Sydney quoted Macquarie Group (ASX – MQG) is currently involved in two major plays, one domestic & one in China. Macquarie functions as a non-operating holding company with seven different segments : Financial Services, Adisory Services, Private Wealth, Funds Management, Banking & Securitization, Treasury & Commodities & Equity Markets, yielding a market cap of A$ 8.9Bn, at todays closing price of A$29.50. Macquarie has traded at a 52 week high of A$82.20 & a low of A$20.08.
Possibly bolstered by Moodys recent Aaa rating for its fixed backed bonds, traditionally bullish Macquarie are involved in a potential takeover of ailing Citigroups Australian operations, as reported in the Australian Financial Review. The acquisition would bolster Macquarie’s position as the largest full service retail in Australia with about 430 advisers, Citi Smith Barney, the retail stock broking and wealth management unit, had sales of more than A$150 million ($100 million) and net profit of A$21.4 million last year.
Further away from home, Macquarie has signed a deal with China’s Hengtai Securities, which will allow Macqaurie to realise access to the potentially lucrative capital markets, which are currently valued at $70Bn per annum. The deal would see the Australian investment firm take a 33% stake in a joint venture. Hengtai, based in Hohhot, Inner Mongolia, owns more than 30 outlets in Shanghai, Beijing, and Shenzhen. Its businesses include stock underwriting, stock trading, brokerage and fund management
‘Macquarie is less affected by the crisis and China’s capital markets still have huge potential to grow,’ said Liang Jing, analyst at Guotai Junan Securities Co. ‘So it’s understandable that Macquarie wants to be in China for long-term growth.’
China pledged on Saturday to quicken reform and innovation of its capital markets to lay the groundwork for future growth. Such reforms included expanding the corporate bond market, launching NASDAQ-style start-up boards when appropriate and developing real estate investment trusts (REITs) on a pilot basis.
China has in the past year tightened approval on securities joint ventures. So far, Morgan Stanley, Goldman Sachs, UBS AG , Credit Suisse AG and CLSA Asia-Pacific Markets have obtained licences to operate in China. Macquarie, which offers banking, investment and fund-management services, has been investing in China’s residential real estate for more than a decade.