash Memory Orders

    (Bloomberg) -- Screen Holdings Co., a Japanese maker of semiconductor manufacturing equipment, is seeing signs of a rebound in demand from flash memory makers, while DRAM manufacturers hold back spending.A slump in overall orders for chip gear in the three months ended June 30 will be short-lived, followed by a rebound over the next two quarters and a dip in the final one, Screen President Toshio Hiroe said in an interview. The company expects full-year orders and sales in the business to be little changed from the last fiscal period, with demand from Taiwanese foundries helping to offset sluggish spending by DRAM makers.“The conditions in the Nand market are looking good and chipmakers are beginning to invest in preparation for future demand,” Hiroe said. “DRAM recovery has been slow going.”Chipmakers and their suppliers have faced an uneven recovery as the coronavirus pandemic spurred demand for home computing equipment even as the global economic downturn hurt spending elsewhere. Screen, whose customers include Taiwan Semiconductor Manufacturing Co. and Intel Corp., reported a 28% drop in orders for semiconductor production equipment during the June quarter.Screen, the world’s biggest maker of silicon wafer cleaning equipment, is looking to grow revenue in the business by as much as 30% over the next four years. The company, which already controls about 80% of the market for the most advanced cleaners, is developing new machines to expand its share of less cutting-edge chip processes, Hiroe said, declining to give further detail. Its competitors in this business include chip gear giant Tokyo Electron Ltd., Lam Research Corp. and Chinese manufacturers.“Getting to those mid-term targets will depend on them achieving market shares gains,” said Damian Thong, an analyst at Macquarie Group Ltd. “The equipment market is competitive, so this will be no mean feat.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.