“Macquarie owns some great assets, especially in recycling, and they’re not in a position where they need to hurry,” he said.
“You want some competitive tension when selling assets, and we know financing conditions globally are tight, and debt funding has become more expensive and harder to source. Macquarie has a lot going on in Europe, especially in its green infrastructure division, and conditions there are even tighter than they are in the US.”
While Macquarie shares fell on Wednesday, Clark said the company’s update was “more a timing thing” and that given the broader Australian sharemarket’s performance over the day, the share price movement was to be expected.
“What Macquarie basically said was that some of the assets they were going to sell this half of the year will be sold in the next half,” he said. “When markets are down 1 per cent, Macquarie’s share price comes down a couple per cent because they’re leveraged.”
Citi analyst Brendan Sproules said Macquarie’s announcement showed the company would face a softer first half than expected but that unlike July’s annual general meeting, the group’s current full-year performance metrics had been left unchanged.
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However, he noted Wednesday’s release “indicated that Macquarie Asset Management’s realisations will predominantly appear in the second half rather than the first half”.
Sproules said he expected consensus cash earnings for the first half to be revised down to about $1.6 billion from $1.9 billion as the result of a “tougher environment for deal flow”, which had already led to full-year downgrades for the Macquarie Asset Management and Macquarie Capital businesses this year.
Morningstar analyst Nathan Zaia said Macquarie’s update could result in some analysts lowering their first half profit results for the company, but that it largely looked to be about timing of asset sales rather than a material change. “It’s nothing alarming from our point of view,” he said.