Macquarie shares rose 0.7% to $64.68 yesterday (it was up 1.7% at one stage) as it used a now traditional venue – a Hong Kong investor conference – to update the market in guidance for the 2015-16 financial year which ended last Thursday.
The guidance was contained in a report to the ASX yesterday. It was part of a presentation that the bank will give at the Credit Suisse Asian Investment Conference in Hong Kong starting today and running until Friday.
Macquarie said that there were “satisfactory trading conditions” across the group in the third quarter of its financial year, noting that "recent trading conditions reflect current market uncertainty”.
Macquarie Group restated its guidance that it expects its second-half results to be lower than the previous six months.
"As previously foreshadowed, the 2H16 result is expected to be lower than 1H16 but higher than the prior corresponding period (2H15), subject to the conduct of period end reviews," the statement said, referring to earlier guidance from February 4.
"Over the medium term, Macquarie remains well positioned to deliver superior performance.
“Our balance sheet is strong and conservative,” the statement said.
Some local analysts have been slow to believe Macquarie’s guidance, preferring to look at the upsurge in volatility in the March quarter and use that to suggest higher trading profits for the bank.
But many of its peers – Deutsche, Barclays, UBS, Credit Suisse, Goldman Sachs, Bank of America and Citi – have warned of falls of between 20% and 45% in trading income in the March quarter, and analysts in America and Europe have been busy lowering their earnings estimates for these major financial groups. Macquarie reported a profit of $A1.6 billion for the year to March 2015, up 27% from $A1.27 billion the year before.
Macquarie is really telling the market that it is in the same boat. That could also mean a weak outlook for the first half of 2016-17.