Stock Focus – Macquarie Bank Ltd A very attractive international...

Stock Focus – Macquarie Bank Ltd

A very attractive international model

Weakness in the share price on the day of the results announcement belied a number of positive signals. Citigroup Investment Research has upgraded their recommendation.

Key to this result was the expansion of the international business, which now represents 46% of income. Citigroup Investment Research expect MBL’s offshore model to underpin growth for the foreseeable future.

A number of subtle and less subtle signs suggest management remains confident on the outlook. Citigroup Investment Research’s analysis includes the improved tone of FY06 guidance, the lift in unrealised gains on listed holdings to $545m, a step-up in headcount (9% hoh/17% yoy & 32% in international markets where revenue efficiency is highest) and seed asset values of almost $1.2bn.

Usual caveats apply (equity markets downturn, strong rise in interest rates), but they see no immediate significant deterioration in operating conditions. While performance fees from existing listed vehicles may be well down in 2H06, MMG and KRIF offer some prospects in this respect.

Citigroup Investment Research have lifted their FY06, FY07 & FY08 EPS estimates by 10%, 12% and 13% respectively, supporting the lift in their 12-month target price.


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Yeah I probably sold out too early.

Cheers.