$15 soon

Macquarie shares dive

October 03, 2002
SHARES in Macquarie Bank Ltd tumbled by more than four per cent today as negative sentiment about the investment bank continues to grow.

The bank's shares were 3.6 per cent, or 75 cents, lower at $20.22 by 1334 AEST.

The stock is now about $20.00 lower than it was in September last year and trading around levels not seen since October 1999.

Brokers said investors were losing patience with Macquarie and the lack of performance by its string of investment funds, particular its Macquarie Airports fund - the owner of Sydney Airport.

That fund's securities came under further pressure today - down seven cents at 91 cents - just days after investors handed over their second dollar instalment for the $2.00 securities which listed in April.









Foster Stockbroking's head of dealing Kevin Massey said there was a general lack of confidence in Macquarie Bank currently.

Investment banks around the world were also struggling, he added, given the weakness on global equity markets and lack of major corporate activity such as mergers, acquisitions and takeovers for them to earn fees from.

"(Macquarie) have made a lot of fee income in the general way they have pumped out those infrastructure (fund) products and the gloss has gone off those sorts of products," Mr Massey said.

"So it brings into question their ability to generate fee income when the products they have haven't performed."

Mr Massey said he believed Macquarie's shares would continue to fall, particularly if investment markets remain weak and corporate work continues to be lacklustre.

Another broker, who asked not to be named, said there was speculation in the market that the stock could sink as low as $15.00.

"Their credibility is damaged," he said.

"Major clients will be walking away from them because they are not doing well.

"Their corporate work is pretty light and there's a general feeling that `why should we buy Macquarie?'.

"I believe people are just disappointed."

Macquarie is due to report its first half earnings on November 14.