KEY POINTS:
Shares in Macquarie Bank yesterday had their biggest decline in a month after chief executive officer Allan Moss said second-half profit would be lower than the first.
Earnings in the six months ending March 31 would be "slightly down" on the record A$730 million earned in the previous half, excluding a A$92 million one-time gain in that period, Moss said.
Macquarie participated in two of the world's 10 largest buyouts last year including RWE AG's Thames Water unit and BAA, and ranked first for takeover work in Australia.
The Sydney-based bank's stock rose to a record on Monday before yesterday's briefing.
"It looks as though too much was built into the share price," said Sondal Bensan, who helps to manage US$30 billion at BT Financial Group in Sydney, including Macquarie stock. "People are concerned that growth may be slowing."
The bank's shares fell A$2.48, or 3 per cent, to A$81.40 in morning trade in Sydney, the biggest slide since January 8.
The stock is up 28 per cent in the past year, outpacing a 22 per cent gain in the 55-member S&P/ASX 200 Finance Index.
Macquarie, Australia's largest securities firm, is expensive compared with overseas peers, trading at 20.4 times 2006 earnings.
"Any hint of profitability easing in the second half from the first is bad news for a company that's been charging along like Macquarie," said Andrew Sekely, head of equities at Intersuisse in Sydney.
Total assets under management rose 16 per cent to A$177 billion in the December quarter, Moss said yesterday, citing the purchase of Thames Water. He said full-year profit would be "up strongly" from a year earlier.
The bank expected continued strong transaction levels and substantial raisings in unlisted international specialist funds in the remainder of the full year, Moss said.
Macquarie had sold A$1.3 billion of assets into funds since September 30 and acquired about A$990 million of assets in the same period, he added.
In the past four months, the bank sold two-thirds of its holding in Thames Water, its luggage trolley business Smart Carte Corp and Stagecoach Group's London bus operation, acquired for £264 million in June, Macquarie said.
A Macquarie-led buyout group has offered A$11.1 billion for Qantas, Australia's largest carrier, in a bid backed by the target's board in December.
Last week, the bank reached agreement with Alinta on terms under which it may act for a management buyout of the A$6.9 billion energy company.
- BLOOMBERG
