Based on last 6 months performance and market out of unusual Covid period, we don’t have to worry about MFG not performing better than indexes anymore. Regarding future pay and those sort of initiatives, I think it will take a very long time to get something substantial, if at all. Barrenjoey is safe for next two years on the work they are doing currently. But I remember reading Macquarie annual reports and how they all ways say Macquarie Capital side of the business is not smooth over 3 to 5 period. It has activity and low activity periods. Good years are mixed with few bad years. I think this is something Barrenjoey will face beyond next two years. About capital management, in my opinion they will use the extra cash for some other principles business investment like GYG and Barrenjoey. After paying 90% dividend, they are still left with about A$50M in hand. I also noticed DRP provided about A$50 M last week. So they are building good cash pool. First positive thing that is needed is for market to understand that MFG is out performing other indexes like what it did pre Covid. Hopefully that will bring new funds for management.
MFG Price at posting:
$34.08 Sentiment: Buy Disclosure: Held
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