Picking bottoms is a dirty business but this looks like an interesting place to enter a starter position with if we look at the business through the eyes of private capital.
A 7.4% yield (bear scenario) in a highly liquid capital light business is nothing to be sneezed at.
Note 1: Assume MFG suffers another 18.5 billion (20%) in outflows and there is no capital appreciation in the underlying funds for the financial year as global markets struggle to digest the rising interest rate environment.
Note 2: Assume certain fees need to be adjusted downward over the short term to retain funds (this should in fact offset some of the loss assumed in note 1).
Note 3: Assume no reduction in costs which would be unlikely. Have assumed unusual expense (options 220m) from PY is non recurring.
Note 4: Diluted figure.
Note 5: This will have increased from the June position so holding it flat is a conservative assumption.
Note 6: Assume a 50% haircut is taken to liquidate these positions which appear already conservatively valued at book on the BS.
(20min delay)