(9 June 2011 – Australia) Macquarie Group has added pressure with weak global markets and a falling of share deal-flow.In a note to clients yesterday, Citi downgraded the bank to a ‘sell’ and cut its target price 20 percent to A$30.50 because of the effect of the high Aussie dollar on Macquarie’s offshore earnings, which account for 60 percent of its profit.
Macquarie shares, which were above A$80 in late 2007, yesterday closed down 2.14 percent at A$32.
Australia’s largest investment bank gave no guidance in April when it delivered a 9 percent fall in full-year profit to A$956 million, but said better markets would help it beat the 2011 result.
But Citi yesterday downgraded its earnings assumptions ‘as deal pipeline, M&A shares and markets all weaken’, cutting its full-year 2012 profit forecast by 9.5 percent to A$1.115 billion.