MQG – Macquarie Bank likely to benefit from a growing corporate demand for capital

English: Macquarie Bank No1 Martin Place, Sydney

English: Macquarie Bank No1 Martin Place, Sydney (Photo credit: Wikipedia)

Macquarie Bank, Monthly chart, Jan 4, 2013

It is perhaps surprising to note:

  • that when $CSL broke above $50 it exceeded all previous highs.
  • $CBA yesterday tentatively reached an historic high at $62.97.

With these iconic companies beginning to look fully valued, and a bull market scarcely underway, many investors are likely to be eyeing off other companies with perhaps greater growth potential.

One such company could well be $MQG. Much of its wealth of yesteryear flowed from a somewhat incestuous relationship between the parent company, and the various infrastructure funds into which it squirreled away its assets; enabling it to continue to receive lucrative ongoing management fees.

Since unwinding these arrangements the company has continued to expand into a global financial giant, and as far as I know, has been aloof from the grubby deals of the GFC.

Last year was one of the worst for launching IPOs. Most of those launched did not fare well, the most notable example being Facebook. In Australia Pura Veda Energy, Equamineral Holdings, and Boadicea Resources bucked the trend with stunning floats. It is likely that with a more optimistic outlook for 2013, we will see a backlog of enterprises seeking capital, an area of Macquarie Bank‘s expertise.

Technical Analysis (TA) considerations.

  • High prior to the GFC was $98.64
  • Low in March 2009 was $15.
  • The share-price recovered to $60 Oct 2009 (50% retracement level)
  • The second leg collapse in the share-price reached $20 in October 2011.
  • Since then the share-price has been in an uptrend on the monthly chart to be now hovering around $36
  • This may seem to be fairly fully priced in comparison with NAB, ANZ, and WBC, but is well below its historic highs.
  • The 38.2% Fibonacci level is at $47, and this is the next target, which could be reached in the next 6-8 months.

Categories: Trading opinion

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